The figures that have been used to justify the cost of a major 70mph offline bypass at Arundel, in Highways England's 2013 A27 Arundel Bypass Wider Economic Impact Study, produced by consultants Parsons Brinckerhoff (click here to view), have been scrutinised by Arundel resident Philip Gadsby.
He is not impressed by the report. His commentary on it should worry any taxpayer whose money could be spent on a fully offline 70mph Arundel Bypass with this as justification, rather than on a more proportionate and economically justiable version such as the New Purple Route advocated by the Arundel A27 Forum. Read on, to find out why Philip is so concerned...
Parsons Brinkerhoff (PB) were commissioned to undertake a preliminary assessment of the economic impacts of the A27 Arundel bypass. The final version of this report was issued on 4th March 2013.
PB suggest, on page 9 of the report, that solely building the Arundel Bypass will:
Add £493m to West Sussex’s Gross Value Added (GVA) of £15.257bn[i].
Create 12,600 new jobs in West Sussex[ii].
Increase Income tax receipts by £82m from these new jobs[iii].
Reduce by £38m the amount of Jobseekers allowance paid[iv].
Result in an increase in disposable income throughout Sussex of £108m[v]
Totalling these figures up gives an annual benefit of £721.4m[vi]. The report does say that these figures are not firm.
How was this initial conclusion arrived at?
A series of workshops and an on line survey was conducted in September and October 2012[vii].
The survey gained responses from 330[viii] businesses. The report states that local business related organisations were asked to make their over 15,000[ix] members aware of the survey, thus the response rate was just over 2.1%, over 97% of businesses given the opportunity to participate in the on line survey chose not to, consciously or unconsciously.
PB state that of the 330 firms surveyed, 251[x] of them answered a question on the expected changer in turnover that would directly result from an Arundel By-Pass.
42% (106) expected the By-Pass to not affect their turnover, 35% (88)[xi] expected that an increase in turnover of between 0 and 10%, 19% (48)[xii] firms expected turnover to increase by more than 10%, 9[xiii] firms expected the By-Pass to reduce their turnover. The two larger firms that responded to this part of the survey, those with turnovers above £25m that responded to the survey were the most positive about the effect on their business of the Arundel By-Pass.
PB then convert these results to an increase in turnover in the 251 firms of £41.02[xiv]m.
The increase in turnover of the 251 firms was then grossed up to £493m, which is meant to represent the effect on the whole country. The 12,600 new jobs directly related to the Arundel By Pass, is related to the increase in GVA calculated, this assumes that all the firms that will benefit from the Arundel By-Pass are working at or near 100% efficiency and will have to take on new employees to satisfy the demand generated by the Arundel By-Pass, this seems unlikely as the UK economy’s big problem at the moment is low productivity, implicitly firms should be able to achieve more without taking on staff, so the number of full time jobs and the related reduction in benefits together with the increase in disposable income are particularly optimistic figures.
Validation of the findings
PB referred to the A55 Corridor in North Wales[xv], this is the road between Chester and Holyhead, which is now called the North Wales Expressway, pointing out that many business parks have been developed along the route etc. The North Wales Express Way is a very different type of road to the A27 and the Arundel Bypass. Holyhead is a busy ferry port that handles a lot of freight, commercial and holiday traffic to and from Eire that uses the A55 as a conduit to access the M56 and hence the rest of the UK’s motorway network. The A55 is a trunk route that is used as a trunk route, most studies of traffic on the A27 suggest that it is used for short journeys, the A27 does not provide a link between a major industrial area and a port or other large market, the similarity between the A27 and the A55 are that they both go quite close to a coastline. It is thus difficult to give any weight to the validation attempt.
Messages running through the report
Most of the firms surveyed talked about the need for a whole A27 corridor solution, pointing out that an Arundel Bypass was the easiest of the “problem areas” Chichester, Arundel and Worthing to sort out[xvi].
Many people commented that the reason that they felt that Arundel needed a bypass was the lack of reliability in journey times when you had to use the A27 at Arundel[xvii].
Groups such as the Arundel group ArundelSCATE, whilst objecting to a fully offline A27 Arundel Bypass, have never stated that the present A27 at Arundel, designed in the 1960s with all the choke points that it has, is a fit for purpose road. The road system around Arundel does need improvement, but it is argued that the case for a fully offline long dual carriageway through the countryside has yet to be made, and there are better solutions to achieve greater reliability in journey times through Arundel.
Whilst the recommendations of the Bullen 2004 and Faber Maunsell 2006 reports, to take forward a Purple option as the least environmentally damaging, have not been followed through here, there is some recognition in the report of environmental concerns:-
The Arundel Bypass has been shown to demonstrate several potential benefits in terms of economic activity, safety, accessibility and integration. There are, however, environmental impact factors that will need to be taken into account. In addition, any future evaluation of the scheme will need to take account of changing traffic patterns, accident statistics and other factors that have changed since the original appraisals were undertaken. The environmental disbenefits of the scheme will now include an impact on the recently created South Downs National Park, so any future proposals will need to look at how any negative impacts associated with this can be minimised or mitigated.
Followed by a paragraph that seems to suggest that the road should be a PFI, now obviously not the case.
Given current pressures on Government funding, the high cost-benefit ratio(s) demonstrated in appraisals undertaken in previous years will not necessarily be sufficient to secure funding for the scheme. Any future appraisal should include consideration of additional and potentially innovative funding sources to reduce the total cost of the scheme to central Government.
It is worrying to think that this report has been given any validity, it compares the Arundel By-Pass with a major trunk through route and seems to suggest that all the benefits of an improved A27 come from the Arundel By-Pass. Unless they are suggesting that improvements to Chichester and Worthing and the rest of the A27 corridor will produce even more benefits, that would seem to be just pure Keynesian economics.
It is particularly frightening to realise that over 83% of the prospective economic benefit to Sussex is a result of two companies saying that their turnover might go up between 0% and 10%. One of these companies has a turnover of over £500m and the other a turnover between £25m and £500m. 5% of £500m is £25m and 5% of the midpoint between £25m and £500m is £13.125m, £38.125 is 82.68% of the reported £46.11m.
[i] Paragraph 8.1.2
[ii] Paragraph 8.1.2
[iii] Paragraph 8.1.2
[iv] Paragraph 8.1.2
[v] Paragraph 8.1.2
[vi] Paragraph 8.1.3
[vii] Paragraph 7.1.1
[viii] Paragraph 7.1.1
[ix] Table 11 Paragraph 6.4.7
[x] Paragraph 7.5.1
[xi] Figure 13 Paragraph 7.5.1
[xii] Figure 13 Paragraph 7.5.1
[xiii] Figure 13 Paragraph 7.5.1
[xiv] Paragraph 7.6.3
[xv] Paragraph 5.10.2
[xvi] Paragraph 7.11.4
[xvii] Paragraph 7.12.3