Question to the Department for Transport:

To ask His Majesty's Government, further to the Written Answer by Lord Hendy of Richmond Hill on 16 October (HL10758), when assessing the benefits of new road schemes how long those benefits are expected to last, and how loss of benefits are accounted for if congestion reoccurs.

The approach recommended to assess benefits from road investment schemes is set out in DfT’s Transport Analysis Guidance (TAG), which is based on HMT’s Green Book Guidance. This sets out the best practice guidance on assessing and evaluating policies, programmes and projects. The guidance is regularly reviewed and updated to reflect new evidence.

How long benefits may last will be very much dependent on the nature of the scheme, the local area and the strategic objectives being sought. TAG recommends, therefore, that infrastructure schemes should do bespoke analysis using transport modelling. These models, such as the types described in TAG, allow benefits to be calculated based on various behavioural responses expected. For instance, where infrastructure improvements decrease the cost, time and inconvenience of using that infrastructure, transport users may decide to use that infrastructure, change their destinations or activities, or change their mode of travel.

TAG recommends an appraisal period that is linked to the life of the infrastructure asset. This allows accounting for the foreseeable costs and benefits over that time horizon, where they are expected to occur. The appraisal period is usually for 60 years after scheme opening, which is used reasonably consistently in the sector. Allowances may be made for infrastructure that is expected to have longer-lasting benefits and costs after 60 years. TAG recommends that, in such cases, the analysis may cover up to a 100-year appraisal period from scheme opening as a sensitivity test. This is the recommended treatment, since large uncertainty is a feature of the very-long-term, and costs and benefits are heavily discounted in this period.

The benefits of road travel, in particular transport user benefits, can indeed deteriorate for each road user as congestion reoccurs. TAG methods allow for this, utilising the modelling previously mentioned. The “counterfactual” position is important here. This is the state of transport conditions in the case where there is no investment. Benefits are counted across the entire transport network, including non-road travel. Even where the road in question may reach the levels of congestion seen today, benefits, albeit potentially weaker, are still expected to occur even over long-time horizons, when considering the operation of the whole network. For example, traffic may reroute from previous local bottlenecks, some decongestion on public transport services may occur, and so on. In the counterfactual, people would effectively see higher costs/time/inconvenience of reaching the destinations they desire, or indeed become ‘priced off’, the transport system providing them with lower access to opportunity. Again, local conditions are important in understanding the precise source of such benefits.