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Transport infrastructure is integral to national policies such as the Government’s Levelling-Up and decarbonisation agendas. The Centre for Cities, a think tank, note how good transport connections directly improve the overall economy as well as supporting people, businesses and the environment. Decisions on transport include those on:

  • major infrastructure projects/programmes, such as High Speed 2 or changes to the Strategic Road Network;
  • small infrastructure schemes, such as a new station or local road; and
  • individual instrumental policies, such as the setting the powers for implementing and operating a light rail scheme.

Investment in a particular scheme or project requires an understanding of the anticipated benefits it could bring as well as the expected costs and timescale of its implementation.

Transport appraisal guidance and processes

Overarching guidance on the appraisal of policies, programmes and projects is provided by the Government in The Green Book. This was revised in 2020 to place greater emphasis on wider strategic priorities, such as the levelling up and decarbonisation.

The Department for Transport (DfT) have used the principles of the Green Book to produce its Transport Analysis Guidance (TAG), which must be used for schemes requiring Government approval. It consists of three stages:

  • Stage 1: option development;
  • Stage 2: further appraisal; and
  • Stage 3: implementation, monitoring and evaluation.

A key part of the appraisal process is the development of a transport business case. Transport business cases follow a five-case model, which includes: a strategic case, an economic case, a financial case, a commercial case and a management case. Each of these cases becomes more complete as the business case develops. Development of the project business case typically consists of three stages: a Strategic Outline Business Case (SOC), an Outline Business Case (OBC) and a Full Business Case (FBC).

Benefits, limitations and prospects for reform

The Government’s methods for appraising transport projects have endured and are recognised internationally. The methods the DfT use to appraise transport today have a lot in common with those used in the 1960s. The Institute for Government (IfG) note how the DfT’s guidance has helped inform transport appraisal across OECD countries.

The main benefit of the Government’s transport appraisal process is its consistency. The process can be applied to projects of varying sizes across all modes of transport. According to the Institute for Transport Studies, these processes, however, have endured partly because, while the underlying principles have remained the same, the processes have been adapted to reflect changes in government policy.

The processes for appraising transport have several limitations. These range from technical issues on the one hand through to questions about the role these processes play in the decision-making process. On the technical side, the Transport Planning Society has argued that the forecasts and modelling used in transport appraisal favour certain criteria, such as travel time for car journeys, while undervaluing or missing others. This can mean that interventions which promote travel by more sustainable modes can score badly. In addition, because these models project past trends into the future, interventions which focus on changing behaviour can also score badly.

These appraisal methods, while useful, are also very complex and are often not well understood by decision makers in local and central government, according to the IfG. While transport appraisal entails balancing a series of economic, social and environmental benefits, the IfG has noted the economic case, especially the benefit-cost ratio, tends to dominate thinking on transport projects. Other commentators, such as the Transport Planning Society, agree.

Another challenge is how the transport appraisal system interacts with politics. The Institute for Transport Studies, for example, has noted that for some the appraisal process “encroaches too far on the discretion of democratically elected politicians to make choices on behalf of society.” As the current process is highly centralised, devolution of transport powers to local and regional government also poses critical questions for the future of transport appraisal.

As a result of these limitations, there are calls, such as from the Transport Planning Society, for a fundamental reform of the transport appraisal process to reflect the current demands on the transport system, most notably from climate change.

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