Do we Keep Right On to The End of The Road... even if it isn’t making sense any more?

TWO HIGHLY EXPENSIVE National Highways road schemes have come to the forefront of professional discussion this week, with serious questions to be asked about their value for money, and justification in either economic or environmental terms against the background of a likely requirement for significant public spending cuts as the new Rishi Sunak-led Government seeks to get to grips with the national finances. 

This issue of LTT reports on both the Department for Transport’s own accounting officer’s judgement on the A66 Northern Trans-Pennine upgrade, now officially representing poor value for money, and the forthcoming examination of the revised NH proposals for a new downstream Lower Thames Crossing between Essex and Kent, which our regular contributor, Professor Phil Goodwin, notes is likely to hear some very significant arguments about both the need for the major investment project, and the rationale behind its justification.

In both the A66 and LTC schemes the economic justification is far from clear, even using the Treasury’s and the Department for Transport’s own formulae in terms of Benefit Cost Ratio and Business Case assessments.

In this regard it is a matter of concern that National Highways has had to be required to release its business case for the controversial Lower Thames Crossing following an application to the Information Commissioner by Thurrock Council which is opposing the scheme. NH has so far resisted making the outline business case available, and also been highly restrictive about other information about its projections and modelling for the LTC ahead of its examination within the planning process for Nationally Significant Infrastructure Projects. This can only heighten concern that the figures simply don’t add up.

There is perhaps an unwelcome equivalence here, to former chancellor Kwasi Kwarteng’s approach of forging ahead with his now-notorious tax-cutting Mini Budget without wanting to get the expected accompanying overall financial analysis from the Office for Budget Responsibility. It is surely a matter of good principle that the spending of public money should be subject to open and well informed public discussion.

At a political level, the arguments over these two schemes (and potentially others) seem likely to echo the discussions of policy on economic growth and financial prudency that have recently convulsed the Conservative Party leadership elections, and at a professional level to reflect the wider issues already under discussion in the world of transport planning about scheme presentation, appraisal and acceptability against the new priorities of addressing climate change and changing paradigms of accessibility and mobility.

Perhaps significantly LTC was not included in the short-lived Truss Government’s recent list of more than 100 road schemes to be accelerated as part of the drive for economic growth, though it had been canvassed as important in this respect as long as any of them. One suggestion is that the LTC’s unpublished underlying economic rationale is so weak, and its cost so high, that it might have actually been an eminent candidate for a cut or delay due to the financial stringency that seemed to be coming, under even the free-spending Truss administration – let alone the new Sunak-led one now in place. The cost must surely look suitably eye-watering to chancellor Jeremy Hunt when he seeks to balance his budget. 

Interestingly, it is again a Conservative council in the South East, Thurrock, which is challenging the thinking of its Party at national level – something that may well be echoed in other spheres of planning and transport

The cost for the LTC was estimated at £8.2 billion back in March 2020, which had increased by around 20% from 2018. The word is that it now needs Treasury to again increase the budget, nearer to £10 billion. The A66 upgrade, meanwhile, is expected to cost around £1.5bn.

To put this substantial spending into perspective, Professor Goodwin points out that LTC alone would account for over a third of the total DfT Road Investment Strategy 2: 2020–2025 (RIS2) spending pot of £27.4 billion.

An obvious precedent for a review of this expenditure would be the events nearly 30 years ago when the Thatcher Government’s 1989 ‘Road to Prosperity’ roads programme was seriously cut back in 1994. This was also partly for reasons of financial pressure, but as Goodwin points out, was mainly due to a more fundamental change of transport planning perspective, initiated by public and professional opinion, and crystallised by a group of Conservative local authorities in the South-East of England. They demonstrated that the forecast traffic growth, assumed to underpin the motorway expansion, would then not actually fit into the congested local road space. The logic of confronting this contradiction was later extended in John Prescott’s Transport White Paper under the subsequent Labour government, but it’s now often forgotten that the governmental change had been led by a new realism in Conservative local councils, taken up by a Conservative government.

Interestingly, it is again a Conservative council in the South East, Thurrock, which is challenging the thinking of its Party at national level – something that may well be echoed in other spheres of planning and transport as Prime Minister Sunak seeks to rebuild political support ahead of a General Election within the next two years.

Such local concerns are part of a much bigger set of unresolved conflicts which lie at the heart of the road and environmental strategies for England as a whole. They include the treatment of alternatives, traffic forecasts, and key environmental impacts. Not to mention the role and approach of NH itself.

National Highways does seem to operate as if it has a mission to protect and deliver projects that have been included in its programmes without a willingness to acknowledge that both circumstances and priorities can change. In the LTC case, Goodwin contends that there has been no more than cursory consideration of modal and other alternatives, and key inputs were determined long before the radical changes brought about by Covid, Brexit, The War in Ukraine and related Energy crisis, and the current economic situation. Let alone Climate stabilisation and Net Zero targets, or other environmental implications such as an increased risk of flooding. Therefore, argues Goodwin, all alternatives and new approaches should now become relevant, even if they had previously not been.

Just because a scheme is in the current Road Investment Strategy (RIS), it cannot be in the public interest to proceed with it as if the original circumstances still apply without reassessing the case for alternatives.

Simply in terms of the forecast level of usage being planned for, Goodwin points out that every ‘central’ long term National Road Traffic Forecast since 1989 has overestimated growth, and has had to be revised downwards in DfT’s subsequent periodic NRTF reviews. Interestingly the latest one, promised for this year, is still awaited.

Goodwin adds that these regular downward revisions mean that there must have been significant overestimation of the value for money on which the business cases were built for many schemes, and questions how much the business case for the LTC depends on unrealistically high general traffic growth.

In securing the release of the relevant material relating to the LTC through application to the Information Commissioner, it seems that such calculations may well form a crucial factor in the forthcoming Development Consent Order examination, if the new LTC application is accepted by the Planning Inspectorate.

Goodwin believes there should be exceptionally close scrutiny of three critical quantities: 

• the assumed ‘base’ or ‘do-nothing’ trend of traffic without the tunnel;

• the forecast traffic trends ‘with’ the tunnel; and

• the range of realistic contingencies or scenarios for testing risk factors.

There is a very strong case for greater detailed research and post-opening scheme monitoring to examine the real links between transport and economic growth, going beyond a simple enthusiasm for ‘investment in infrastructure’.

Indeed, NH should surely be informing the overall direction of its and the Department of Transport’s national roads policy by careful reflection on these issues, as well as appropriate decision-making about what is the most costly road project in the country. Since 2015 the DfT has accepted a wider range of possible realistic scenarios than has ever been included in NH projections, says Goodwin.

The DfT itself already implicitly acknowledges that the current transport trajectory is not compliant with net zero targets. Close reading of the DfT’s own decarbonisation strategy strongly implies that they are (very sensibly) calculating a significant traffic reduction to close the gap, Goodwin adds. They are not yet releasing the detailed figures on how much, and another Freedom of Information case is being pursued by Professor Greg Marsden of Leeds University for the DfT to release the national traffic forecasts which underpin the Decarbonisation Strategy.

It seems certain that the traffic projections required for net zero will not show the scale of traffic growth which is critical in National Highways’ case for LTC.

A core point to take away from this important and crucial discussion is that the roles of both the Department for Transport and National Highways are surely not just to ‘get things built’, but to continually assess if they are really justified and fit suitably into the overall transport equation. And if not, to accept and adjust to the implications. If the two bodies are either not capable or willing to embrace this responsibility, someone else representing the public interest surely should call them out.

Or perhaps, given the current exceptional economic circumstances, it will ultimately fall to the Treasury to do so. 

Read Professor Phil Goodwin’s Commentary: Lower Thames Crossing – Is this Tunnel a Bridge too Far?

Peter Stonham is the Editorial Director of TAPAS Network

This article was first published in LTT magazine, LTT856, 31 October 2022.