• {{title:Why the Grey Route is not good Value for Money}}

      Why the A27 Arundel Bypass Grey Route is not good Value for Money

    • The benefits of building a new major road are assessed, according to Department for Transport guidelines, in terms of shorter, safer, faster and more reliable journey times for more drivers.  So the more extra traffic Highways England decide to predict, the better value for money the scheme appears to be. 

      Alice in Wonderland moment: from Highways England’s point of view as a road-building company; if a new road is going to induce extra traffic, that is a helpful contribution to the economic justification for building it.

      At Arundel, there is doubt over the volume of traffic that Highways England is forecasting. There are several technical reasons for suggesting that Highways England’s traffic model and its assumptions are inadequate and exaggerate the traffic ‘benefits’.   For example:

      • Highways England assumes the Worthing and Lancing scheme as proposed in 2017 is already built, prospectively increasing traffic volumes to and from Arundel and enhancing its benefits at no cost. In fact the scheme is not to be built.  The additional ‘benefits’ at Arundel will therefore be a disbenefit when the extra traffic arrives sooner at Worthing-Lancing.
         
      • UK Parliament has declared the climate and environment emergency.  Analysts have demonstrated that to address this it will be necessary for per capita and total driver mileage to reduce, not increase; transition to electric engines will not sufficiently resolve this.  Highways England’s forecast increased traffic volumes, used to justify building the new road, do not take into account the measures government and Highways England would need to implement to achieve UK government’s climate policy.  If these necessary traffic management measures are implemented, Highways England’s predicted traffic numbers will not arise and the Benefit-Cost Ratio of the grey route, its Value for Money, will vanish. 
         
      • Highways England's traffic increase forecasts fail to reflect the post-Covid increases in home working and home shopping, treating societal behavioural change, although driven by technical change and demographics in addition to Covid, merely as a 'blip' (Jason Hones, Arundel Bypass Project Manager).

      Highways England also exaggerates the Benefit by over-forecasting the volumes of traffic that will divert from other routes on to an improved Arundel A27.  For example:

      • Reducing traffic using the Storrington rat run is one of the seven scheme Objectives. Highways England assumes that any traffic rat running to avoid delays at Arundel and Worthing by travelling from Shoreham to Fontwell via the A259 to the south or the A283 via Storrington to the north will divert back to the A27, if the Grey Route is built at Arundel.   This is questionable.  First, because Highways England does not intend to build the 2017 Worthing Lancing scheme.  Second, because it has no journey time data for the respective journeys. Since stating that its 2017 Worthing Lancing scheme would already not cope fully with the traffic for which it was designed, Highways England has increased its traffic forecast at Arundel by over 35%. This boosts Arundel’s “value for money” calculation, but the chances are all the higher that rat running will continue.
         
      • Highways England chooses to predict that a large amount of traffic which currently uses the A259, would use the A27 through Arundel instead if the Grey route is built.  This ignores that much of this traffic is essential to and created by the economy of the coastal plain areas along the A259.  In reality little of this traffic should be expected to divert to an improved A27, because the businesses shops and homes are predominantly situated along the A259 not the A27.  Highways England show it, unrealistically, as diverting to the A27, in order to construct a financial case for building the Grey Route.

      These things cast doubt on the Highways England traffic forecast for additional traffic that will use the A27.  In doing so they undermine the volume of traffic and journey time benefits that underpin their benefit calculations and value for money.

      And there are more reasons why Highways England's Benefit-Cost Ratio (BCR) range is questionable.

      First, the costs side of the equation is doubted.  The maximum government budget of £250m for the Arundel scheme has already been left far behind.  Between the 2017 and 2019 consultations, Highways England reduced its BCR by 40%, and states that its costs still remain open to significant change. By selecting Grey, it has already chosen the most expensive route. This most expensive route is already set to grow still more:

      • The viaduct issue:  Natural England and others have demanded that a viaduct rather than an embankment should be used to cross the Arun valley floodplain. The additional cost could bring an extra financial burden in the region of £300 million additional to the current upper cost of £455 million.
      • The compensation and mitigation costs issue:  Compensation for Walberton housing is significantly underestimated, with the removal of the site access to 175 houses for which planning consent has already been granted, and other related issues.  In addition to mushrooming property compensation issues, no adequate cost has yet been calculated for mitigation of the impact on the National Park’s tranquillity, wildlife and other special qualities.

      Secondly, on the benefits side, even greater problems abound. In addition to the  over-forecasting of traffic volumes explained above:

      • Highways England cannot explain why the existence of the Worthing Lancing scheme adds significant benefits to Arundel's Grey option BCR, when it claims the scheme makes little traffic volume difference. These added benefits are founded on two dubious hypothetical assumptions - that Worthing Lancing is to be built and that it could cope with the increased traffic volumes above design capacity. Thus assumed benefits are clearly over-counted. It is also not explained why  benefits of any sort from the Worthing scheme should be included on the benefits side of the Arundel scheme BCR but with no balancing cost input.
      • The same is true for the Lyminster Bypass running from the A27 at Arundel to the A259, which is also taken by Highways England to contribute significantly to the Arundel BCR benefits only, without synergy between the schemes being taken into account.

      In summary, both costs and benefits for the Grey option are very much open to question.  Its BCR and value for money are in serious doubt.

      Those who have been pressing Highways England for over a year on all these points, having received no cogent responses, are estimating that its BCR will be nearer 0.5 than 1.0 and outside normal government guidelines.

      The above is an explanation in Highways England’s own terms of why Grey is such poor value for money.  It is worth clarifying why, once it became clear to Highways England that they must seek to avoid building a road within the National Park, they decided to propose the Grey Route, and not the Arundel Alternative.  This is a locally proposed option, supported by local groups and environmental organisations, which avoids any new road-building within the National Park.  It could cost as little as a quarter as much as the Grey Route, resolving congestion issues at much greater value for money. This was excluded by Highways England with reference to traffic volume forecasts and road width specifications for the scheme which were in fact within the discretion of Highways England and the Department for Transport. 

      So it is important to understand the more fundamental reason why the Arundel Alternative has so far been excluded.  As Highways England’s Arundel scheme sponsor Peter Phillips explained it with remarkable frankness to ABNC: Highways England are a road-building company. If a certain level of budget is politically made available to them, they will always aim to design and select a scheme which utilises the whole of that budget.  The salient point is that Highways England are not, in fact, looking for best value for the public.  They are looking for best value for Highways England and their business partners.   

      We should not end this article without making it clear that the root of the ‘value for money’ problem with this road proposal lies even deeper.  What is ‘Value for Money’?  What counts as ‘benefits’ or ‘costs’ when assessing whether the Grey Route provides good ‘value for money’?

      The Department for Transport and Highways England opt to define ‘benefit’ in easily quantifiable financial terms.  They choose what they will monetize to determine benefit-cost ratio and value for money, and what they will not monetize.  So for example “benefit” is accrued through facilitating increases in traffic, not through managing traffic reduction; and “cost” has the cost of building and maintaining the road.  The following, for example, might be seen by the public as determining value, but are not monetized in Highways England's BCR/VfM equations:

      • cost of extra traffic and delays on local roads off the strategic roads network;
      • loss of habitats, biodiversity and species in what Natural England describes as an ‘extraordinary’ area of ‘national importance’;
      • damage to rural built and cultural heritage;
      • fragmentation of village communities and impact on quality of life
      • seeking traffic flow solutions which minimise climate change impacts.

      Taking just the last of these as an example: this article by Emeritus Professor of Transport Policy Phil Goodwin, in TransportXtra 7.8.2020, explains how Highways England adopt a universally dismissive appraisal system for climate change impacts alone, in order to sidestep any need to take account of these costs of their road schemes.

      If a monetary value were to be assigned to even some of these: it is certain that the Grey Route would not be regarded as delivering value for money to the public; whilst the Arundel Alternative would stand out as best value.  Not, of course, best value to a construction company; but, best value to the paying public.

       


      Note:  How the Department for Transport assesses Value for Money

      The value for money case is built initially by comparing forecasts of monetised benefits with those of monetised costs - including construction costs. A benefit to cost ratio (BCR) is produced, and that is then made subject to a judgement on elements that cannot be monetised, this wider measure including expected effects, risks and uncertainty. (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/918479/value-for-money-framework.pdf).

      The wider measure called Value for Money is ranked poor, medium, etc. while the BCR that feeds into it is a number such as 2.0 - a benefit equal to twice the cost; usually the Department for Transport seeks a minimum of BCR 1.5 to be delivered within the value for money judgement.  (https://www.gov.uk/government/publications/percentage-of-dft-s-appraised-project-spending-that-is-assessed-as-good-or-very-good-value-for-money)

      Value for money is considered at a national level, not just the local vicinity, to ensure a net increase in overall public value. For the Arundel Bypass it is Highways England that produces the BCR figures and the value for money judgement using Departmental guidance. (https://www.gov.uk/guidance/transport-analysis-guidance-tag.)

       

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