What should be our priorities for appraisal reform, asks DfT

APPRAISAL

All-lane running on the M25: the DfT is reviewing the evidence on new road capacity and traffic levels

All-lane running on the M25: the DfT is reviewing the evidence on new road capacity and traffic levels

The DfT is consulting on priorities for the next round of reforms to its transport appraisal and modelling framework. 

The Department says the environment for appraisal has changed considerably in the last five years, citing:  the Government’s industrial strategy; new institutions such as sub-national transport authorities, combined authorities, and the National Infrastructure Commission; changes to travel behaviour that are not fully understood; and the development of new technologies.

A huge number of possible reforms are put forward and the Department says it will “need to carefully prioritise” the options. 

The consultation lists a series of projects already underway to improve practice. They include: 

• understanding the interactions between schemes in a programme to support appraisal of roads 

• understanding how congested values of time on roads could be included in modelling and appraisal 

•  incorporating valuations of transport-specific landscape impacts into appraisal

• a review of the evidence base on the degree to which increases in road capacity lead to additional traffic (induced demand) 

• updating the evidence and guidance around agglomeration impacts 

• undertaking a cross-Whitehall scoping study on the empirical evidence base for the value of a life year

The Department is also updating evidence on optimism bias, including reviewing the approach to reference class forecasting, to determine the best form of disaggregating optimism bias rates (e.g. by project characteristics, size, type, business case stage) and whether and how to apply optimism bias adjustments to other variables besides capital costs (such as schedule delay, operating costs and benefits). 

Possible new areas of work include:

• developing tools to capture and communicate uncertainty in forecasting to decision-makers

• understanding transport’s impact on housing growth along corridors and productivity benefits beyond those generated by agglomeration effects 

• capturing the value of urban realm improvements, which often go hand-in-hand with transport schemes 

• quantifying the value people place on a variety of aspects of ‘customer experience’

• understanding the impact of technology (for example autonomous vehicles) on values of time 

On travel behaviour, the Department identifies a need to better understand trends, including young people’s travel behaviour, the impact of an ageing population, flexible working, and online shopping.

On modelling, it cites a need “to investigate the use of ‘big data’ in transport models and get a better grasp of any inherent opportunities or shortcomings in its use”.

The DfT notes the growing use of supplementary economic modelling, such as additionality, land-use transport interaction and spatial general equilibrium models. “To date, the private sector has developed a range of [these] models. We think an important focus of our strategy should be to review the Department’s role in encouraging the development of these models to provide robust analysis on a comparable basis across DfT’s portfolio. This might include consideration of the development of models for the DfT.” 

A new National Transport Model is being developed and the Department says a “significant enhancement” will be the inclusion of a detailed national traffic assignment model. “This will include the entire strategic road network and a significant level of detail on the non-trunk network, including some representation in urban areas. 

“The highly segmented demand model will also be based on geographically detailed zoning. These features will allow a finer, geographically-specific analysis of the impact of investment, chiefly on the national road network.”

Making the WebTAG appraisal guidance more user-friendly is another work area. This could include: developing case studies showing how the guidance can be applied in different situations; workshops; better signposting of the guidance; and streamlining the guidance. 

The deadline for responses is 15 October.