Planning transport for future city regions – do we have the tools we need

Institute for Transport Studies FACULTY OF ENVIRONMENT Planning Transport for Future City Regions – Do we have the tools we need? UCL 24th September 2015 New Approaches to Appraisal – Addressing Strategic Fit Tom Worsley Visiting Fellow ITS The Genesis of Strategic Fit HM Treasury Public Sector Business Cases – Using the Five Case Model Supplementary Green Book Guidance on Delivering Public Value from Spending Proposals Department for Transport Transport Business Case 2010 The Transport Business Cases Financial: affordability, funding, financial risks, contributions Management: governance, risk management, stakeholders Commercial: procurement, capability, risk allocation Economic: Green Book/WebTAG Cost benefit analysis Strategic Case: Fit with policy, need for the scheme, timing Financial, management and commercial cases largely a set of yes/no decisions Economic case both yes/no (BCR>1.0) and ranking with constrained budget Role of Strategic Case not specified Refresher: Economic Case Economic, environmental, social impacts, using monetised, quantitative and qualitative assessment and public accounts Concept of economic welfare, using willingness to pay and other methods for valuing non-market impacts Dominance of time savings National interest – a BCR– for go/no-go and ranking decisions Standard documented methods – consistency across a wide range of decisions Dependence on a transport model, showing how people respond to changes in networks and changes over time Content of the Strategic Case Complementing the economic appraisal – making it more meaningful/accessible: • Case for change, • Why now • Drivers of change • Options considered Contribution to wider transport and government policy objectives Who/where are the beneficiaries? Note:5 pages of text on Strategic Case in DfT Guidance – contrast with WebTAG’s detailed coverage Strategic Fit- the Issues Economic case is not the only influence on decision-makers: • Wide range of BCRs for approved schemes eg RIS BCRs range from to 14 Other considerations • “Arms’ lengthening” of decision-making to Highways England and to Network Rail – year budget has put an end to ‘chasing the BCR’ • Devolution has made ‘place’ matter more – what will the scheme for Grimsby? • Scepticism about welfare economics, time savings • Modelling and appraisal challenges – eg changes in reliability • Policy priority of the economy, productivity and growth Strategic fit – the Opportunities To “market” the economic appraisal story – much of the Strategic Case is about explaining the costs and benefits To focus on the things that matter most to policy makers To extend the appraisal and modelling to cover: • “GVA effect” • Place – where are the benefits most likely to occur? An opportunity, not a watering down of evidence based analysis Strategic fit – the challenges Estimating the local, regional or national GVA effect – is there a cookbook? • DfT’s Transport Investment and Economic Performance sets out framework – business cost savings, static and dynamic effects – but no usable DfT endorsed model • Several methods exist – consultants’ initiatives – risk of ‘black box’ • Most are based on agglomeration – improvements in connectivity in a well connected place increase productivity • Models struggle with gains from trade – each Northern city’s growth increasing because of better transport between them • How robust are the models – where they fit in DfT’s assurance framework? Is narrative enough? Strategic fit – the challenges Whose policy objectives should the scheme fit? • Arms’ length transport providers’ or local objectives? • Allocation of rail capacity – local or intercity? • Highways England roads – local employment creation near an interchange? • Devolved City Region decisions – competition or national controls? • Should cities with growth ambitions be constrained by DfT planning totals when making the case for investment? • Does a scheme which is ‘good for Sheffield’ have to demonstrate a good BCR? Strategic fit – the challenges Role of the Strategic Case in the TBC – overarching summary or new information? Double counting – additional benefits in the strategic case or different ones from the economic case? Relationship between economic benefits and GVA effects – are big differences plausible? Metrics and counterfactual pose problems – a present value of GVA? What other policies or programmes grow the economy? How to judge strategic fit – what constitutes ‘good’? Strategic fit - assessment Few transport business cases are published, either as a whole or in part DFT has to date shown reluctance to set any rules – contrast with economic case Opportunity to extend the role of evidence based analysis beyond the cost benefit analysis and meet policy objective Progress has been made in estimating impacts, although focused on intra-city rather than on inter-city connectivity Some rules might be needed about control totals – where the ‘new’ jobs come from ?– and about methods [...]... fit - assessment Few transport business cases are published, either as a whole or in part DFT has to date shown reluctance to set any rules – contrast with economic case Opportunity to extend the role of evidence based analysis beyond the cost benefit analysis and meet policy objective Progress has been made in estimating impacts, although focused on intra -city rather than on inter -city connectivity Some... analysis and meet policy objective Progress has been made in estimating impacts, although focused on intra -city rather than on inter -city connectivity Some rules might be needed about control totals – where do the ‘new’ jobs come from ?– and about methods ... Sheffield’ have to demonstrate a good BCR? Strategic fit – the challenges Role of the Strategic Case in the TBC – overarching summary or new information? Double counting – additional benefits in the. .. watering down of evidence based analysis Strategic fit – the challenges Estimating the local, regional or national GVA effect – is there a cookbook? • DfT’s Transport Investment and Economic Performance... transport between them • How robust are the models – where they fit in DfT’s assurance framework? Is narrative enough? Strategic fit – the challenges Whose policy objectives should the scheme fit?