Act TravelWise Autumn Conference 2014 - The Economics of Sustainable Travel "Applying for DfT and LEP Funding: How to Make the Economic Case for Action More Effectively"

1. Making the Economic case for
Investment
Philipp Thiessen, Head of Appraisal scrutiny

2. Overview
• Background
• Existing Evidence base
• What does all that have to do with
Growth?
• Practical demonstration
• Discussion

3. Background
• Cycling Delivery Plan published in October for
consultation
• Ambition for cycling and walking to be delivered
through cooperation of local and central activity
and funding.
• Under LGF major source of funding now under
local control
• Want to ensure capability for making the case is
maximised.

4. Background: Five Case Business Case
The Green Book recommends that business cases are structured
according to its best-practice Five Case Model:
Management
Strategic
Economic
Financial Commercial
Applicable – a
strategic fit
Appropriate –
optimum
Public Value
Attractive – to
supply side and
feasible
Achievable –
can be
successfully
delivered
Affordable – within
the budget

5. The Existing Evidence base
• In support of the plan, the department recently
published three reports on benefits of sustainable
and active travel:
– Value for Money assessment of the large LSTF
schemes
– Value for Money assessment for Cycling
Grants
– Claiming the Health dividend

6. The Existing Evidence base
Other relevant studies include
– Cycling Demonstration Towns
– Sustainable Travel Demonstration Towns
– Sustrans Linking Communities Fund
– TfL’s Cycling Vision

7. The Existing Evidence base
Typical BCR’s from these studies
Sustainable Travel Towns 4.5:1 Decongestion benefits only
Cycling Demonstration Towns 2.59:1 Health benefits only
Local Sustainable Transport Fund 5.1:1 Based on 12 large schemes business
cases
Cycling Ambition Grants 5.5:1 Based on business cases for 12 funded
schemes
Linking Communities Fund 10:1 Based on eight representative schemes
Literature Review 5.6:1 Average BCR for UK case studies,
overall average 6.3:1
Transport for London Cycling Vision 2.9:1 Very large programme - conservative
BCR

8. What do those BCRs do for Growth?
Benefit Cost ratios represent the quantifiable transport benefits
per pound invested
Time Savings
Health
Journey Quality
Air Pollution
Reliability

9. What do those BCRs do for Growth?
E.g. LSTF – over 80% are time and
operating costs for road users – from
mode shift and decongestion –
At least half of those are time savings
to business – staff and goods spend
less time stuck in traffic.
Road safety – less time loss from
absenteeism, less disruption from
clear up…

10. What do those BCRs do for Growth?
E.g. Cycling ambition grants – around
60% are physical fitness benefits.
These are the benefits of reduced
premature mortality.
At least 30% of the value is from
avoiding the loss of productive output
that occurs when employees die
prematurely.
Further benefits to business are
reduced absenteeism, higher staff
productivity, motivation and retention.

11. What do those BCRs do for Growth?
Other growth impacts:
Air quality – in areas of exceedances
Journey Quality – more satisfied workforce – esp
highly skilled often demand good travel facilities
General well-being: growth is ultimately a means to the end
of well-being – so why discount this?
In summary: the traditional transport appraisal accounts for
the majority of economic impacts – even if it does not
present jobs and GVA…

12. Working through an example
Based on the worked example in WebTAG A5.1 Active
Mode Appraisal…

13. Conclusion
These three papers reinforce the existing evidence that sustainable and
active transport investment can have very high value for money.
Local Authorities should refer to this when making their case for
investment to local decision makers.
• https://www.gov.uk/government/uploads/system/uploads/attachment_data/file
/347894/vfm-assessment-of-lstf.pdf
• https://www.gov.uk/government/uploads/system/uploads/attachment_data/file
/348943/vfm-assessment-of-cycling-grants.pdf
• https://www.gov.uk/government/uploads/system/uploads/attachment_data/file
/371096/claiming_the_health_dividend.pdf
• A fuller summary of the evidence is due to be published in the near
future.