A bad appraisal

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Forget environmental considerations, money’s in the driving seat when it comes to approving transport schemes. It’s time to reappraise the appraisers, says Rebekah Phillips

The Department for Transport (DfT) has announced plans to let motorists drive on the motorway hard shoulder, a scheme that should keep traffic moving and reduce pollution. And yet ambitious new Government plans to use motorway hard shoulders to ease congestion and reduce emissions would never have been passed if the DfT had applied its own cost-benefit appraisal criteria for new schemes. How can that be?

Such a bright idea must have passed the department’s mandatory transport appraisal scheme (NATA) with flying colours. Well, probably not actually. Rumour has it that the scheme was not formally appraised, and had it been, a proposal such as this, promoting efficient driving, would not have got the thumbs up. For a politically important decision such as this, NATA was ditched.

On the face of it, a transport appraisal scheme might seem rather dull and unimportant to focus on. NATA is powerful, however: it gave the go-ahead for the widening of the M1 and M25, and is the reason why we don’t have more improved bus and rail services or better facilities for walkers and cyclists.

First introduced in 1998, NATA centres on cost-benefit analysis. Costs (such as how much a new road will cost to build) and benefits (such as the time it will save drivers) are weighed up. If the overall impact of a transport scheme is assessed as financially positive, it gets the go-ahead.

The broad principle behind NATA is that ‘winners’ from a transport scheme indirectly pay ‘losers’ for their discomfort or loss. A good example is the London congestion charge, which prices some motorists out of their cars and on to public transport, walking or cycling. Remaining motorists pay to move around the city faster, and that income is used to support alternatives that indirectly benefit the ex-motorists now using them.

NATA was intended to align with Government objectives to improve safety, support economic activity, protect the built and natural environment, and improve access to everyday facilities for those without cars. It sounds good in theory, but hasn’t quite worked out that way. In fact, the schemes that do best are those that keep people driving around in their cars, emitting greenhouse gases.

Absurd as it may seem, at a time when we need to reduce our emissions, an increase in fuel use is regarded as a positive in NATA’s analysis. This is because more fuel tax will be paid to the Treasury. Transport schemes that get people out of their cars or make driving more efficient (‘greenwave’ schemes, for example, which synchronise traffic lights) fare less well, and schemes that increase traffic, air pollution and carbon dioxide emissions (CO2) get a big thumbs up.

The value NATA puts on carbon emissions is 5-6p per litre (whereas Government income from fuel duty and VAT on fuel is around 55-60p per litre), so pollution impacts end up being relatively insignificant in the calculation. Increasing the use of public transport means less VAT income, as bus tickets are VAT-exempt, so this is viewed negatively.

Cyclists might be surprised to hear they are not as valuable to society as car drivers. A cyclist’s time is worth 28p a minute compared to 44p a minute for a car driver. This gives the Government little incentive to spend money on cycle schemes.

Small time-savings per motorist can multiply up to a significant and easily quantifiable benefit in the NATA analysis. This one factor can swing the decision to pass a scheme, regardless of its other impacts. Not everything can have a price-tag or should be traded against in a cost-benefit analysis, however. Can you put a value on a human life, a rare habitat or even a good night’s sleep?

Green Alliance’s recent research shows that some fundamental changes are needed to ensure the DfT promotes schemes that really benefit society.

First, when deciding transport schemes for the future, some things should not be traded off against each other through cost-benefit analysis – potentially dangerous climate change being one of these. Small time-savings for motorists will mean nothing if the road they travel on ends up under water. Rather than relying on a number in a balance sheet, all schemes should be robustly assessed against a number of standards with simple pass or fail criteria. Schemes that lock-in CO2 emissions, go over a given noise level, encroach on endangered habitats or increase local pollution above a set amount should fail.

Second, NATA should move away from the obsession with putting a monetary value on everything, thus obscuring the real impact of a scheme. A benefit-to-cost ratio figure of two may be a neat assessment, but it does not reveal that a new bypass will mean people living nearby can no longer easily hold a conversation in their back garden, or that the habitat of a rare orchid will be destroyed. It also doesn’t show that the only winners will be 400 car drivers with reduced journey times of just one minute. It will hide the fact that a simple bus scheme could have reduced congestion in the town centre just as well.

The Government is currently reviewing how NATA works, but it seems to be heading in the wrong direction. Rather than create standards against which transport schemes are assessed, and making the impacts more explicit, DfT hopes to incorporate monetary values for even more aspects. It intends to put values on landscape, health, biodiversity and ecosystems, and even on the ‘ambience’ of a journey. Without giving NATA the thorough overhaul it needs, financial evaluation of more factors would be disastrous. It would enable the DfT to say it was considering all these elements in its decision-making while continuing to build yet more new roads.

Green Alliance is pushing to make sure climate change and the Government’s environmental objectives are top priority in the NATA consultation, and that we don’t end up trading ourselves out of the right solutions. On 19 February 2008, we launched a new report with the Campaign for Better Transport called ‘Decision-making for sustainable transport’, which identified several problems with the DfT’s transport-assessment scheme.

We need a scheme that gives the right results every time, and backs up our decision-makers when they bring in sustainable transport solutions. In the meantime, until it is suitably repaired, let’s consign NATA to the hard shoulder.

Rebekah Phillips is a policy officer at Green Alliance, rphillips@green-alliance.org.uk.

This article first appeared in the Ecologist June 2008