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Making the case for broad-minded policy making within transport planning

02 August 2013

by David Pendlebury

 

HS2

As the UK debates the most appropriate way to invest in crucial transport infrastructure, it is vitally important that policymakers take a broader perspective when evaluating investment decisions.

The challenges of demographic change for UK infrastructure are established and well understood: the duel effect of population growth and longer life expectancy, hopefully combined with a return to growth, will continue to fuel increases in demand for housing, transport and energy requirements - and we will need to think of ever more innovative ways to continue to provide for this demand in a sustainable and acceptable model.

Of course, such demands develop without regard to manmade sectoral definitions or boundaries, for example growth in demand for housing necessarily leads to growth in demand for transport and energy. And yet many investment decisions are still taken – and publicly debated – on a sector by sector basis.

On the surface, it is understandable that the debate around the housing crisis is initially understood in statistics relative to the ‘number of houses required’, or transport investment strategies are evaluated based on ‘number of minutes to be saved’ by improvements - as these are certainly important points to understand and assess. Indeed, the siloed approach to government operations allows valuable expertise, knowledge and specialisms to be accrued in specific areas. However, difficulty occurs when the viability of investment decisions are assessed on a cost/benefit analysis of outcomes solely pertaining to an individual sector.

Currently, the two largest debates unravelling on the subject of UK transport infrastructure are the discussion of the viability and value of high-speed rail and the most effective and efficient format to provide for future growth in air traffic. A good challenge to throw down to policy makers in these areas would be to push them to incorporate wider benefits than just the immediate sector-related goals when analysing the suitability of investment projects.

The failure to think – and analyse – in this broader and longer-term way surely represents a much larger inefficiency and ultimately a greater cost to the public.

Furthermore, although it is in many ways a sensible trend for public bodies to control their finances as similarly as possible to private sector businesses - and has most probably led to increases in efficiency and reduction in cost to the taxpayer at an organisational level, it is equally as important to ensure that future investment decisions are not in any way curtailed or prevented because the very real benefits from a project may be accrued on an out-of-sector income statement. The failure to think – and analyse – in this broader and longer-term way surely represents a much larger inefficiency and ultimately a greater cost to the public.

In a modern developed economy such as the UK, any cost benefit analysis regarding, for example, a new railway project, will undoubtedly have very slim ratios in favour of development based upon the current models of value determination – that is, primarily operational revenue and monetised time savings versus operational and capital costs, and any requirement for CPOs, plus litigation and other contingencies. The potential wider economic benefits, such as the value of enabling the development of large-scale housing initiatives following the creation of new stations or lines, or widened feasible commuting zones, would not tend to be included in these traditional methods of value analysis.

Although such benefits following infrastructure investment may be able to be written into local plans post-development and be accrued back into the public purse at a later date, the major risk is that if the body carrying out development is distinct from the local authority benefiting from the housing development, the project may not commence in the first place and may be written off as unviable.

With these scenarios in mind, the RTPI has started work on a paper to examine how transport infrastructure investment could be better aligned with broader areas of spatial planning – for example, looking at the role that transport infrastructure can play in unlocking land for development (particularly housing), and if there are ways of inducing government and developers to incorporate this additional value when assessing the economic worth of proposed transport infrastructure projects.

If you think you could contribute your experience or insight to this project, we’d love to hear from you – please get in touch with david.pendlebury@rtpi.org.uk

About David Pendlebury

David Pendlebury is Policy and Networks Assistant at the RTPI and is the policy lead within the areas of major transport and infrastructure planning. His other interests include macroeconomics, international affairs, and public sector finance. Before joining the RTPI, David worked in public affairs in Brussels and also as an analyst within the management consulting industry.