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Introduction
7.1 The previous chapters have aimed to emphasise that the 5 themes underpinning the Scottish Executive's integrated transport strategy - economy, safety, environmental impact, accessibility and integration - are relevant to all aspects of trunk road management, repair, maintenance and improvement. However, they are particularly critical in relation to the last of these - improvement. A key objective of the Strategic Roads Review was to examine the rationale behind new roads construction, taking the 5 criteria into account. This has involved the development of a new appraisal framework for use in taking decisions on investment priorities.
7.2 Scottish Office Ministers considered that it was important that this framework should be put together, in an open way, on the basis of consultation. A consultation paper setting out initial proposals on how the 5 criteria should be interpreted in prioritising road schemes was therefore issued in August 1998 under the title The Appraisal of Trunk Road Investment.12
Investment appraisal
7.3 Economic or investment appraisal provides a framework for rational decisions on the use of limited resources. Good appraisal entails being clear about objectives, thinking about alternative ways of meeting them, estimating and presenting the costs and benefits of each potentially worthwhile option, and taking full account of associated risks and uncertainties. Used properly, it should lead to better decisions by policy makers and managers and, over time, better overall economic performance as resources are used to better effect.
7.4 The framework set out in the consultation paper incorporated elements from 2 broad approaches to appraisal namely cost benefit (or Social Welfare) analysis and the impact statement (or matrix) approach. The former aims, as far as possible, to take account of all the main costs and benefits of a road scheme and places monetary values on them. As costs and benefits generally arise at different points over the lifetime of a road, a discounting approach is used to arrive at a single net present value (NPV) for each option, representing the difference between the discounted value of benefits and the discounted value of costs. In practice, it is not possible, at least on the basis of current methodology, to assign monetary values to all of the potential impacts of schemes which are relevant to the 5 criteria.
7.5 The impact statement approach recognises this and aims to set out, in a consistent manner, all scheme impacts so that the decision maker can look across all of the schemes or options under review and see their relative strengths and weaknesses. For some impacts, monetary valuation will be possible. In others, some other form of quantification (eg tonnes of CO2 emissions) may be available. But there are some impacts where quantification is not possible and a qualitative assessment is required.
The initial approach
7.6 The approach set out in The Appraisal of Trunk Road Investment is summarised in Table 7.1.
7.7 The approach involved a series of sub-criteria for each of the 5 main criteria. For each sub-criterion, an indicator was devised, reflecting the expected impact or effect of the scheme or option under consideration, as shown in the table. Some of these indicators can be expressed in monetary terms (shown in the third column of the table as Quantitative (£)). Others can be quantified but not in monetary terms (shown as Quantitative). For some indicators a qualitative assessment is appropriate while, in other cases, the suggested approach involves a mixture of quantitative and qualitative appraisal.
7.8 The consultation paper noted that the approach had been designed primarily for the purpose of appraising trunk road investment. It noted that the longer-term objective was to develop an appraisal approach which could be applied across different transport modes, in a way consistent with an integrated transport strategy. In this way, potential trunk road schemes could be compared, in terms of their costs and benefits, with other transport improvements (eg public transport) addressing the same transport problems. However, the paper noted that substantial development work was required before this stage was reached.
The respondents
7.9 Copies of the consultation paper were issued to approximately 550 organisations or individuals and 73 responses were received. The responses are available for inspection at the Scottish Executive library. Roughly a third of the responses were from local authorities or related bodies (including police forces, regional transport partnerships and joint structure planning committees). About a sixth each came from trade or professional bodies with an interest in transport and from interest groups (including some with a strong public transport or environmental focus). The remaining responses came mainly from bodies concerned with economic development, consultants and individuals.
The comments offered and the Scottish Executive's response
7.10 All the responses have been considered very carefully and a report on them is provided in Annex 1. There was a broad welcome for the consultation exercise itself and considerable support for many of the proposals put forward. There were also some criticisms and a number of suggestions on how the appraisal framework might be modified. In some cases, these related to details which were not explained in the consultation paper but were already incorporated in the method. In others, relatively minor changes were suggested and, where possible, these have been accommodated. But in other cases more significant changes were proposed, and a number of these too have been implemented. This chapter focuses on 3 particularly significant changes, on which fuller details are also provided in Annex 1.
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Table 7.1: Summary of consultation paper appraisal framework |
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7.11 The proposed method was criticised on the grounds that it was not multi modal in nature and so did not allow trunk road schemes to be considered alongside other transport solutions. The Scottish Executive agrees that multi modal appraisal does have an important role to play in some circumstances and work on the development of appropriate techniques has continued since the publication of the consultation paper. The emerging methodology will now be applied in corridor studies, details of which will be announced by the Minister.
7.12 A number of respondents expressed concern that the method perpetuated the 'predict and provide' approach by estimating benefits (especially time savings benefits) on the basis of traffic forecasts which took no account of the Executive's aim of restraining traffic growth. Again, this is a legitimate point and has been recognised in the framework by calculating such benefits both on the basis of forecast traffic growth and on the basis of zero traffic growth. This means that the extent to which some key scheme benefits are dependent on continued traffic growth is clearly set out for the decision maker.
7.13 The third significant criticism was that the assessed benefits of some road schemes might be heavily dependent on time savings generated for road users commuting by car. It was argued that there could be alternatives (eg improved public transport) to providing additional road capacity in such situations. While some respondents suggested that the appraisal method should attach no value to savings in car commuters' time, a different approach has been adopted. This has involved the calculation of a new indicator measuring the ratio of peak hour to off-peak hour traffic flows. A relatively high score on this new measure would indicate to the decision maker that the road would be used by significant numbers of commuters and that their journey time savings would have considerable weight in the calculations of benefits.
The revised appraisal framework
7.14 The original appraisal framework has now been revised in the light of the comments received during the consultation and further refined as a result of comments offered from within the Scottish Executive and by the Executive's agencies and statutory advisers. The revised approach is set out in full in Annex 2 of this report alongside guidance on how it has been applied.
The schemes under review
7.15 In addition to developing the appraisal framework, the Strategic Roads Review has applied the new method to 17 major road improvement schemes in order to inform Ministers' decisions on investment priorities. The great majority of these schemes (15) made up the major scheme preparation pool which the present UK Government inherited from its predecessor. However, Scottish Office Ministers agreed that 2 non-trunk road schemes should be included in the review because of their potential strategic significance. These are the M74 Northern Extension (which would extend the M74 from its current terminus near Glasgow's south eastern boundary to the M8 south of the Kingston Bridge). The second is the A8000 (which links the southern end of the Forth Road Bridge with the M9 and thereby the rest of the central Scotland motorway network). The full list of schemes considered in the review is shown on the map in Annex 3 which also provides descriptions of the schemes. For 3 of the schemes, 2 separate options have been developed and this produces a total of 20 options which were put through the appraisal process.
7.16 The key to the appraisal method is the Appraisal Summary Table (AST). This 2 page table aims to capture all of the key information on a specific scheme which is relevant to prioritisation and to present it in a consistent way. A blank AST, which explains in summary form how the assessment is put together, is included as Appendix B of Annex 2. The summary tables were put together in a 2 stage process which aimed to compress the extensive range of information available on each scheme or option. The first stage was undertaken by the consultants who had designed each scheme. The second, involving further compression, was undertaken by the project managers within the Scottish Executive Development Department. Their work was reviewed by other specialist staff within the Department's Trunk Road Divisions, by their colleagues in the Department's Planning Services Division and by staff of Historic Scotland.
7.17 In addition to this form of internal quality control, the draft Appraisal Summary Tables were then subject to an in-depth review by a 'Felt Fair Panel' made up of representatives of the Department's Transport Policy Divisions, Planning Services Division, Economic Advice and Statistics Division and Trunk Roads Division dealing with environmental advice, joined by external members from the Enterprise and Lifelong Learning Department, the Scottish Environment Protection Agency, Historic Scotland and Scottish Natural Heritage. The role of the Felt Fair Panel was to scrutinise all aspects of the appraisal summary tables to ensure that the method had been applied consistently and fairly across schemes and options.
7.18 The finalised Appraisal Summary Tables for each of the 20 options considered in the review are attached as Annex 4.
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