Value for money evaluation
Why hasn't a value for money evaluation been undertaken?
Due to the gaps in traffic data, we have been unable to conduct a full value for money evaluation. This has resulted in multiple areas of the evaluation being assumed as forecast and we are unable to say whether it is on track to deliver the expected ‘high’ value for money over its 60-year appraisal lifespan.
The only benefit to have been reforecast was safety. Due to data limitations, none of the journey time related benefits were able to be calculated.
The evaluation found the number of personal injury collisions on the project extent had decreased. During the first 60 months the project was operational, there were on average nine personal injury collisions per year, 15 fewer than the average 24 per year over the five years before the project was constructed. This has led to an increase in safety benefits, from £19million to £57million.
Indications from the traffic, safety, and environmental analysis show that the project has had a positive impact on customer journeys and the safety of road users, even though it was not possible to quantify this with a monetary value.
Evaluation of costs
The project was forecast to cost £250 million, with no maintenance or do-minimum costs considered in the appraisal. The outturn construction costs for the project totalled to £398 million, substantially higher than was expected. This increase was driven by a combination of factors, including significant programme delays that extended construction by around 18 months. Additional cost pressures arose from unforeseen archaeological discoveries, more extensive utility diversions than anticipated, contractor disruption following the collapse of Carillion, and remedial works required to address defects identified during construction.
Impacts of COVID-19 and freight journey benefits
Our analysis indicates that changes in travel patterns following the COVID-19 pandemic have delayed traffic growth on many routes. Initial analysis suggests these projects could experience around six additional years of uncongested operation compared with original forecasts. This change in demand may help explain why some projects are currently achieving lower benefits than expected, as congestion-related benefits are realised later than anticipated.
A further important consideration is the value placed on freight journey time savings. Historically, the value of time for freight was undervalued, these have recently been updated to better reflect the economic importance of freight movements. Applying these revised values alters the value benefits of projects. In most cases, earlier appraisals may have understated the economic benefits delivered to freight users.
