Better Transport

Roads get built by becoming part of the Government's programme of road building for local roads.

Almost all local authorities bid for Government funding for their road schemes because they don't have enough money to build them themselves. When a local council wants to build a road, it puts together a business case for the Department for Transport that examines the key economic and environmental impacts of the road. The department examines the case and decides whether the road offers 'value for money'. If it decides it does, the department will award it provisional funding and enter the scheme into the road building programme for local roads (often called the 'local transport programme of major schemes' – or sometimes the local transport plan programme, because the road schemes are in local transport plans).

Before going to the Department of Transport with a business case, the council will usually include the proposed road in some of its strategic planning documents.
More about the planning process

The business case
In August 2007 the Government published important new guidance for local authorities to follow if they wish to apply for funding from the Department for Transport. This important guidance says that the department expects there to have been some level of public consultation about the scheme before the submission of the business case - however, it's not mandatory.

The guidance

Examination of alternatives: The new guidance is very strong on the need to examine non-road alternatives. The council must have examined different options, not just automatically gone straight for a road scheme or different routes.

The guidance says:

2.5.3 The assessment of alternatives should start from an initial wide base of possible options. Those options should include measures that reduce or influence the need to travel, as well as those that involve capital spend…. Scheme bids should demonstrate a clear path from identifying the problem to arriving at a preferred solution.

2.5.4 It is expected that this process of options appraisal will include some element of public/stakeholder consultation.

2.5.5 When the scheme is submitted to the Department, it will expect the MSBC to include a detailed assessment of the scheme against the alternative options that would, as far as possible, broadly meet the same objectives. It is important that these should also be compared against a realistic do minimum scenario. The testing of alternatives is not an add-on to the appraisal but an integral part of the process of determining the preferred option. Any major scheme for which the appraisal of alternative options is considered inadequate or where the Department considers alternative options to be preferable, may not be accepted for funding. Authorities should state in their scheme bids which options have already been discarded without being fully worked up, and the reasons and evidence for discarding them.

2.5.7 For highway schemes there should be a consideration of different link/junction standards and other alternatives to address the problems in the area, such as public transport provision, demand management policies, traffic management measures and strategies. The Department would expect authorities promoting highway schemes to examine the scope for achieving the scheme objectives through non-road building options such as public transport improvements or demand management measures. Suitable options should be included in the option appraisal process. If the promoting authority concludes that non-road building options are not capable of delivering the objectives, robust evidence to demonstrate this should be provided in the MSBC.

2.5.9 Authorities are encouraged to be imaginative in their consideration of possible solutions, and not to restrict their options appraisal to the tried and trusted scheme types. Authorities should give due consideration to new developments in public transport systems around the world and to keep abreast of evidence and best practice. While the Department will of course expect any such scheme proposals to be robust and to demonstrate value for money and deliverability, the Department will wish to ensure that potentially ‘difficult’ options have not been unduly discarded.

Through this process, the local authority tries to make a strong case for the road so that the Government will enter it into the roads programme NATA
As well as the following the new guidance, the council also needs to make sure its business case is compliant with the New Approach to Appraisal (NATA). Through NATA, the council has to assess the scheme for how well it meets objectives such as protecting landscapes and reducing carbon dioxide but also reducing journey times. NATA is covered on a very clear government website called WebTAG (TAG stands for transport analysis guidance).

The 'rules' for councils to follow:

• Within the WebTAG website
• Within the Department for Transport website

The business case will include a summary called the appraisal summary table (AST).
This is a vital document – not least because the Minister will look at it when reviewing the road. It is a one-page summary of the key impacts of a scheme, under the headings Environment, Safety, Economy, Accessibility and Integration. From a summary table you should be to see key things like the CO2 impact, the economic benefits and costs of the scheme, and the accident savings. Following lobbying by Campaign for Better Transport, the Department for Transport will soon be publishing on its website the ASTs for all the local road schemes it has approved.

Stages of funding
The Department for Transport operates a three-stage approval process for local authority major schemes:

• Programme Entry once the initial business case has been approved by the department
• Conditional Approval once the planning processes have been completed and the statutory powers are in place
• Full Approval once a final tender price has been secured from a contractor

A new business case has to be produced for each stage to prove value for money for the scheme.

Review of the business case
After the council has submitted its business case, the statutory environmental bodies – The Environment Agency, Natural England and English Heritage – will be asked to comment on the appraisal summary table.

The Campaign for Better Transport and CPRE are also always asked for comment on the appraisal summary table for local roads. We always ask local campaigners for comments to submit to DfT. Because of our lobbying, the Government now requires all local authorities to publish a road's business case on its website.

Example: Business case for the Heysham-M6 Link Road, on the Lancashire county council website, and a critique of that same business case, which the local campaigning group commissioned. The critiqued is stored on the group's website (140K pdf)

Example: business case for the South Devon Link Road (Kingskerswell Bypass), on the Devon county council website, December 2007

DfT officials prepare a report for the Minister which includes comments on the scheme and its level of public acceptability. If the Minister is satisfied the scheme provides value for money, and it is listed in the regional funding allocation, he or she allows the scheme to enter the local road building programme.

Once a scheme is approved
Once a scheme has been entered into the roads programme, it is the responsibility of the council to take the scheme through the necessary statutory planning processes. When this is complete the council updates the business case and sends it back to the Department for Transport for reconsideration for conditional approval. If the department is satisfied the scheme still represents good value, it approves the scheme. Conditional approval is given if the council has not yet received quotes for construction; full approval if it has and the department is happy with the final cost.

What happens if the costs go up
Almost always, the cost of a road scheme rises during the years it is being considered. While this would change the scheme's value for money, the Department for Transport hardly ever asks for re-appraisal of the road’s value while it is going through the planning process. Officials reconsider value only when the scheme comes back to them for conditional/full approval after the statutory planning processes have been completed.

The department has also said that cost increases will be dealt with during the Regional Funding Allocation process – and the region can reject a scheme from its 10-year funding priority list if it becomes too expensive and cannot be accommodated in regional budgets.