LFIG Seminar: ‘Transport as if people mattered’

22 June 2000

GETTING VALUE FOR MONEY FROM TRANSPORT

Alan Wenban-Smith1:

INTRODUCTION

Labour’s Strategy

Labour’s pre-election Transport Strategy2 placed transport alongside other aspects of New Labour’s
larger political project, particularly social inclusion. It opens with the words “Transport is vital to the
future of our economy and to the everyday life of each of our citizens. We value it because it gives us
access to jobs, leisure, services, family and friends. All of this is crucial to the quality of life. The
effects of transport policy thus reach far beyond the transport sector – into nearly every aspect of the
nation’s life. This is why it is so important to get transport policy right.”.

The objectives of the Transport Strategy were to increase transport choice for all social groups, and
tackle the environmental and economic impacts of traffic. The strategy put forward was explicitly not
‘anti-car’, recognising that for many people it had become a necessity. Thus it was recognised that
seeking to limit growth in ownership would be both socially divisive and politically unsaleable. The
key components of the strategy were to:
• make public transport a real alternative to the car for more purposes;
• foster less car-dependant patterns of activity and development;
• shift the balance of cost from car-ownership to car-use (reducing total cost to low mileage users);
• increase the cost of use over time to reflect costs imposed on others;
• shift to local and regional levels more of the responsibility for ‘joining-up’ transport decision-
making (within and beyond transport itself).

In the context of the evolution of transport policy and public opinion by the early 90s this was not a
particularly radical programme. In most respects it simply anticipated the outcome of the ‘great
debate’ about transport policy launched in the last years of Conservative government, together with
the emerging consensus of leading professional opinion (often referred to as ‘the New Realism’3).
Possibly the most distinctive innovation was the focus on transport behaviour and on planning
process, rather than on the headline-grabbing construction projects and institutional changes that tend
to feature in conventional party manifestos.

Where Are We Now?

The 1998 Transport White Paper embraced much of the New Realism agenda and proposed many
individually worthwhile ideas, but lacked a clear strategic focus and legislative or financial muscle.

1
Associate with SQW (economic development consultants), planning adviser with MVA (transport planning
consultants), independent consultant in urban and regional policy, transport adviser to Shadow Transport
Secretary 1995-6; Visiting Professor of Planning, Newcastle University 1997-9; External adviser on research,
DTp and DETR, 1993-8
2
‘Consensus for Change: Labour’s transport strategy for the 21st Century’, the Labour Party, June 1996
3
P Goodwin et al (1991) ‘Transport: the new realism’, report to the Rees-Jeffries Road Fund; Oxford: Transport
Studies Unit, University of Oxford
The main reason for this retreat seems to have been fear of offending ‘Mondeo man’4. This now
continues to inhibit central and local government from raising money to improve public transport, or
from tackling travel behaviour in a serious manner. Traffic and congestion are set to increase,
because public transport is not becoming (or widely expected to become) a real alternative to the car.
The forecasts produced by CIT confirm continued growth in congestion as road traffic continues to
grow faster than capacity. The nature of the discussions around rail franchising and public/private
partnerships for the Channel Tunnel link and London Underground make it abundantly clear that rail
improvements will be a long time in coming. Bus improvements, while welcome, are now recognised
as insufficient to make more than a marginal difference. The expectation of yet more congestion is
affecting investment and economic growth in the more dynamic regions, without apparently
benefiting areas with spare capacity.

Technical opinion is that the situation will get worse in the medium term, whatever we do. This
makes it even more vital to have a credible story that the ‘supertanker is turning’ – but the reverse
seems in fact to be the case. Even the Tories accepted (after 20 years of trying) that we cannot ‘build
our way out’, yet money has recently been released for a few more road schemes – ‘to relieve
bottlenecks’. This will not change the prognosis of rapidly increasing congestion5. In the absence of
a clear strategic view of where we are going, it merely undermines Labour’s credibility. In short, we
are in a mess on transport.

Why Does Evaluation Matter?

While there is a broad technical consensus on the kinds of transport policies that are needed, there are
two major obstacles in the way of implementing them:
• Lack of political leadership able/willing to take on the issues publicly and related institutional
barriers6
• Lack of methodologies to convincingly demonstrate wider benefits to either HMT or the public,
or to choose/prioritise action.

These deficiencies are linked: politicians (not unnaturally) do not want to espouse causes that involve
upsetting large sections of the population and well-entrenched lobbies. This is particularly so where
the benefits are not clear, and/or not translatable in to terms that permit the Treasury to release the
money to effect a cure.

The problem thus stems, at least partly, from lack of a persuasive language in which to conduct the
public debate about raising and spending money in the transport field7. The thesis of this paper is that
behind the political problem is a more technical one: the longstanding lack of any convincing methods
for demonstrating benefits from transport investment, except in the narrowest transport terms –
primarily user time-savings8.

4
Downing Street made changes to the Transport White Paper during the very last stages of its production (Local
Transport Today, 18/6/98 ‘White Paper to await July spending review as driver-friendly ideas written in’)
5
Standing Advisory Committee on Trunk Road Assessment (SACTRA) (1994), ‘Trunk Roads and the
generation of traffic’: this pointed out that (even if the effect is more than simply moving the bottlenecks a short
distance down the road) in most situations more traffic is generated to fill the road space created.
6
G Vigar, M Steele, P Healey, J Nelson and A Wenban-Smith (2000) ‘Transport planning and Metropolitan
Governance – institutional issues in implementing the new agenda for transport’, Rees-Jeffries Road Fund,
Landor Press, London
7
P Goodwin (1997), ‘Solving Congestion (when we must not build roads, increase spending, lose votes, damage
the economy or harm the environment, and will never find equilibrium)’, Inaugural Lecture for the Professorship
of Transport Policy, UCL
8
there has been much more progress on quantifying non-transport costs

2
WHY DOES TRANSPORT MATTER?

Transport is not just a localised political embarrassment. The impacts extend far beyond the field of
transport itself, because transport successes and failures impact in important ways on the larger
economic, social and environmental agenda. This suggests that part of the solution may lie in
understanding these wider effects and harnessing them to the appraisal of transport.

Transport has been called ‘the maker and breaker of cities’ 9. A glance at a map shows how, over
extended periods of time, the transport system has had a fundamental effect not only on the shape of
urban areas but also on the regional patterns of cities, towns and villages. Roman roads, turnpikes,
canals, railways and motor roads have in turn stamped their mark on the human and economic
geography of Britain. Examples can be seen everywhere - ranging from the persistence today of
settlements that started as Roman road junctions or river crossings, to the subregional economic
corridors that have grown up in the last 20-30 years along parts of the motorway system10.

The most recent transport era has been fifty-plus years of ever-increasing road dominance. This has
enabled (and increasingly, driven) dispersion from major urban centres, contributing in a major way
to making our cities and towns problem areas and utterly changing the countryside. The best-off have
moved furthest, while poverty has concentrated further in the areas already the poorest. The ease of
establishing any single activity in an ‘out-of-town’ location has undermined multifunctional centres
and often means that growing points of the economy are in locations inaccessible except by car.
Services like shopping, banking and health (and the jobs they offer) are becoming concentrated in
fewer locations, whilst the populations they serve are becoming more dispersed. The car is
increasingly a necessity for accessing the full range of social and economic opportunity: ‘transport
poverty’ is a current reality for those who depend on declining public transport. Social polarisation,
loss of economic connectivity and ‘critical mass’, environmental degradation and unsustainable car-
dependence have reinforced each other in a vicious circle.

The assumption that this will all continue pervades property and labour markets – and the outlook of
large sections of the population. The Government’s wider political aims of social inclusiveness and
environmental sustainability will be frustrated by failure to tackle this phenomenon. By the same
token, tackling the transport problem effectively has the potential to make a major contribution across
a much wider agenda.

The Need for Change in Evaluation Practice

The legacy of decades of ‘predict and provide’ is extraordinarily sophisticated mathematical models
for predicting traffic flows on networks and putative user time-savings. Such conventional appraisal
methods focus on short-term effects within the transport system itself, and are almost entirely useless
for addressing the larger, longer-term issues outlined above. They failed utterly to identify or assess
the enormous non-transport effects of decades of unbalanced investment in roads. The larger
economic, social and environmental cost (and the possible benefits of high-tech corridors) all fall into
the category of ‘unintended side-effects’.

Most of the recent progress in transport appraisal has focused on refining the measurement of the
environmental costs of schemes11. The major strategic potentials of transport (positive and negative)
fail even to hit the scoring surface. We lack the language in which to discuss these issues, and to
weigh alternative courses of action.
It follows that transport evaluation methodologies are not a technical backwater, but essential to
moving the political debate forward. They are also necessary to translate the results of that debate
9
C Clark (1957), ‘Transport: maker and breaker of cities’, Town Planning Review, 28, 237-50, quoted and
discussed in Peter Hall (1994), ‘Squaring the circle: can we resolve the Clarkian paradox?’, Environment &
Planning B: Planning and Design, 21, s79-s94
10
P Hall et al (1987), “Western sunrise: genesis and growth of Britain’s major high-tech corridor”
11
‘A new deal for trunk roads in England: understanding the new approach to appraisal’ DETR, July 1998

3
into action. With limited money (always) we must be able to show that any particular course of
action represents good value for money compared with alternatives. To meet these needs will require
a radical departure from conventional approaches.

A NEW APPROACH TO TRANSPORT EVALUATION

Evaluation and Underlying Socio-Economic Processes

We know from our own experience how transport affects not just how we travel, but also almost
every aspect of daily life: where we choose to live is influenced by the accessibility of work,
shopping, leisure, schools and health services. Similarly, businesses and public services locate so as
to be accessible to customers, suppliers and workforce: changes in accessibility alter labour markets
and the size and shape of catchments they serve, triggering changes in their organisation and
distribution. These impacts of transport on locational choice take rather longer than impacts on
choices of transport mode, time and route of conventional transport models, but in the long-run are
more influential because they connect to the dynamics of decay and regeneration.

The conventional land-use/transport planning approach underestimates the significance of transport,

because it equates such changes in patterns of activity with changes in land-use. It tends to be
assumed that changes in the pattern of activity are limited to those that can be accommodated by
changes in the pattern of physical development, through new building, demolition and changes of use.
In this view land allocations and land-use controls provide the means of limiting the underlying
growth of travel demand (eg PPG13). But there is plenty of scope for exercise of locational choices
through turnover of the existing stock of buildings, or ‘churn’ (90+% of the housing market, for
example, is second hand). Over time the development industry will respond to such changes in the
pattern of activity, and eventually this will tend to become reflected in the pattern of new
development.

These processes of economic and social change are summarised in Figure 1. Change in the pattern of
land-use is the last step in the process. Demand for development in new locations followed the
changed pattern of activity and transport. What effectively happens is that the changed patterns have
become confirmed and ‘hardened’ as a new pattern of development. Reversion to previous patterns of
activity may have been made difficult or impossible12.

Figure 1: Vicious circles:

(a) car-dependency and dispersion; (b) Dispersion and social polarisation
Advantage Dispersion
to out of town (wider choice of jobs
development
and housing for
car-users)
Increased • more job competition • area becomes less
congestion of • people in work move out attractive to
older urban areas people in work

Better roads Increased Dispersed Dispersed

More choice car ownership pattern of pattern of
of location and use activity development

reduced viability • less viable public • more limited access

of public transport transport to training
• less ability • social stigma
to improve housing • poorer quality housing
Increased
car-dependency

Changing Direction

12
retail patterns provide a good example of this, because retail development is a ‘zero-sum game’: out of town
developments redistribute a limited amount of trade. Consequent closures of town centre shops can
permanently weaken the attractions of the town centre as a focus, not just for shopping but for a wide range of
other functions, giving further impetus to decentralisation

4
The analysis above suggests that transport policy offers a faster and more direct route to significant
changes in patterns of travel demand than land-use planning13. Further, it suggests that transport
policy may be a powerful means of influencing urban form and settlement pattern as well. This is
because its influence on patterns of activity within existing stock is the precursor to the slower
processes of obsolescence and new construction. Given the political need for results in a reasonable
timescale, the effect of ‘churn’ on both transport demand and patterns of economic and social activity
is an enormously important consideration14.

The longer-run effects on urban form and settlement pattern are of obvious strategic significance, and
have the potential to reinforce the transport benefits in a ‘virtuous circle’. There is also the
opportunity to reinforce transport effects with complementary, non-transport measures (Figure 3).
Examples of how these effects might be evaluated using available data are given in the Appendix15..

Figure 3: Virtuous circles: transport and urban regeneration,

Better public transport

(equitable access to housing,
jobs & training - inclusion)

• better quality housing • better job chances

• more locals in work • area more attractive
to people in work

urban
Housing Training
regeneration
programmes programmes
cycle
• more qualified • more local income from employment
• more able to maintain • more role models in employment &
and improve housing training

OUTLINE OF A NEW APPROACH

‘First Wave’ and ‘Second Wave’ Effects

Past appraisal methods have been criticised as excessively narrow, but this does not mean that
appraisal can be dispensed with. Even if all the foregoing is accepted, it leaves an important question
unanswered: how do we ensure that action taken under this new set of policies represents value for
money?

The first step is to recognise that in addition to the direct, short-run effects of transport assessed by
conventional methods, there may also be indirect, longer-term effects. For brevity and convenience I
will call these effects ‘First wave’ and ‘Second wave’ respectively. The second wave effects depend
upon the interactions of transport change with longer-run social and economic processes - and (as
suggested in Figure 3) can also be reinforced by other actions. Second wave processes are complex
and little understood, but both the historical record and preceding analysis suggests that they may

13
in any case, transport modelling exercises suggest that feasible changes in location of new development have
little effect on transport demand. In spite of the myriad deficiencies of such models, I believe this result to be
robust: ‘churn’ is more important
14
As a former geologist I would offer as a metaphor the relatively fast behavioural adaptation of creatures to a
changed environment which drives the slower process of physical selection leading to the evolution of species
15
The research on which these are based is described in more detail in E Hill, D Simmonds and A Wenban-Smith
(1997), “Demonstrating the Regeneration Impacts of Transport Investment”, European Transport Forum, 1997

5
ultimately be more important than first wave effects. Some examples of the kinds of effect that fall
into each category are given in Figure 4.

Figure 4: First and second wave effects

Impacts First wave effects Second wave effects

Economic ♦ site access – development effects
♦ labour supply effects
♦ supply chain efficiency
Environmental ♦ modal shifts
♦ air and noise pollution changed traffic
patterns
Social ♦ current residents’ access to jobs
♦ direct housing market effects
♦ direct effects of changes in access on
viability of town centres
♦ agglomeration effects on productivity
♦ indirect environmental/social effects on
industrial investment
♦ large-scale development patterns
♦ greenfield use
♦ urban regeneration/decay
♦ social polarisation
♦ accessibility of services
♦ indirect housing market effects

Placing these broader and longer-term impacts of transport where they belong – at the centre of
appraisal – has a number of strands

a) Establishing methodologies for assessing the indirect effects of transport changes on economic
competitiveness and social fabric (eg via supply chains and labour and housing markets), as
discussed above;
b) Distinguishing the kind of tactical appraisal appropriate to individual transport schemes from
strategic appraisal of a larger, longer-term strategy;
c) Establishing means of jointly appraising a linked set of transport and non-transport actions,
properly valuing synergies but avoiding double-counting;
d) Paying more attention in all the above to the differing impacts on different social groups, so that
issues of equity (‘fairness’) play a larger and more explicit part;
e) Expressing these rather technical matters in terms that contribute to the wider political debate.

It is disappointing that the neither the SACTRA report on the links between transport and the economy,
nor the Government’s recent response16 explore these matters in any depth. In brief, SACTRA took the
view that evaluation of indirect effects was largely a matter of refining the calculation of ‘first wave’
employment multipliers (particularly in the context of regeneration area objectives) – and the effects
would in any case be small (SACTRA 10.176-188). The Government view appears to be that this
matter can safely be despatched into the long grass of ‘further research’ (Government Response, para
34). While SACTRA recommends broadening transport modelling to explore wider labour market
effects (Recommendations 11.04, 11.05 and 11.40) the response does not even accept the need for
research (Government Response, para 69).

Valuing ‘Second Wave’ Effects

The core concern of this paper is that the very largest effects of transport are ‘second wave’ – and that
these are excluded from the decision-making process because they are too little understood to be
quantified. Although they may appear as qualitative factors in the New Approach to Transport
Appraisal (NATA), Nat Lichfield makes the point that this provides no clear way of understanding the
trade-offs with direct transport effects17. Given the lack of institutional ownership such effects will
remain a weak and shadowy presence alongside conventional COBA expressed in familiar money
terms. This is further compounded by the inability to deal with synergies between transport and non-
transport actions.

16
SACTRA (August 1999) ‘Transport and the economy’; DETR (May 2000) ‘ The Government’s Response to
the SACTRA Report on “Transport and the Economy”’, Cm 4711
17
N Lichfield (2000), ‘Achieving social value for money in transport: a critique of DETR appraisal
methodology’, LFIG seminar

6
Dealing with these issues has three key components, briefly discussed in subsequent sections:
1. Establishing a ‘chain of reasoning’ for linking transport and other complementary action to
longer-run (‘second wave’) effects.
2. A range of methodologies (which can be independent of this framework) to quantify particular
components of the overall effects.
3. An understanding of how the larger outcomes are likely to be valued by the public in general,
and (especially) the sections of the community most affected (in Nat Lichfield’s terms the
impacts). Of particular importance is the question of how the inevitable trade-offs between
different aspects of impact are valued (eg environmental versus economic).

An Evaluation Framework

Figure 5 illustrates a general framework for examining transport effects:, independently of the
particular methods of quantification used18.

Figure 5 Transport effects – ‘chains of reasoning

Action Process* Impacts* Adjustments Benefits*

1. Spending:
•construction - displacement
•operation + location value
•multipliers

Transport change 2. Develop’t sites

•infrastructure •accessibility New development Economic benefits
•services •confidence and employment and/or disbenfits
•image •competitiveness
•market share
•output
3. Existing stock + regeneration
•intensification •employment
•accessibility - displacement
•reinvestment •income
Complementary •confidence + agglomeration
•employment
action , eg •image - dispersion
•planning policy •speed/quality
a) Labour market : of recruitment Net benefit
•regeneration
•scale, choice •productivity •trade-off
•training
•wage levels economic vs social
and environmental
b) Housing market •demand benefits
•job choice •property values Allocation of benefits
•service choice •churn of occupier and disbenefits
between transport
c) Commercial
•productivity and other actions
•customer base
•property values
•area served
•churn of occupier
•business travel Environmental and
social benefits
and/or disbenefits
•increased choice + regeneration •environment
4.Personal sector
•congestion and - social polarisation •social fabric
•environment
pollution •quality of life
•journey to work
•social polarisation

* ‘Processes’ and ‘Impacts’ are dynamic effects over time, whils t ‘Benefits’ are comparisons at a specific future point in time between
outcomes with alternative courses of action, or without action ( ‘baseline’)

The key points are as follows:

a) Action: the framework needs to include both transport actions and complementary action in
other fields. The test of complementarity is essentially the quality of the chain of reasoning and
supporting evidence for a greater effect from the combined package than for its components
carried out separately.

b) Process: the link between the action taken and its wider impacts is through the economic, social
and environmental processes affected by changes in accessibility. The effects on the market for
existing stock, and hence labour markets, are particularly important.

18
taken from the author’s comments to SACTRA on behalf of Segal Quince Wicksteed Ltd. The basic
suggestion was made by David Simmonds (1998), ‘Analysis of transport impact studies’, SACTRA.

7
c) Impacts: induced impacts on economically significant variables.

d) Adjustments: the value of economic impacts will be modified by the interaction of economic,
social and environmental impacts at local subregional and wider levels. Displacement will
clearly depend upon the area of interest, but the location value will determine whether
redistribution is worthwhile even where the net effect is zero. The values attaching to
regeneration and agglomeration may be difficult to ascertain19, but should receive formal
consideration: they may well be negative (eg where a scheme tends to increase social
polarisation or reduce economic ‘critical mass’).

e) Benefits: there are two types of consideration here

• the valuation of environmental and social fabric impacts (‘quality of life’) as economic
benefits;

• second round effects of productivity and economic linkage improvements on

competitiveness and market share, and hence on employment and income.

The conventional valuation of time savings may include some of the above effects, but is likely to be
limited to those arising in the short term, as a direct result of the transport investment (‘first wave’
effects). The longer term indirect effects (‘second wave’) are likely to more important. The use of
time-savings as a proxy for some of these economic benefits should wither away as more satisfactory,
direct measures are developed.

Methodologies

To be useful in practical terms, methodologies for predicting the impacts of projects and strategies must
satisfy a number of requirements:
• they must be appropriate in scale (cost, level of detail etc) for the activity being
appraised;
• they must make use of data which is reliable and readily available; and
• they must be acceptable to the funding agency.

With increases in scale and range of linked actions, the timescale lengthens, indirect impacts become
increasingly important and the methodologies required become broader in their scope. This is illustrated
in Figure 6: the direct effects of a single project can be predicted from a traffic model, but the wider
effects of large-scale packages and strategies require the extension of strategic transport models to
incorporate land-use and macro-economic methodologies.

19
in this connection it is argued that agglomeration effects are real, and critically influenced by transport
investment: whether for good or ill depends on the nature of the actual scheme.

8
Figure 6: Methodologies to impact assessment
impacts
activities First wave second wave

Schemes transport
models

Packages extended
models

macro -
Strategies
economic

These different scales of impact all have a place in the ‘chain of reasoning’ approach. The quantitative
analysis of direct transport effects provides a step in the reasoning about larger-scale and longer-term
effects, as do the approaches to evaluating non-transport effects in the appendix to this paper.

The purpose of this paper, however, is not the examination of methodologies, but the connection of
these into political decision-making processes. This is the crucial connection into the issues that Nat
Lichfield raises in his paper20, and the subject matter of the concluding part of the paper.

RECONNECTING TO PUBLIC VALUES

Even if the problems of estimating ‘second wave’ effects can be resolved, merely placing the results
alongside each other (as proposed in NATA) does not, as Nat points out, solve the problem of relative
valuation. This requires incorporation of communities’ perceptions of problems, values and trade-
offs21 into the heart of the decision-making process. On the basis of the author’s experiences in this
area22, the two key elements are understanding, first, where public opinion stands and second, how far
it can be moved through discussion and understanding. There are some important points to be made
about each as an input to evaluation:

• Opinion research allows us to establish the disposition of opinion between different groups in
society (eg by age, gender, ethnicity, area of residence, etc). It is most useful if used to explore
the matters that the public are ‘experts’ on – their values, what they experience as problems and
(most importantly) what trade-offs they might be prepared to make. Although essentially passive,
opinion research is the starting point for the active task of exploring value as perceived by
different sections of the community. It is unlikely on its own to allow relative valuations of
different outcomes, or exploration of trade-offs between them.

• Public participation allows active public engagement where a need to resolve differences has
been demonstrated. The key techniques are about using the two-way flow of information and
opinion to explore the possibility of mutual adjustment of initial positions through dialogue, and
include focus groups, citizens’ juries, open forums, etc. The ‘chain of reasoning’ approach is a
useful input to the information-giving aspect. The output will be a clear picture of how different
groups value the different outcomes, and what compromises they might be prepared to accept:
these could well include alternative uses of the money (opportunity cost). This is critically
important to any political decision-maker23.

20
N Lichfield (2000), ‘Achieving social value for money in transport’, LFIG seminar
21
perceptions, values and trade-offs are the matters on which the public are the ‘experts’
22
A Wenban-Smith (PTRC, 1988), "Access to Inner Birmingham - who wins, who loses?"; (European Transport
Forum 1994) "The South Birmingham Study: reconciling local and strategic transport needs".
23
It is important to remember that these techniques use a sample (representative or self-chosen). This will show
what people can be persuaded of, but any actual persuasion applies only to those involved – the rest of the
population will still hold their original views. Rolling out the conclusions is a public relations task.

9
SUMMARY AND CONCLUSION

Conventional approaches to transport evaluation fail to deal with the major economic, social and
environmental effects of transport beyond the transport system itself. The need for a broader
framework is inherent in the breadth of the policy aspirations of the Government. Without this,
appeals to ‘joined-up thinking’ are mere rhetoric. The proposals here are for
a) a framework which allows the results of conventional quantitative methods to be placed
alongside evaluations of aspects for which quantitative methods either do not exist or are
poorly developed; and
b) the testing of relative valuations and trade-offs through public participation processes before
political decision-making.

This is not inconsistent with the DETR’s NATA approach, but extends it in ways which would
require a significant research effort and institutional and process changes around investment decision-
making. Such changes would help to answer the criticisms made in Nat Lichfield’s accompanying
paper.

10
APPENDIX: EVALUATING THE SECOND WAVE

Examples from practice

Even the Treasury accepts that there is a real danger that the stress on quantifiable outputs means that
many of the most important results are not represented, or only by more or less unsatisfactory
proxies24. There is a real problem here for both politicians and civil servants. In the absence of some
better way of handling these matters politicians will take decisions by other means, running the risk of
white elephants like the Humber Bridge. This is the ‘upside’ risk of over-investment, to be set against
the ‘downside’ risk which is the focus of the paper.

In the absence of established evaluation methods there are two approaches commonly adopted:
• evaluations are cooked to support a decision already reached by other means
• evaluations simply ‘qualifying’ a large number of projects for consideration (the effect of COBA
for transport), the few that can be afforded again being chosen by other means.

The ‘second wave’ idea was developed by the author in the course of consultancy projects in London,
Merseyside and the West Midlands25. Essentially it is a means of exploring how transport can trigger
large indirect effects by influencing powerful social and economic dynamic processes. Such effects
are inherently unmodellable, but not I think unobservable. The crucial point in the argument about
the larger/longer-term effects of transport change is that on an historic time-scale it is clear that
transport has been a key ingredient in precipitating these kinds of effect.

Two approaches were considered:

• ‘bottom up’: looking in detail at the effects of a specific set of transport and allied non-transport
schemes on ‘churn’ in labour and property markets
• ‘top down’: looking at the effects of accessibility on urban systems as a whole in a more general
way and over a longer time frame.

A Bottom-Up Approach: Evaluating Labour Market Effects

Conventional appraisal of transport counts only jobs created directly through construction (temporary)
and operation of transport, and indirectly through opening up development sites. The arguments of
this paper is that there are more significant indirect effects through labour market churn.

Hard to fill vacancies: there is an economic benefit from better accessibility if this speeds or eases the
filling of ‘difficult’ vacancies. A measure of the job creation potential would be the increase in the
labour pool in appropriate broad occupation group brought within a suitable journey time threshold
(45 mins say) by the project. Figures on mean and median time taken to fill vacancies are available
down to JobCentre level from NOMIS and could be used in the following calculation:

increase in % increase in relevant labour force numbers of ‘difficult to fill jobs’ in centre (=
number employed = (= increase % over 1991in relevant x numbers of vacancies unfilled for at least a
in ‘difficult to fill’ occupation groups brought within month: in occupation groups with median
jobs in centre time threshold as result of project26) unfilled duration >4 weeks- ie half unfilled
total27)

The economic value would be the additional output created by the earlier filling of these jobs.
24
compare the Green Book (1990) with the HMT advice on evaluation of urban regeneration projects (1994)
25
E London line extension (SQW, 1991); South Birmingham Study (MVA, 1993); Merseytravel Regeneration
Study (MVA, 1996); W Midlands ERDF Transport Study (MVA/SQW, 1997). The two latter studies are
discussed in E Hill, A Wenban-Smith, D Simmonds, M Grant and J Sidebotham (1997), ‘Demonstrating the
regeneration effects of transport investment’, PTRC European Transport Forum
26
1991 from special workplace statistics, and increase from inspection of transport model inputs, JDT (NB:
where there is an allied training initiative, this too will increase the relevant numbers)
27
dataset VSOC90M from NOMIS, updated quarterly, available to Job Centre level. It needs to be borne in
mind that only around a quarter of vacancies are notified to Job Centres; this compensates for the rather
optimistic presumption that an increase in the labour pool will produce a corresponding increase in ‘hit rates’

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Turnover vacancies: a similar calculation to the ‘difficult to fill’ estimate, except that here the object
is to estimate the ‘turnover’ of existing jobs made relatively more accessible to regeneration area
residents. The benefit is in terms of area regeneration rather than added output:

increase in number of % increase in relevant labour force numbers of turnover job

regeneration area (= increase % over 1991in relevant opportunities in centre (= total
residents employed as = occupation groups in regeneration x numbers of jobs in centre * ‘churn
result of better access areas brought within time rate’ by appropriate broad
to turnover of existing threshold28 as result of project) occupation group29
jobs in centre

A Top Down Approach: Evaluating Agglomeration Effects

The agglomeration argument offers a complementary approach, and another possible route to
quantification. Strategic agglomeration benefits arise over the longer term from a larger and/or more
effectively interacting mass of economic activities. Transport can increase the size of the
geographical area over which effective interaction can take place and/or the intensity of interaction
within a given area. Public transport, in particular, could materially assist both by offering the
oportunity to achieve higher density/intensity of activity without incurring environmental and
congestion penalties.

Estimating such effects in the present state of knowledge requires some fairly heroic assumptions and
necessary caveats. It should be noted, however, that quite a few of the most influential figures used in
policy decisions at the highest levels tend to be of this kind 30. Using the the range of estimated
elasticities of productivity with respect to city size from the literature31, an estimate of the economic
value of agglomeration contributed towards by transport can be derived using the equation:

increase in city GDP = productivity increase x current GDP/hd x current city size x city-size increase

For Birmingham an increase of 5% in effective city-size would deliver an annual benefit in the range
£9.4 - 93.6m32. Of course transport is not the only contributor to agglomeration, but it must be one of
the most significant (particularly public transport). And any environmental and social benefits of
agglomeration are additional to the economic benefit.

Some heroism is not out of place: transport has always underplayed the larger/longer-term effects and
insisted on ‘examining an elephant with a micrscope’. The downside of that is all too obvious - but
we should remember that for the right transport measures there is an equally significant upside. This
kind of calculation might at least provide a ‘ballpark’ estimate of the scale of one aspect.

28
Census workplace statistics suggest 50% of social class C,D and E travel less than 5km to employment.
Catchment may be defined by appropriate travel time contour by public transport, with and without project.
29
the Labour Force Survey provides a means of estimating national job turnover by occupation (same detailed
breakdown as Job Centre vacancies). This can be applied to existing job numbers to give totals becoming
available (BEIC has done this for Birmingham City Centre and estimate about 100,000 pa - around a quarter.
The churn rate varies from around 10% among legal professionals to over a third among sales assistants and
catering staff (private sector clerical/receptionist and other sales jobs also show rates over 25%) Existing
employment by broad occupation groups from Census.
30
for example the CBI’s £15bn for costs of congestion to industry (regularly adjusted for inflation) or Ecotec’s
10-15% reduction in fuel cosumption through land-use (the basis of PPG13). Both of these figures have only
very sketchy provenence - but in the absence of anything better they must serve - and do!
31
Glaister et al (c1996), Corporation of London/LSE gives a range of 0.1-0.01
32
GDP/worker in Birmingham = £18,720; guesstimate of no of workers in effective conurbation: 1 million

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