TAG takes a back seat as DfT joins wider Government investment framework

A WIND OF CHANGE appears to be shaking the tree under which the Department for Transport has long organised its approach to transport decision-making and resource deployment. Over the past year, the new Labour government has been strongly asserting its new missions and values in relation to economic growth and a rebuilding the nation’s infrastructure and social systems to reflect its values, and it means change across all the public bodies at the delivery end of policy.

Whilst the broad sweep has been becoming clear, the more detailed implications have taken longer to emerge, not least within the Department for Transport. But they now are increasingly evident, and mean that the modus operandi with which the DfT and its national agencies for road and rail, and the local transport authorities, have become familiar, will need to be reshaped to reflect a new political agenda.

Some of the key implications have already emerged from the Spending Review priorities and the related revisions to the Treasury’s Green Book on appraisal, as considered in the last issue of this publication. In addition, the new Government 10 Year Investment Strategy re-emphasises how the new priorities for key sectors like transport will be implemented, and the relationship they have with other objectives, as we explore in this issue. Spatial development strategies, the issue of connectivity, and the drive for more housing and the creation of new towns are examples of that.

Two significant factors in the deployment of resources are the concepts of place-based strategy and transformational change. Transport has a clear role to play in both of these, though not alone, but either as a trigger to more fundamental change, or in support of other objectives.

The DfT’s existing Transport Analysis Guidance toolkit for appraisal and decision-making is simply inadequate for this kind of high-level contribution to the rollout of an overarching mission for economic and social change and a revision to the nation’s priorities. So it is not surprising to see necessary new frameworks and processes start to emerge alongside and beyond it - but mainly as the fruits of thinking from outside the Department itself. They reflect the perspectives of the Treasury and the powerful new National Infrastructure and Service Transformation Authority, and are being implemented in DfT under the guidance of its new Chief Analyst Ian Mulheirn, brought in last autumn as a new broom for the new Government in the Department.

As we report in this issue, the new Benefits Management and Evaluation Framework he has just issued, joins other moves to reshape the DfT’s appraisal and decision making principles to embrace policy issues beyond the established TAG process. These include a new approach to applying a Value for Money Framework, including a number of significant changes - amongst them a new ‘Indicative BCR’ benefit cost ratio metric, as a means of improving the visibility and transparency of wider economic impacts in the VFM assessment. It also involves updates on uncertainty, spending objective analysis and monetising the impact infrastructure schemes have on landscape.

For some reason marked as ‘OFFICIAL SENSITIVE’, (a strange label to be now appearing on previously widely circulated government documents of real public interest) the revised VFM framework released last month sets out how DfT wants value-for-money to be assessed and reported to decision-makers. It makes clear this is not just about the benefit-cost ratio (BCR), but the full range of transport interventions and their impacts, and how robust the analysis actually is. This is an issue increasingly occupying the Treasury and the message it seeks to convey in the Green Book, particularly with the objective of making it easier to approve new transport schemes in the North and the Midlands as part of a wider economic and social objectives.

There is a degree of crossover in the new DfT guidance documents with the established detailed TAG processes, but the separation of them is now being clearly stressed. The distinction is emphasised that TAG specifies how an “appraisal practitioner” should crunch the numbers, how to monetise impacts, and how to present things which don’t have numbers (‘non-monetised impacts’), whereas the VfM and benefit management frameworks tell policy officials and decision-makers how to turn TAG appraisal outputs into practical assessment of the overall business case for major investments, and provide a synoptic view of whether a proposed policy or scheme is actually good or poor value for the public resource required, and how it fits into broader political objectives.

This will hopefully end the era when the complex and impenetrable TAG processes seemed to be in the hands of a limited number specialists able to create and manipulate the output of the ‘magic numbers’ to get schemes signed off.

DfT Chief Analyst Mulheirn clearly reflects the Labour government’s mission priorities when he writes that “effective investment in local transport is vital to growing our economy, improving communities, and delivering better services for people across the country. This Benefits Management and Evaluation Framework is a key tool to help us understand how well public money is being spent and ensure that every pound delivers real value.”

In the first instance, these new frameworks are, in theory, mainly intended for DfT’s internal officials and decision-makers, and those concerned with deployment of its available investment. In practice they are also of considerable significance to local authorities and other stakeholders who have to read the DfT’s mind about the ‘Managing public money’ guidance it must follow on how to consider value for money before committing funds.

The new benefits and evaluation guidance and VFM document provide high-level guidance on the Department’s new approaches to considering value for money and decision-making about new proposals. And also the increased emphasis on examining closely what has happened after an intervention has been delivered, by using benefits management and evaluation best practices to identify actual impacts to inform the evidence for assessments of new interventions — something on which the Department and its agencies have had a very poor record in monitoring.

In his Foreword to the local authority major schemes benefits management and evaluation framework guidance (this one strangely labelled on the cover and every page ‘OFFICIAL-FOR PUBLIC RELEASE’), DfT Chief Analyst Mulheirn, clearly reflects the Labour government’s mission priorities when he writes that “effective investment in local transport is vital to growing our economy, improving communities, and delivering better services for people across the country. This Benefits Management and Evaluation Framework is a key tool to help us understand how well public money is being spent and ensure that every pound delivers real value.”

For local authorities delivering transport schemes the framework provides practical steps to track progress, strengthen the evidence base, and make the case for future investment, the Chief Analyst says. Reflecting Mulheirn’s status and connections across Government, the guidance draws on the Green Book, Magenta Book and Teal Book and other general best public policy practice material coming from the Treasury and NISTA, including the guidance on Managing Public Money before committing funds to a policy, programme or project, and on project delivery itself.

Interesting in this regard is the mission of the Government Project Delivery unit, now being run as a distinct entity tasked with being the centre of expertise for project delivery in government. The approach is reflected in both the Government’s Project Delivery ‘Teal Book’, which provides guidance that enables practitioners and teams to direct and manage portfolios, programmes and projects across government and the Treasury’s ‘Magenta book’ on evaluation, now under revision. The emphasis in both is on ensuring the successful and timely delivery of government policy and business objectives. The harrowing experience of HS2 seems in particular to be haunting the government, and driving the will to do things differently.

Both the Treasury, the Cabinet Office and the National Infrastructure and Service Transformation Authority are involved in these moves, and individual Departmental leads on analysis and evaluation, like DfT’s Ian Mulheirn, are at the front of cross-government change initiatives in this

“By learning what works and sharing that knowledge, we can support better decision-making, improve outcomes, and deliver the transport infrastructure that communities need,” Mulheirn says in his foreword to the local major projects framework.

“This framework makes it easier to gather high-quality evidence without placing unnecessary burdens on local authorities, enabling robust evaluation at both the project and programme level. We are committed to ensuring that public investment drives meaningful change. With this framework, we are setting out clear, practical principles to guide future decisions and deliver lasting benefits for people across the country,” concludes the Chief Analyst.

The bottom line to these important changes is that transport has now been firmly brought into Cross-government push to strengthen rules on project appraisal, delivery and evaluation, and support the drive that the Prime Minister and Chancellor have been leading for the new Labour Government to sharpen up on how public projects are specified, managed and evaluated across the public sector to avoid the kinds of delivery embarrassments and financial problems seen with the likes of HS2.

It is perhaps a shame that the much needed shake-up to the creaking and groaning TAG legacy,has had to come from outside the transport professional establishment, who must now adjust to a new reality.

In a previous generation, it might have been the critical voices and radical thinkers within the transport sector who were making the case for change, and arguing cogently for new ways of addressing issues, and thinking about the underpinning nature of judgements and decisions reflecting transport’s wider role. As it is now, those in other parts of Government — like the Treasury and NISTA — will be determining the way things go forward, but not necessarily having got everything fully shaped up, as very important decisions are taken regarding the future of transport and its relationship with other parts of the economy and social and environmental landscape. The transport profession needs to very quickly come out of its silo and join that debate.

Peter Stonham is the Editorial Director of TAPAS Network

This article was first published in LTT magazine, LTT918, 25 June 2025.