Transport Investment Decisions: How are priorities determined?

The EU-funded EVIDENCE project recently held a roundtable discussion on Transport Appraisal. Granted the audience of transport professionals is an eclectic bunch, but should you wish to you can re-live the discussion here.

It was interesting that the consensus seemed to be that, however flawed, using appraisal systems remain the most appropriate way of identifying expenditure priorities. The experts emphasised a preference for evolution not revolution.

My most important ‘take-away’ - was that that the discussion brought into focus a poorly understood aspect of the transport industry, to do with the way in which investment decisions are taken. In theory Government spending reviews are informed by advice from the Department for Transport on economic value.

We 'trust' the politicians to make the right decisions for the good of the nation. BUT the actual process appears to be completely closed to scrutiny and entirely political. It is notable that none of the senior politicians or civil servants I’ve spoken to can adequately explain the process to which the pots of funding for different transport measures /activities are subject to.

This creates the perverse situation that, despite appraisal which might demonstrate significantly higher BCA from an integrated (and more sustainable) scheme, a highway based initiative can instead be adopted because of the way in which the cash has been ring fenced for ‘strategic highway investment’. Given this - should we accept that the right decisions about priorities are being taken?

Investing considerable effort into changing appraisal will have very little impact. Since, in reality, appraisal tends only to be used to prioritise schemes within a tightly controlled funding pot or within a specific programme.

It struck me that unless we can find a way to understand and influence the decision making process through which transport cash is allocated to specific transport funding pots, then the production of best practice guidance on economic benefits will continue only have a very limited impact.

So, the question is – have any of your projects /papers /colleagues attempted to understand this process and start to provide some sense of the black box? For example once a decision has been taken to spend X amount on a new train line, and Y amount on new cycle infrastructure – it is very difficult (if not impossible) to justify increasing Y at the expense of X, even if the appraisal suggests the economic return on investment would be considerably greater.

It seems to be possible to characterise the current process as follows:

• Government takes great pride in emphasising to the nation the benefits of transport investment to support and stimulate economic growth.
• The Government requires appraisal to be undertaken to demonstrate economic value of transport schemes /measures, and demonstration projects.
• Government says that this data is used to inform the spending review – so in theory the projects that offer best return are prioritised for funding.
• A politically-led process then determines how the transport spending is allocated to different funding pots. We have little understanding of the basis on which priorities are determined, or how much weight the data on economic benefit is given.
• Despite increasing evidence of the potential to generate better economic returns from less-conventional transport investment, we can observe that generally the prevailing norms for transport investment continue.

 It strikes me that we actually know very little about how decisions are made.

It is therefore very difficult to understand how to influence decisions to increase the proportion of transport money spent on sustainable transport measures when we don’t know how they are made.

So, the question is should we expect greater transparency in transport investment prioritisation?

Dr Colin Black is Managing Director of Contemporary Transport and is leading the EVIDENCE project.