The right route Improving transport decision making The right route 1

The right route Improving transport decision-making Contents By Rachel Cary, Rebekah Phillips and James Harwood Published by Green Alliance, November 2009 Designed by Howdy ISBN 978-1-905869-29-9

This report summarises some of the main points of a larger piece of research we commissioned from Keith Buchan, Metropolitan Executive summary 2 Transport Research Unit (MTRU). Investing in Transport: Making the Change is available from the Green Alliance website. Introduction 4 This report was prepared with advice and support from the Campaign for Better Transport (www.bettertransport.org.uk) Improving transport decision-making 6 We would also like to thank the individuals that agreed to be interviewed for the case studies. Improving the model 8 Case studies: what this means in real life 11 Merseytram: the development of a new tram scheme for Merseyside 12 Improving the Grand Union Canal passing through Park Royal 15 How to solve congestion in the Cambridge area? 16 Summary 22 Green Alliance Green Alliance is an independent charity. Our mission is Findings and recommendations 23 to promote sustainable development by ensuring that environmental solutions are a priority in British politics. We work with representatives from the three main political parties, government, business and the NGO sector to encourage new ideas, facilitate dialogue and develop constructive solutions to environmental challenges.

Acknowledgements This work is part of Green Alliance’s climate and energy theme and has been kindly sponsored by the following organisations 2 The right route The right route 3

Executive summary

The UK transport system is being put under In this report we showcase five types of It must be noted that even this simple table has • reform the decision-making process so that it increasing pressure, as people demand ever- transport schemes that have passed through been difficult to produce because the NATA is more accountable, transparent and joined- growing mobility. Both passenger and freight the existing decision-making process. These guidance on how the greenhouse gas objective up. More consideration should be given to road vehicle kilometres continue to rise. Car illustrate the problems with the current should be treated is ambiguous and is, in places, ensuring that guidance is followed and good traffic increased between 2006 and 2007 by transport appraisal system in the UK. misleading. Thus, there are sometimes no figures quality appraisals are developed in every case; 1.5 billion vehicle kilometres and the number of for present day emissions, which are essential if households with two cars or more now exceeds Our analysis shows that the recent revision to the the scheme is to be assessed against the targets • consider the alternatives in each appraisal to those without one1. The environmental impact government’s transport appraisal model makes for reduction now built into the 2008 Climate ensure that the best value for money scheme is of transport poses a real problem and concern public transport schemes look far more cost Change Act and accepted by DfT. selected; over local air pollution, noise and rising carbon effective, and road expansion schemes less so. emissions cannot be ignored. In addition What the table shows is that the overall BCR of • create an independent body to evaluate the there are growing calls for greater accessibility But we also found that: a number of the schemes changes significantly solutions to transport problems. This should and a need to reclaim our increasingly car under the revised appraisal model. If the model work within an overall strategic framework, dominated streets. • the appraisal model is still not reflecting were to be reformed further in line with our and should only allow schemes that contribute national objectives, as it does not take proper suggestion to better account for time and carbon to the government’s objectives to proceed; The recession and growing budget deficit has account of carbon reduction targets and savings, the numbers would change even further. put an enormous strain on public finances and exaggerates the value of small time savings; • reform the transport appraisal model further it is vital that good value for money transport Green Alliance recommends that Government to take better account of the impact of any schemes are selected. The introduction of • the decision-making process is far from take the following actions to improve transport proposed scheme on national carbon targets departmental carbon budgets means that the transparent and lacks co-ordination across appraisal: and sensibly assess time savings. Department for Transport (DfT) will now have regions; responsibility for the majority of carbon • reassess all of the approved/proposed transport This would achieve better value for money emissions from the transport sector2. Given the • there is an absence of reliable data and a lack of schemes where contracts have not been finalised for the tax payer and transport schemes that long lifetimes of most transport infrastructure, co-ordination in the decision-making process; to test their value for money, using the revised are able to deliver the government’s objectives. we need to ensure that the schemes built now cost-benefit analysis model. Any schemes that In particular it would enable the Department don’t lock us into high carbon lifestyles that • insufficient attention is given to alternative do not meet the revised criteria should be for Transport to deliver on its carbon could jeopardise success against our future schemes that could offer better value for removed from the transport programme; reduction targets. carbon targets. money;

Transport decision-making in the UK today • individual schemes are implemented in Table 1: Summary of comparative results under different NATA assumptions however does not reflect these challenges and is isolation without proper consideration being not fit for purpose. In many cases it is in direct given to demand management and multi- Benefit Cost Ratio (BCR) under BCR under revised BCR under appraisal model conflict with the government’s own objectives, modal approaches that may be significantly original appraisal model appraisal model with further reforms which include reducing transport related carbon more cost effective. Tram Merseytram 1.97 2.07 2.85*

emissions and promoting travel modes Cycle Grand Union Canal 38.4 75.0 75.0 3 beneficial to health . The Government’s transport appraisal system, Cycle Path the New Approach to Transport Appraisal Road Improving the 10.83 6.69 1.3 – 3.25** To decide which transport schemes to fund, (NATA), relies heavily on the results of a cost- A14 between Ellington and DfT uses an appraisal framework that includes benefit analysis that produces a single figure, Fen Ditton a form of cost-benefit analysis. This was revised a Benefit Cost Ratio (BCR), for each scheme Bus Guided busway 4.8 6.4 7.9** and broadened in 1998, but still favoured road assessed. The higher the number, the more Cambridge to St Ives schemes. Green Alliance and Campaign for beneficial the scheme is deemed to be. The table Rail Freight Expansion of rail 5.25 10.4 10.4*** Better Transport published a report in 20084, on the following page summarises the BCR for freight (Felixstowe – Nuneaton) which supported a revision of the appraisal each of the case studies in this report. It gives * Based on moving to a 60 year appraisal. The Merseytram case study provides several examples of how small changes in the model. We are pleased that some of our the BCR under the original NATA, the revised treatment of tax revenues has a strong impact on the benefits (see the main report,Investing in Transport: Making the Change) recommendations were taken on board. NATA and under a NATA that is revised further ** Based on limited data However, there are still fundamental flaws in in line with our recommendations to better the cost-benefit analysis model. account for carbon emissions. *** The carbon benefit of the rail freight scheme was already factored into the original analysis hence there is no change 4 The right route The right route 5

Introduction

This report builds on a detailed study Green sensitivity of the appraisal process. Even Table 2: Changes made to the cost-benefit analysis tool by the DfT in July 2009 Alliance published last year5 which demonstrated co-operative parties were concerned about the that a number of changes to the government’s impact that the provision of data would have transport appraisal model were necessary. As a on the likely success of their schemes. Area Original NATA Revised NATA result of our work and other contributions to the General approach refresh process, the Department for Transport We thought it might be hard to choose which (DfT) announced a number of changes to their schemes to use as case studies, but we actually Transparency and There was a need for greater engagement with appraisal DfT committed to publishing new guidance for assessors. consultation users of all types. transport decision-making tool, detailed in found it hard to find five schemes that were able Group of experienced users has been set up. Table 2, in July 2009. to provide a set of mutually consistent data to be Possible creation of internet forum for all users. examined. It became apparent that the model Decisions are still made on poor appraisals and lack of We were delighted that the model was used to access transport schemes is not the only transparency. revised along the lines we suggested, but problem: the whole of the transport decision- we remain concerned that a number of our making process is not operating as it should. Excessive Underlying reliance on putting money values on all factors New policy objectives are being introduced.6 monetisation rather than assessing levels of achievement of different Placing money values on all factors is still prevalent and recommendations were disregarded. The table objectives compared to cost. will cause problems as the values use more and different on the right sets out some of the areas of the In theory the system is meant to assess the Excessive monetisation leads to problems such as trading methods to derive the price of a range of social and transport appraisal framework that needed to transport problem (or need) in a particular off the value of small time savings against damaging a environmental ‘goods’. unique landscape. be reformed and how they fared under the area and then look at what type of transport However, there are some efforts being made to look beyond revision of the appraisal framework. There scheme or schemes would best solve it. This pure monetisation. remain a number of problems both with the evaluation should encompass assessing value overall appraisal process and specific elements for money (using the benefit cost ratio model), Testing against Need to always consider alternatives (demand manament and DfT have published stronger draft guidance for option of the model used to assess the cost but it should also look at how the scheme alternatives other modes). development. effectiveness of potential schemes. contributes to the government’s other Apart from the early attempts in the multi-modal studies, Still need to address monitoring and enforcement. objectives such as addressing climate change, alternatives hardly ever developed properly.

We propose that the model is further revised to ensuring well-being and encouraging healthy Appraisal Summary Variation in quality and consistency. The AST is to be aligned with the new transport objectives. deliver a transport system fit for the 21st century lifestyles. Fundamentally, it should assess Tables (AST) However, the proposed draft AST is more complex and less Completed by range of actors. (details of the proposed revisions are discussed whether the scheme fits with the government’s well defined. Over-reliance on Benefit Cost Ratio (BCR). in chapter three). overall strategy and is deliverable. Land use integration is being removed and replaced by the Need for further training, monitoring and enforcement. much more limited ‘support the delivery of housing’. Developing the case studies In reality, it appears that a number of schemes Remaining bias against bus based public transport schemes7. We set out to do a simple thing: look at how already underway before this process was Specific elements of appraisal model the model could be further improved by introduced that may have been rejected by it examining five case studies of transport are being pursued anyway. In the context of Distortions caused The position of the tax change in the cost and benefit table New proposal to move the change in tax income to the schemes that had passed through the appraisal regional or local funding allocations, this can by tax losses created a bias towards schemes that increase fuel use. same place as the tax element in the costs to transport users. This should avoid some of the worst cases of bias. process. But it was not that simple. What lead to horse-trading rather than a genuinely Public transport schemes which reduced fuel use and tax should have been a straightforward process, fresh look at transport needs as the basis for income suffered. However it fails to address the underlying contradiction of gathering the figures used in transport a strategic plan. using revenue over 60 years to reduce upfront capital costs.

appraisals and re-assessing them, turned out Time savings Model included very small time savings (less than 3-5 The department has not accepted that small time savings to be very difficult. This report examines the impacts of this and minutes) that frequently dominate appraisals. should be valued at a lower or zero level. argues that transport decision-making needs An average figure is applied to all time savings. Whether time savings are small or large is now to be reported We are grateful to the parties involved in the to be fundamentally reviewed to ensure that in appraisals, although still valued in full whatever their size.8 case studies for providing us with information. taxpayers get real value for money and that However, we were unable to get the necessary the DfT can achieve its broader objectives, Climate change Climate change had only a weak impact on appraisal in the Targets for transport have been set out by government,9 original NATA, with the cost of climate change being traded however the current system produces appraisals that would data for a number of additional schemes. particularly to reduce carbon emissions. off against time savings. fund schemes that fail to meet the targets. The process revealed the different Need to better account for overall impact of all the schemes interpretations that could be drawn from the in an area. NATA guidance (beyond the traditional measure of vehicle numbers from a road traffic Areas that needed or still require significant revision. model, which are produced in a consistent Areas where there have been some improvements but further changes are required. manner). It also revealed the political Areas where there have been positive developments but there may still be scope for further improvements. 6 The right route The right route 7

Improving transport decision-making

The sensitivities that people felt when Not enough time is being given to generate The system is rife with appraisals in which The system lacks an independent referee. providing data for this project, or indeed the various different potential transport one or more elements are of poor quality. The Department for Transport is the body that the failure of guidance to ensure that they options in an area. There is a low level of auditing of the overall assesses transport schemes and is the ultimate gathered the data required, highlighted the What happens currently is that a particular, quality of appraisals, apart from traffic modelling. decision-maker. However in a given year the lack of transparency and politicised nature often long standing, scheme is promoted and This means that the quality of the assessment department may need to assess as many as 100 of transport decision-making. the bare minimum assessments are done on varies wildly from scheme to scheme. This is not individual schemes and hundreds more in local alternatives, so that when the decision-maker being addressed, and appraisals are too often and regional packages. This is very resource It is clear that what should be an objective looks at and compares them, the favoured accepted rather than being sent back for revision intensive if it is to be done properly. This means process of analysing a particular transport scheme comes out as the best option. This and improvement. In particular, strategic policy that a number of schemes manage to get problem or need, and then looking at which means that potentially the best value for money fit and deliverability, which are also meant to be through the decision-making process without transport scheme(s) could best address it, is scheme is either not even worked up, or may be assessed, are often overlooked in favour of reliance any real assessment or evaluation until they get far from objective. worked up poorly so it doesn’t get the go-ahead. on the output from the cost-benefit model. to Public Inquiry. This is far too late, and Where a local or regional package approach is wasteful in terms of time and cost. The money There are four main problems with how the used, it is too often a collection of arbitrary local In addition, the full benefits of some public spent setting up such a referee would be more process currently works: schemes agreed as a result of inter-authority transport schemes are not being assessed than offset by money saved on letting poor value bargaining rather than an integrated package (particularly passenger rail outside urban areas). for money schemes go ahead. There is no proper assessment process that will achieve government objectives. This is because detailed multi-modal transport looking at transport at a national level. models are often not available for suburban and This should ask what the national transport A number of the multi-modal studies conducted rural rail corridors and so the required data is problems are and how they are best solved, at the beginning of this decade were based not available. In many cases the schemes already given other policy objectives. A broad around existing road schemes rather than a have an economic business case, therefore directional strategy for decision-makers on a proper consideration of alternative options. further further benefits are not needed to justify regional basis would help guide them towards More recently a number of the regional funding the scheme. Many private sector bus schemes the kinds of proposals that are likely to help allocation processes have been heavily are progressed on account of their commercial achieve these aims. Most regional spatial influenced by long-lived road scheme proposals. benefits alone. Simple estimates of the benefits strategies have failed to properly address resulting from the congestion relief and reduced transport systems at a regional scale. Under Our case studies demonstrate the lack of carbon emissions associated with these schemes the Planning Act 2008, Government now has consistency in the consideration of alternatives should be calculated so that the full benefits can to provide guidance on its policy for at the scheme level. The development of the be taken into account. This would make the infrastructure in a series of National Policy Merseytram scheme involved the proper analysis more consistent with other schemes Statements. However these will only cover assessment of a number of bus-based and help decision-makers in allocating limited large-scale transport infrastructure (ports, alternatives. In contrast, the original multi- resources in the coming years. national networks10 and aviation) and it is modal package developed to address congestion yet to be seen whether they will provide an in the Cambridge-Huntingdon corridor in adequate framework to address transport 2001 has not been fully implemented nor has needs at a regional level. there been a consideration of alternatives at the individual scheme level. 8 The right route The right route 9

Improving the model

At the heart of transport decision-making is a However, the department didn’t adopt all of There are two broad ways that this might be Time savings cost-benefit analysis model. The model puts a our recommendations and there are still a dealt with. The way the appraisal model deals with time value on all the costs and benefits of a particular number of worrying problems that remain with savings is very important as in many cases the scheme, from the direct cost of materials and the model itself. It was the remaining anomalies Pass or fail test economic value given to the time saved by labour involved to a value on the carbon with this model that we initially set out to If the scheme, along with other schemes in an passengers dominates the overall BCR. emissions and noise pollution the scheme highlight in this report. area, cannot demonstrate that it achieves the creates. It sums up these costs and benefits and lower emission targets (by reducing current There are a number of specific issues relating to produces a simple assessment summary table We welcome moves to increase the value emissions by at least 14% a year from 200814), the way time savings are viewed: of them all, and produces a single figure, the assigned to health benefits arising from walking it should be sent back to promoters as not being Benefit Cost Ratio (BCR). The higher the figure, and cycling schemes. However the health in line with core government policy. • Dominance of car user time savings. the better value for money a scheme is deemed. disbenefit of other schemes, which lock in Time savings to motorised road users tend to unhealthy travel, should be given further Factoring in impact on government targets dominate most transport appraisals due to the A qualitative assessment is also undertaken consideration. The model still fails to adequately If the individual impact is to be assessed, this large number of passengers involved. In which assesses the scheme against a number of deal with two vital areas: carbon emissions and would be done by looking at the excess emissions relation to road schemes this is no surprise, environmental and social criteria. time savings. We discuss these two areas below. over (or under) the target with the scheme in but it is also the case that public transport and place, and costing all of these in the appraisal. even rail freight schemes have their appraisals Under the Government’s transport appraisal Carbon emissions This is explained more fully in the MTRU powerfully influenced by car and lorry system, the New Approach to Appraisal (NATA), This is one of the key issues with the cost- technical report that accompanies this report. passenger time savings. This is often what decision-makers are meant to use a range of benefit analysis model as it stands. Currently would cause them to pass or fail the DfT tools when deciding which transport schemes in NATA the carbon impact of an individual We suggested that the first method is used criteria. This is certainly the case for the tram to support: scheme is assessed against a business as usual initially to select the best scheme from a range and rail freight case studies we looked at. scenario, which assumes that emissions slowly of options (and to trigger the development of • a summary table which sets out the results increase12. This is misleadingly called the ‘Do new options where a scheme or package of • Theoretical value of time. The dominance of of the qualitative and quantitative analysis; Minimum’ scenario in NATA. The scheme is individual schemes fail). Once a scheme or car time savings in appraisals might not be a then assessed to be ‘good’ if it results in less package is selected we suggest that the second problem if the savings represented real money. • the overall BCR figure produced by the carbon emissions than the business as usual approach is used to calculate the carbon benefits However, the savings do not appear in any real cost-benefit appraisal model; and scenario. However, the business as usual scenario or costs in relation to the reduction targets. world balance sheets, or household budgets, is ‘bad’ as it assumes emissions rise, and the and are never tracked or audited. In fact, • a broader assessment of strategic policy fit targets essential to climate change mitigation are If the second approach is used, it is also private user time savings are based on surveys and deliverability. not met. Thus schemes that result in increased important that the cost of the additional carbon of what people say they would theoretically be emissions, but emissions that are not higher produced is added to the capital cost of a willing to pay to save time. Business time However the figure produced by the cost- than the baseline, appear to be ‘good’. scheme and not traded off against time savings savings are based on estimates of the labour benefit model is heavily relied on; it is the key If this approach were followed for all appraisals (as is the current approach). If a scheme resulted costs of travel undertaken for work purposes. engine in transport decision-making. nationally, the Climate Change Act targets would in carbon emissions above the reduction target not be met. then reductions elsewhere would have to be • The analysis still includes small time savings. The model was fundamentally flawed until the bought by investing in additional projects that Small time savings may not be of particular DfT revised it in 2009. You can see how it was The contribution of an individual scheme to reduce carbon emissions. value to individuals; instead reliability may be changed in the more detailed MTRU report, overall national carbon targets is ignored in the more important. Aggregating small time Investing in transport: making the change, which is analysis13 and is, instead, meant to be addressed savings across lots of people suggests a greater published alongside this report. We highlighted at a regional or national level by someone with benefit than is the reality. Whilst the revised the problems the DfT needed to address in our an oversight of all schemes. However this NATA is more transparent as it sets out the report on this subject published last year11. structure is not in place. impact of small time savings, they are included in the overall figure produced upon which the judges of potential schemes frequently rely. 10 The right route The right route 11

What does reforming transport decision-making look like in real life?

• It assigns an economic value to time savings Green Alliance suggests that this approach The case studies that we focused on highlight the Below we discuss the following case studies: in the very distant future. As the value of results in the wrong schemes being selected and problems with the cost-benefit analysis model time savings is based on surveys of people’s is not beneficial for public transport and road that the Department for Transport has used • a tram scheme in Merseyside that has yet to willingness to pay now, there are serious users alike. Road schemes that are predicted to for assessing transport schemes up until now. progress; problems with the rationale of using this to result in lots of small time savings are selected In certain cases they also illustrate the problems value time saved in 30 or 60 years time. rather than ones that improve reliability and with the whole decision-making process. • a cycling case study on the Grand Union canal As time savings are discounted by three potentially reduce fuel consumption. that has been implemented; and per cent but grow in line with GDP, they fall What the case studies strongly show is the huge less quickly than certain other benefits so DfT should reassess how time savings are impact of reassessing transport schemes with the • three schemes which run through the they continue to dominate in the long-term. accounted for. With immediate effect, the DfT’s new version of the cost-benefit analysis Cambridge Huntingdon corridor: road We cannot possibly know what our future appraisal process should include a sensitivity model, fundamentally changing which schemes expansion, busway scheme and rail freight transport and communication systems will be test, which calculates the overall BCR without are seen as value for money. The road case study expansion. The bus and rail freight schemes in the distance future, given the vast changes small time savings. The treatment of benefits goes down in value for money and the rail, bus are in construction, and the road expansion that have taken place in the last 30, let alone in the distant future needs to be reassessed and cycling schemes increase significantly. It also scheme is going to a public enquiry. 60 years. This uncertainty is not however (eg by considering the benefits over the next shows how further reform of the NATA model relected in current appraisals. 20, 40 and 60 years rather than just over the would have an even greater impact. In each case we assessed the scheme using: next 60 years). • The approach results in perverse impacts. These case studies support our argument for the • The original transport appraisal model It is also questionable whether the short-term In each of the case studies presented in the next reassessment of any schemes waiting to be built (NATA 1); time saving resulting from a scheme leads to chapter we look at what the impact would be of with the DfT’s new version and for further long-term benefits. In effect what has reforming the appraisal model along the lines reform of the cost-benefit analysis model. • The revised transport appraisal model happened is that time savings on a route have suggested above. currently used by government simply allowed people to take longer routes. They also show that transport is ultimately about (NATA Refresh); and It has also contributed to a more dispersed people and the way they are able to live. The patterns of land use with facilities (including vagaries of a transport cost-benefit analysis • Further reform to the transport appraisal shops and healthcare) getting bigger and model can affect which transport choices people model to account for the impact on national fewer. One unfortunate side effect has been to make. If, for example, a new road scheme, rather transport carbon targets (NATA Reform). reduce the self-sufficiency of local than a bus or tram system is supported by the communities and the ability to access local model and therefore goes ahead in an area, it We have also considered strategic fit and the facilities without driving. means that those without a car will continue to impact of the scheme on carbon emissions. find it hard to get around, and those with cars will have no choice but to continue to use them. 12 The right route The right route 13

Case Study Merseytram: the development of a new tram scheme for Merseyside

Spanning the Mersey Estuary, Merseyside lies The residents of Merseyside showed great The line would also have had a direct link to the As shown in the MTRU technical report there in the Northwest of England, nestled between support for the tram system; opinion polls Royal Liverpool University Hospital, which has were a number of anomalies with the Lancashire, Greater Manchester and Cheshire. showed that 90 per cent were in favour of it18. 4,600 staff and 100,000 patients per year, and assessment process that meant that the value for would have served 20 GP clinics. Currently, the money of the proposed scheme was seriously In 2008 Liverpool was named as the most Analysis using the model showed that the tram’s hospital doesn’t have car parking facilities, making underestimated. One major oversight relates to deprived place in England.15 There are high benefits exceeded its costs (modestly, but it it difficult for some patients and families to reach car users, first, the analysis assumes that users levels of deprivation in surrounding towns, one exceeded its costs nonetheless), and following a it, especially those with physical disabilities. The would only be attracted from other public of these, Kirkby, was referred to by the chief public enquiry in 2004, the government tram system would have been fully accessible, transport schemes and not out of their cars and, executive of the borough council as a “ghetto announced its approval of Merseyside Line 1 with easy access platforms and low floors. second, it underestimates the rising problem of that people are forced into, and have to leave in and it looked like the scheme would proceed19. congestion. The case study illustrates the order to look for jobs, shops or entertainment”16. There is no doubt that the line would have had appraisal model’s failure to give credit for The route of Line 1 would have been from a significant impact on people’s lives, including schemes that improve the quality of service for Merseyside has been subject to many Liverpool city centre via the Royal Liverpool many that are not formally incorporated into the existing public transport users and the bias regeneration efforts over the past few decades. University Hospital to the borough of analysis model. Yet it was never built. Why? towards small time savings rather than improved In December 2002, the government announced Knowsley, terminating at Kirkby. More than reliability. If the BCR had come in much higher, that it would provide £170 million towards the 100,000 residents live within 800 metres Ultimately money was the reason. Unusually, as suggested in the MTRU report, even using the £225 million needed to build a tram system of the proposed line, and 60 per cent of in 2005, the Department for Transport (DfT) old model, perhaps the government would have connecting Liverpool with towns in outer households don’t have access to a car, and asked the local authority to underwrite any been less strict regarding the release of money. Merseyside. This was to be one of the ten new thus rely heavily on public transport. future unforeseen costs of the project, despite Using our proposed model (and even the DfT’s tram systems promised in the government’s ten the use of fixed price contracts, which the local revised version) the figure comes in higher still. year transport plan17. It would have passed by 38 primary schools authority felt unable to do. This was an unusual and ten secondary schools, enrolling more than request: for example it was not used for the Tabel 3: Comparative results under Three different lines were planned: Line 1 would 17,000 students between them. It would also Public Finance Initiative (PFI) road scheme in different NATA assumptions extend northeast to Kirkby, Line 2 eastwards to have served the 20 adult training centres and the nearby borough of Halton. With the local NATA 1 NATA Refresh NATA Reform Preston, and Line 3 south to John Lennon airport. Knowsley Community College in Kirkby which authority unable to sign up to this unlimited Benefit Cost 1.97 2.07 2.85* has 3,500 students. liability the DfT chose not to release the agreed Ratio (BCR) central government funding. Policy fit Positive Positive Unknown The line would have also had a significant impact Kirkby *Based on moving to 60 years appraisal. The Merseytram Line One on employment levels. Prior to the 1960s, Line Two provides several examples of how small changes in the Line Three Kirkby’s industry sector was flourishing however treatment of tax revenues has a strong impact on the BCR in the following decades unemployment in the (see the main report) Croxteth area has been considerably higher than the national average. Line 1 would have created

Prescot 300 new permanent jobs, as well as the 1,000 Cherryfield Drive, Kirby, before Cherryfield Drive, Kirby, after temporary jobs for its construction. It also would Liverpool City Centre Whiston Edge Lane Page Moss have opened up thousands of new jobs at other Option Hospital regeneration sites, such as the Liverpool Echo Wavertree Technology Park arena, Grosvenor’s Liverpool One Retail Option Development and Stonebridge Business Park. At the moment, it would take residents of Kirkby of Mather Avenue Option Menlove Avenue Option Croxteth 40-60 minutes to reach the centre of Railway Route Option Liverpool, and for many people this it too long for them to consider taking a job there. The tram system would have reduced this journey time to Speke just 31 minutes, and would have cost the same as John Lennon Airport a bus ticket, opening up new opportunities. 14 The right route The right route 15

Case Study Improving the Grand Union Canal passing through Park Royal

Interview with Bill Bailey (81 years old) Park Royal is Europe’s largest industrial estate A scheme was proposed to improve six and the principal industrial area in West London, kilometres of the towpath through resurfacing, I have lived in Kirkby for 50 years. I have poor eyesight, and I find covering almost 700 hectares. It accommodates widening, installing cycle parking, improving that I have to make regular visits to the hospital. I’ve never owned a a range of businesses from manufacturing to ramp access and putting in lighting where car, and so I’ve always relied on trains and buses. Over the years, distribution/logistics and TV/film: it is home feasible. The route, flanked on either side by I’ve noticed that lots of the bus routes have been broken up, which to world class companies, household names industrial units, and high-density housing, aimed has made it increasingly difficult for me to reach the hospitals. and hundreds of small and medium sized firms. to provide a safe route for the weekender and a In total there are some 2,000 businesses useful, traffic-free route to work for cyclists. Now to go to the Royal Hospital; I take the bus to get to the centre of employing around 40,000 people. The Park town, which drops me off on Moss Street. From there I have to make Royal area has been identified by the Mayor of The canal path improvements were undertaken a long walk up quite a steep hill and across two major roads. It’s London as an Opportunity Area, with a target to in 2003-04 by British Waterways and the accommodate 11,000 new jobs in the area over London Borough of Brent. The capital cost was quite a tiring journey. the next 20 years. £139,130 (2002 prices). Monitoring I’m sure there are a lot of disabled people who would have benefited undertaken by Sustrans after the scheme’s completion found a marked increase in use of from a wheelchair friendly tram service that stopped near their As well as a large amount of industrial premises, it is also home to some of the most deprived the canal, especially by adult females cycling to residential area, and dropped them off next to the Royal University wards in the UK, in terms of both social and work, and concluded that “the objectives of the Hospital. It is tiring and expensive having to get on a series of employment deprivation. scheme have been fully met.”20 Commenting in busses, and often they are difficult to get on. 2007 on a more recent scheme undertaken on Much of Park Royal is close to the strategic road the same section of the canal, Jackie Sadek, chief network, with the A40 Western Avenue to the executive of Park Royal Partnership, reported a south and the A406 North Circular to the west. further 50 per cent increase in use of the canal Jack Jones: Pensioner and long time Kirkby Resident It is served by ten different bus routes and six by employees walking and cycling along the underground stations. However the underground canal since the work began.21 One organisation I’m involved with is called Older People’s Voice. stations are on the periphery of the estate and the Every year we have a meeting to decide which issues are most convoluted network of streets and cul-de-sacs As can be seen from the table below, the impact important to the elderly residents of our area. Without fail, transport make movement within the area difficult. on the BCR of improving NATA (under the is identified as one of them. refresh version) has been huge. This is mostly The public transport provision is considered to a result of moving the position of the tax Like many residents in Kirkby, I don’t have a car and so I rely on be poor; with bus routes slow and unreliable, revenues, particularly as a result of congestion buses and trains almost every day. The bus into the centre of while walking and cycling routes are often relief for commuters and thus fuel savings. Liverpool can take up to an hour and a half. I’m often late for indirect and badly signed. The nature of the This means that the fuel tax loss is significant, public realm means that walking tends to be and changing this to a disbenefit rather than meetings because the buses are delayed or cancelled. A lot of unattractive, unpleasant and even unsafe. These increasing the capital cost of the scheme in turn services are taken off the roads after 5.30pm. Sometimes I just give factors contribute towards a high dependence has a major impact. up and make the walk to the train station. I’m quite lucky; a lot of on the private car for travel to and around Park elderly residents aren’t able to get to the train station because it’s Royal. The large amount of congestion, rat The inclusion of a financial figure for the health too far. Instead, they are forced to wait in the cold. running through the estate, and delays are benefits associated with cycling in the refreshed widely believed to be a major deterrent to NATA, also increases the BCR, which has been The tram system would have been much better because it would further commercial investment in the area. included in the NATA refresh model. have been reliable, clean and fast. It also would have been a lot easier for older people to use, because it would have stopped on In 2002, the poor state of the towpath, and the Table 4: Comparative results under residential streets, and the cars would have been accessible even to common feeling that it was not safe, had led to different NATA assumptions declined use of the cycling route along the those with walking difficulties. Grand Union Canal. There was a sense among NATA 1 NATA Refresh NATA Reform several associated groups, from Sustrans to Brent Benefit Cost 38.4 75.0 75.0 Council, that access to the Park Royal Estate, and Ratio (BCR) congestion, could be improved by encouraging Policy fit Postive Postive Positive cycling to the area. 16 The right route The right route 17

Case Study How to solve congestion in the Cambridge area?

This case study looks at three proposed The transport problems in this area were a) Improving the A14 between Ellington solutions to a congestion problem in Cambridge. examined in one of a pioneering set of studies and Fen Ditton It highlights how the decision-making process in 1998. These studies looked at sections of The proposed scheme to improve the A14 was Table 5: Comparative results under which started out as a well considered solution trunk roads that had severe problems and one of the core recommendations of the original different NATA assumptions to the congestion problem, using various considered what package of transport solutions study. It included a new dual carriageway south

different modes of transport that were each could solve the issue, rather than just defaulting of Huntingdon, widening of the existing A14 to NATA 1 NATA Refresh NATA Reform interdependent, has descended into a number to new roads. three lanes in certain areas plus some major new Benefit Cost 10.83 a) 6.69 1.30* of isolated schemes, losing some of the interchanges. Work is expected to start in 2010-11. Ratio (BCR) b) 3.25* core solutions. The study for the Cambridge/Huntingdon Policy fit Neutral Moderate Strongly region put forward a preferred package, which Putting the figures for these schemes through adverse adverse The Cambridge sub-region (Cambridge and suggested a suite of new schemes. These included revised versions of the cost-benefit analysis *BCR is approximate due to the lack of carbon data year by the inner ring of market towns surrounding it, model shows the value for money dramatically year over the 60 years and for illustrative purposes only. new lanes on the A14; including Huntingdon, St Ives and Ely) has been • drop five-fold. In particular, the financial impact subject to sustained and significant increase in • a new relief road south of Huntingdon; of the carbon emission increases that the new traffic over the last fifty years. This has stemmed road layout would cause is significant. a new busway linking St Ives and Huntingdon; from the emergence of a world-renowned • and research and education sector, which has increased commuter numbers in the Cambridge • a road user charge to manage demand. area. The increase in traffic has also been caused by the emergence of the A14 as the main route There was also mention of improvements being Highways Agency map showing location of A14 scheme between Ireland and the Benelux countries. made to the railway between Felixstowe and A1 Petersbourgh This is a key link in the Trans-European Network, Nuneaton to allow it to carry larger freight Leicester

linking the Port of Felixstowe, the UK’s busiest containers to help take freight traffic off the road. A11 22 M1 A6 Location of container ship port , to the rest of the UK. proposals on A14 The minister for transport accepted these A1(M) Kettering The local transport system, whether the narrow recommendations in 2001. Since the original M6 A14 streets of Cambridge or trunk routes such as the assessment, each scheme in this corridor has Huntingdon Northampton A14, has struggled to cope with these demands. developed almost in isolation from its parallel A14 schemes. Most of the schemes were subject to a A45 A6 Bury St Edmunds This has earned the A14 the reputation of reassessment of their cost-benefit value around Cambridge A11 Bedford ‘the road from hell’. Many sections are 2002 as an individual scheme. Ipswich M1 A1 currently operating close to capacity, with an A421

average of 65,000 to 85,000 vehicles per day As such, the schemes were no longer being Felixstowe

using the route. Up to 25 per cent of the traffic treated as interdependent which means that their Luton M11 consists of heavy goods vehicles, which is construction no longer relied on all the elements Colchester about twice the national average for this type of the original proposal being completed. This A10 23 of road . It has no hard shoulder, so with has allowed elements of the scheme that were less A1(M) A12 increasing congestion, even the smallest popular among decision-makers, as they might accident can cause serious delays and have been hard to introduce politically (eg the frustration. According to John Bridge, chief proposed car entry charge into Cambridge) to be executive of the Cambridgeshire Chambers of quietly dropped. Below, we discuss three schemes that came out of the original multi-modal study: Commerce “Travelling along the A14 between London Ellington…is, at best, unpredictable, and, at expansion of the A14, a guided busway and worst, downright miserable.”24. expansion of rail freight. 18 The right route The right route 19

David Price: Local resident and father of two small children b) a new guided busway linking Cambridge to St Ives The cost to the taxpayer for the proposed A14 road scheme is The study also suggested that a busway scheme expected to be in the order of £1.2 billion. If approved it will mean should be developed to reduce demand for car that drivers will have to spend more on fuel as the proposed road is travel in the area. The proposed busway scheme longer than the existing one. At times I wonder if those that propose will link the city of Cambridge with St Ives, such schemes are truly competent for the role. In addition, it would Huntingdon and Northstowe (a proposed new town) to the northwest and with the M11 mean that local residents will have to suffer from noise pollution, a motorway to the south. For parts of the route it chronic decrease in air quality and expect an increased risk of their will be guided running on a dedicated track, homes being flooded. I live within a few hundred metres of what mostly along the route of a closed railway. This could become a ten lane highway. guiding means that buses can travel closer together, they are easier to board, and more I have a three year old daughter and a 3 month old son. I am deeply reliable as there is no other traffic. There will be concerned about the impact the proposed scheme could have on our a new path built next to the entire length of the lives. I’m an environmental chemist by trade and this means I have a guided busway track for walkers, cyclists and reasonable knowledge of the cocktail of compounds which would horse-riders. The bus will connect a number of become part of our daily diet due to this crazy plan. Perhaps I’m old town centres with Addenbrooke’s hospital and Fan Drayton Nature Reserve. enough to subject my lungs to an increased dose of substances such as nitrogen dioxide, ozone, carbon monoxide and polynuclear The scheme will start running in November aromatic hydrocarbons such as benzo(a)pyrene, but I am not at all 2009 and will be fully operational by the happy to put up with the adverse effect it would have on my middle of 2010. daughter and son. I propose that the existing A14 is maintained, more money is invested in local public transport and that a rush hour Table 6: Comparative results under sole driver restriction scheme is put in place. different NATA assumptions

NATA 1 NATA Refresh NATA Reform Benefit Cost 4.8 6.4 7.9* Ratio (BCR)

Policy fit Positive Positive Slight adverse Note: None of the BCRs include carbon costs and annual summary data is not available to make an estimate. The first two BCRs would rise as a result of valuing carbon. In the reformed process, the BCR would fall, since the reduction in carbon does not meet the target. This is also the reason for the slight adverse policy fit result. The final result, as with many public transport schemes, depends on the major expenditure items in the region and the associated demand management policies. * Loss of parking revenue was also added to the capital costs and in this case it is treated as a loss of benefit, as is done for fuel tax loss 20 The right route The right route 21

Sheila Arnold: Retired Cambridge resident c) expansion of the freight rail capacity between Felixstowe and Nuneaton When my nephew was very young, I took him on the last ever passenger The multi-modal study also suggested that rail train service passing through Histon, which ran past my old house. For a freight should be used more in the A14 area. The long time after, the tracks were only used for freight, but now they have port of Felixstowe is the UK’s busiest deep sea been turned into the new route for the guided busway. container ship port25, and handles 35 per cent of the large containers that end up on the UK’s I don’t have a car, and so rely purely on public transport to visit my doorstep. Every year Felixstowe has to deal with daughter who lives in Huntingdon. When I go by bus, the journey an increasing number of containers to satisfy takes about an hour because the bus has to use the A14 which is a our demands. Goods are transported by road, terrible road. If there’s a crash, then the whole city stands still. The along the A14, and by rail: from Felixstowe’s two busy rail terminals. Each piece of cargo guided busway will be fantastic; it will stop 2 minutes from my transported by rail is one piece of cargo not on house, and will cut my journey down to 25 minutes as it won’t have the road. Transporting freight by rail saves tens The revision of the original model dramatically to use the A14 at all. of thousands of lorry journeys each year, increases the value for money for this scheme. alleviating pressure on the A14. It doubles under the new version of NATA I was lucky enough to try out a section of the busway earlier this year. from 5.25 to 10.4, making this scheme amazing The ride was extremely comfortable, and the buses themselves are However, for rail to continue to compete value for money. This is mainly due to the fantastic. Great seats, air-conditioned and they even have the internet. effectively with road, a number of improvements adjustment of tax gains and losses, but also have been identified that must be made to the rail because removing Heavy Goods Vehicles I’m really glad that the bus stops will have easy access; my daughter is infrastructure. This would involve the raising of (which are responsible for most of the damage disabled, so it means that she’ll be able to travel easily in her wheelchair. some bridges, increasing train capability to carry to road surfaces) causes a huge reduction in standard European sized shipping containers and road maintenance costs. Having been one of the last passengers before the rail line closed, linking up the section of track to the West Coast I am definitely going to make sure I’m one of the first passengers to Mainline. These improvements were already Overall this indicates that rail freight schemes use the new busway riding in its place. underway when the original Cambridge area are likely to see their BCRs rise very significantly study was done. as a result of tax change in the refreshed NATA. It suggests that the government should look Selena Chapman: Arbury Park resident Table 7: Comparative results under again at many rail schemes that it has previously I’ve just moved to Arbury Park, and if I want to go out in the evenings different NATA assumptions assessed, as they might now be much better value for money than previously realised. then I usually drive to the park ‘n’ ride. There is a regular bus service, but I rarely use it as there are no bus timetables or stops assigned as NATA 1 NATA Refresh NATA Reform Benefit Cost 5.25 10.4 10.4 yet, and the bus costs more than the Park & Ride. Late at night, the Ratio (BCR) only way for my friends and I to get home is to get a taxi. This usually Policy fit Positive Positive Positive costs a minimum of £10. The busway will run later than normal buses, and should be cheaper if we can buy weekly tickets. This would be a safer way to get into town and home again late at night. I also think it’s good they are building a track alongside the busway, which can be used by cyclists and pedestrians. At the moment I don’t feel comfortable riding my bike along the main roads, the only alternative would be cutting through fields, which are quite isolated and not safe either. Instead I tend to drive everywhere, as I feel safer. The track will be a better place to cycle and walk, as there will be no cars, it will be well lit, and there will be plenty of other people using it. I will be much more likely to walk or cycle into town when its finished. 22 The right route The right route 23

Case Studies Findings and recommendations Summary

The table below summarises the Benefit Cost Looking at the three Cambridgeshire schemes The current process of transport decision- Given these implications, a wholesale re- Ratio (BCR) for each case study under the together (A14, guided busway and rail freight) making, and the cost-benefit analysis model evaluation of how transport decision-making is original NATA, the revised NATA and under a we can see that the improvements to the A14 used has a number of impacts on the transport carried out is needed, from the broader process NATA that is revised further in line with our offer the least value for money of the three. schemes selected. to the details of the cost-benefit analysis model. recommendations. This begs the question as to whether there are Improving value for money Green Alliance recommends that Government It can be seen that the revisions to NATA has other options that could help reduce the The best value for money schemes are not being take the following actions are taken to improve increased the BCR of the public transport and congestion further that would offer a better picked for two reasons: transport appraisal: cycle schemes but lowered the BCR for the A14. solution than the A14 and suggests that the If carbon emissions were properly accounted whole multi-modal study should be revisited. Lack of consideration of alternatives • reassess all of the approved/proposed for, we estimate that the numbers would change As the appraisal process does not ensure that the transport schemes where contracts have not even further. full range of alternative schemes are assessed, the been finalised to test their value for money, best value for money scheme in a particular area using the revised analysis model. Any schemes might not even get put forward. So, in essence, that do not meet the revised criteria should be taxpayer’s money is being wasted on transport removed from the transport programme; choices that are not cost effective. • reform the decision-making process so that it Table 8: Summary of comparative results under different NATA assumptions Flawed appraisal tool is more accountable, transparent and joined- The revised cost-benefit tool is an improvement up. More consideration should be given to on the original, notably because it is less biased ensuring that guidance is followed and good Benefit Cost Ratio BCR under revised BCR under appraisal model (BCR) under original appraisal model with further reforms against schemes that reduce fuel consumption. quality appraisals are developed in every case; appraisal model However it still fails to properly account for Merseytram 1.97 2.07 2.85* carbon emissions and time savings. • consider the alternatives in each appraisal to Grand Union Canal Cycle Path 38.4 75.0 75.0 ensure that the best value for money scheme is Improving the A14 between 10.83 6.69 1.3 – 3.25** As a result poor value for money schemes are selected; Ellington and Fen Ditton being approved, wasting increasingly limited Guided busway Cambridge 4.8 6.4 7.9** public money. • create an independent body to evaluate the to St Ives solutions to transport problems. This should Expansion of rail freight 5.25 10.4 10.4*** Meeting government objectives work within an overall strategic framework, (Felixstowe – Nuneaton) The government’s broader objectives, as detailed and should only allow schemes that 26 *Based on moving to 60 years appraisal. The Merseytram provides several examples of how small changes in the treatment in Towards a sustainable transport system , are not contribute to the government’s objectives; of tax revenues has a strong impact on the benefits (see the main report) being supported by the transport infrastructure ** Based on limited data that is in place in the UK today. Infrastructure • reform the transport appraisal model further *** The carbon benefit of the rail freight scheme was already factored into the original analysis hence there is no change determines the transport choices available to to take better account of the impact of any people. If the infrastructure is not there, people proposed scheme on national carbon targets cannot choose the option that would best and sensibly assess time savings. support the policy. 24 The right route

End notes

The referee should work within an overall 1. Department for Transport, Transport Trends – 2008 Edition. 13. An exception to this is some of the rail freight schemes Online: http://www.dft.gov.uk/adobepdf/162469/ where carbon is already factored in, in an adequate way. strategic direction set by the Department for 221412/190425/220778/trends2008.pdf Transport based on their broader policy 14. This is figure that the DfT has committed itself to 2. Department for Energy and Climate Change (DECC), (as set out in the Low Carbon Transition Paper). objectives. Suites of schemes must be shown to 2009, The UK Low Carbon Transition Plan, Annex B – help achieve these objectives. Departmental carbon budgets. 15. http://news.bbc.co.uk/1/hi/england/ merseyside/7376584.stm 3. Department for Transport, DfT aims and objectives, Through developing real life case studies we Online: http://www.dft.gov.uk/about/ 16. http://www.liverpooltimes.net/2008/07/06/ learned a number of lessons: aimandobjectives knowsley-chief-executive-labels-kirkby-a-ghetto/ 4. Green Alliance and Campaign for Better Transport, 2008, 17. http://www.dft.gov.uk/about/strategy/whitepapers/ previous/transporttenyearplan2000 • The Benefit Cost Ratio (BCR) produced by the Decision-making for sustainable transport, Online: http:// appraisal process is extremely sensitive to www.green-alliance.org.uk/grea_p.aspx?id=2670 18. http://www.mersey-tram.com/news.php?page=7 small changes in the assumptions used. This is 5. Ibid. 12th May of real concern as decisions are heavily 6. As defined in Delivering a Sustainable Transport System 19. http://www.mersey-tram.com/news.php?page=2 weighted on this single figure. (DaSTS): competitiveness, climate change, health, 21st Dec quality of life and equality. 20. Ibid. • Whilst we thank the parties involved in the 7. This can arise because the proportion of business 21. http://www.britishwaterways.co.uk/newsroom/ travellers and their time values are both lower for bus all-press-releases/display/id/1566 case studies for the provision of information users. Bus travellers are assigned a lower value for their for this study, the data gathering process was time than rail and car travellers. An hour saved by a 22. World Port Rankings 2005”. American Association of lengthy and only a handful of parties were business traveller is considered to be higher than Port Authorities. May 2007. http://aapa.files.cms-plus. someone travelling for leisure as it factors in his or her com/Statistics/WORLD%20PORT%20RANKINGS%20 able to provide us with data. avoided earnings during that hour. 2005.xls. Retrieved on 2008-02-06 8. As well as reporting the size of time savings, some 23. http://www.highways.gov.uk/roads/projects/4221.aspx It is vital that the current approach to transport indication of ’who benefits where‘ is also planned. appraisal is overhauled so that it become more 24. http://www.heartcambridge.co.uk/Article. . transparent and consistent. 9. DfT, July 2009, Low carbon transport: a greener future asp?id=1370472 10. This will cover strategic highways and railways 25. World Port Rankings 2005”. American Association of (including strategic rail freight interchanges) Port Authorities. May 2007. http://aapa.files.cms-plus. Both the transport appraisal model and the com/Statistics/WORLD%20PORT%20RANKINGS%20 overall approach must be changed for it to 11. Decision-making for sustainable transport, Green Alliance 2005.xls. Retrieved on 2008-02-06 April 2008 deliver cost-effective, smart transport solutions 26. http://www.dft.gov.uk/about/strategy/ that improve the quality of our lives and protect 12. Baseline carbon emissions are based on congestion transportstrategy/tasts/ models that assume a growth in vehicle use in line with our fragile environment. GDP. Increases in vehicle efficiency reduce emissions slightly however the overall trend is for carbon emissions to grow. Green Alliance 36 Buckingham Palace Road London SW1W 0RE T 020 7233 7433 F 020 7233 9033 [email protected] www.green-alliance.org.uk

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