Better Transport

Officials for the Transport Minister will prepare advice on whether the scheme offers good value. This assessment is a major influence on the Minister’s decision whether to approve the scheme for entry into the roads programme.

The officials' assessment of the scheme's value for money is based mostly on economics.

The officials work out a 'benefit-cost ratio' (BCR) for the scheme by looking at things like construction and maintenance costs, time savings if the scheme went ahead and disruption to the economy during construction. For instance, a scheme costing £100 million to build but being seen to provide £200 million worth of benefits has a BCR of 2.

The BCR greatly determines the assessment of the road’s value:

• If the BCR is 2 or more, the road is generally considered to be of high value
• A BCR of 1.5 –2 generally means the scheme considered to be of medium value
• A BCR of 1 - 1.5 generally means the scheme considered to be of low value
• A BCR of less than 1 generally means the scheme is considered to be of poor value

BCRs can range quite a bit. Recent projects had BCRs as high as 10
(44k pdf).

(This categorisation is outlined in DfT guidance on assessing value for money.)

But the overall value of a road can be affected by non-monetised factors. Officials also provide a short commentary to the Minister about non-monetised impacts such as damage to the landscape. If the impact is very large, the scheme's value assessment may be lowered. This has happened before and schemes have been rejected. For example, the huge negative impact that would have come from widening the A303 through the Blackdown Hills caused the project to be rejected.

Government guidance says that most high value-for-money projects should be funded, as should some medium value-for-money projects but very few that drop below that level.

Where the money comes from. Motorway widening scheme and large trunk road schemes such as the A14 are considered national schemes. Funding for them comes out of the central Highways Agency road building fund. Scheme that are considered to be only regionally significant are paid through the regional funding allocation, which currently sits at about £1 billion a year.

But politics and the public can also influence the Minister's decision. He or she may be swayed to refuse a road that is highly controversial and not wanted by the public - and he may be swayed by an MP to approve a road for political gain.