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DfT’s roads value for money report fails to impress

David Metz Honorary professor of transport Centre for Transport Studies University College London www.drivingchange.org.uk
26 June 2020

You briefly noted publication by the DfT of a report concluding that the second Road Investment Strategy (RIS2) represents high value for money (“RIS2 ‘is good value’” LTT 12 Jun). Accordingly, I turned to this 29-page report, expecting to see substantiation of the £27bn, five-year road investment programme. I was disappointed. 

The summary states that, overall, RIS2 is high value for money, meaning £2 return for every £1 spent (a benefit-cost ratio (BCR) of 2). Yet new commitments of major capital enhancement schemes yield a BCR of 1.5, which is unimpressive. The analysis is minimal, offering no breakdown for individual schemes, where some might be expected to have a BCR of 1 or less if the average is 1.5.

These estimates are based on the now rather dated road traffic forecasts published in 2018, which included five distinct scenarios, yet no indication is given as to how the BCR would vary with scenario. The estimates are also derived from new but unpublished regional traffic models, asserted to be “world- leading”. 

I contributed a Viewpoint article to LTT of 24 May 2019, pointing out a major discrepancy between traffic forecasts and post-opening outturn traffic levels for the smart motorway widening of the M25 between Junctions 23 and 27. The forecasts were generated by a regional model of the kind now in general use by Highways England, based on SATURN software that originated in the 1980s. 

The purpose of the models is to estimate travel time savings that arise from adding carriageway capacity, which feeds into an economic model. Yet in the M25 case, no time savings were observed beyond year 1 after opening, putting the validity of such models  in doubt.

The DfT’s new report frequently asserts that its analysis is robust (15 times, in fact), which is usually a sign of intellectual insecurity. 

In fact, the analysis is pretty thin and seems intended to justify a road construction programme developed in an earlier era, before we have had a chance to assess the impact of the coronavirus pandemic and what this might mean for travel demand and for public expenditure priorities, such as urban vs. inter-urban transport vs. broadband.

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