Car useEconomics

The recent publication of the Full Business Case (FBC) for the A428 Black Cat to Caxton Gibbet Improvements Scheme highlights the policy inconsistencies and misleading supporting analysis that typify road investments. We have the Introduction by the Roads Minister explaining that A428 has long been seen an important section of the strategic road network that required upgrade due to its problems of congestion, poor journey time reliability and resilience, and how accordingly the Scheme will enhance journey times, support local and regional economic growth, create jobs, and improve employment and the environment.

To justify these high level objectives, the 270 page FBC grinds through all possible aspects of the case for constructing ten miles of dual carriageway. This is impressive in its way, but is the effort ‘proportionate’, to use a favourite DfT term, I wonder? Perhaps the intent is to ensure the proposal is crash-proof in the event of any further legal challenge; or perhaps to deter potential challengers from initiating such challenge. Then again, the economics of the investment look pretty marginal, based on opaque reported analysis, so perhaps extensive quantity is seen as a counterbalance to thin quality in making the case for the Scheme.

Journey time savings for all classes of vehicles, of £633m, are claimed as the main benefit, as is usual (although in 2010 prices discounted to 2010, implying some antiquity to the modelling). But this is not split between business users (cars and road freight) and non-business (commuters and others), as must have been modelled, since each class has a different value of time. In other cases I have examined, the split between business and non-business has been shown, with time savings to non-business users almost entirely offset by increased vehicle operating costs, the result of local users diverting to take advantage of faster travel provided by the improved route. The economic case for a scheme depends on the scale of such diversion, since local users pre-empt capacity intended for longer distance business users. This failure to split the journey time savings looks like intentional obfuscation.

The time saving benefits are in any case offset by quite substantial carbon disbenefits worth -£182m. My impression is these are much more than in previous road schemes, reflecting updated carbon values promulgated by the former Department of Business, Energy and Industrial Strategy. So no longer are increased carbon emissions dismissed as de minimis, at least in economic terms. Nevertheless, if, as I expect, the long run benefits of the scheme mainly take the form of enhanced access, rather than time savings, the increased vehicle-miles-travelled (known as ‘induced traffic’), would increase externalities. So carbon disbenefits are likely to have been underestimated.

Whatever the magnitude, new road capacity must generate more carbon emissions. What needs to be spelled out is the total increase in carbon from the whole road investment programme, to see to what extent this impedes delivery of transport’s contribution to Net Zero. Regrettably, the new 114 page National Networks National Policy Statement, recently published, fails to prescribe programme level estimation of carbon emissions. If neither at programme level nor at scheme level, where is this significant and unwanted damaging impact to lie?

While the cost data in the FBC are redacted, presumably to protect National Highways position in other road scheme projects out to tender, the initial benefit-cost ratio (BCR) is estimated as 0.92. To make the investment at all viable, ‘wider impacts’ of £282m have been adduced to yield an adjusted BCR of 1.63. This scale of wider impacts seems very high for a non-urban scheme, based as it is on an elaborate, yet in reality, not much more than a back-of-the-envelope calculation. It may be that it is this tenuous boost to benefits, to put the Scheme in the DfT’s medium VfM category, that has necessitated the supporting assessment and sign off by the two accounting officers, the DfT permanent secretary and National Highway’s chief executive.

For my part, I suspect that optimism bias is at work to generate even an initial BCR of 0.92, requiring yet more optimism to get to 1.63. So I would not regard the figures in the FBC as robust, even though the analysis is presented as exceptionally extensive. Yet I have some sympathy for the highways engineers at National Highways, who see this scheme as necessary to create continuous dual carriageway between the M1 at Milton Keynes and the M11 at Cambridge, with onward travel to the ports of Felixstowe and Harwich. A stretch of single carriageway in what is otherwise a dual carriageway route is, to them, offensive. Naturally they seek to add capacity to reduce congestion and achieve a free-flowing network. This approach would also seem logical and persuasive to most local politicians and business leaders not versed in the principles of transport planning and the observed road user responses to additional capacity provision, let alone the minutiae of scheme appraisal and Benefit Cost Ratio calculation.

However, congestion on roads in well-populated parts of the country typically displays morning and evening peaks, indicating use by commuters, who have choices of route. Travel patterns are not fixed and are certainly influenced by network changes. So new free-flowing routes tend to attract additional traffic, whether by diversion in the short run to achieve the saving of journey time, or in the longer run through permitting longer trips within the travel time available. Both of these are beneficial but are not the benefits conventionally modelled, nor are they allocated to the categories of traffic that underpin the original justification for the scheme. Generally, where commuters and longer distance business users share road space, free flow is difficult to achieve, particularly at peak hours.

There is a gulf between the simplistic but erroneous headline justification for this and similar road investments, and the complex, opaque and misleading quantified supporting analysis. It would be good to find a common language to bridge this gap, based on a behaviourally realistic account of what is going on, what options there are to improve matters, and what is most likely to happen in practice if changes are made. Applying the concept of Heuristics is one possible solution.

Heuristics are simple rules – rules-of-thumb – for making decisions, coming to judgement, solving problems or shaping intuitions, that work well enough in most circumstances. I want to suggest that transport planners and practitioners would benefit from relatively simple heuristics in offering advice to decision makers about addressing perceived issues of system inadequacy and the justification for providing additional capacity in a range of circumstances.

This would mean distilling the evidence from research by academics and others to yield rules-of-thumb that are intuitively credible to both practitioners and decision-makers. One problem is that research findings are often based on case studies, specific to place and time, and are path-dependent, so generalisation may be difficult. Besides, the research literature in the area of transport studies has burgeoned in recent years, not necessarily to overall professional benefit, in part the consequence of the proliferation of open access journals that charge researchers for the cost of publication, rather than rely on library subscriptions; this creates an incentive for the journal to downplay rigorous peer review and editorial oversight in the interest of increasing income, and the consequence is a proliferation of case studies that may gain academic credit but are of limited general applicability.

Moreover, the research literature may overlook the authoritative information available in official publications, including statistical series, as well as in the unofficial ‘grey literature’ publications from think-tanks and others. Hence formal reviews of the ‘research literature’ may therefore be both unwieldy and incomplete, making it hard to see the wood for the trees and so difficult to draw useful conclusions. Government departments accordingly now seem often to commission ‘rapid evidence reviews’, which give consideration to a manageable number of selected papers to save time and effort, but selection may be biased, consciously or otherwise, to support the expectations of the commissioning department, and the most important recently revealed insight and understanding may not yet be included.

In these circumstances, I believe helpful Heuristics would need to be based on a deep and wide knowledge of both publications, practice and observed data, to establish a cogent and concise framework for analysis and decisions, in accessible language, not set in stone but subject to review in the light of new evidence and experience.

One area where rules-of-thumb may be particularly useful for transport planners and decision makers is in the tackling of road traffic congestion, central to the contemporary travel experience and to transport investment, such as the A428 Scheme, but for which repeated interventions have demonstrated little impact in practice. To the extent that relief may be achieved, this is more short term than long term. Yet huge amounts of public expenditure are justified by the objective of relieving congestion and boosting connectivity, with little evidence of success at outturn.

So, let me suggest some rules-of-thumb for thinking about road traffic congestion. I will not cite chapter and verse of the evidence in support, for which see my recent book.

  • Congestion arises in or near areas of high population density where car ownership is also high. More car trips might seek to be made at times of peak demand than the road network can accommodate. Delays ensue, which motivate some road users to make other choices, including adopting alternative routes or times of departures, alternative modes of travel where available, different destinations where there are choices (such as for shopping trips), or not to travel at all (such as ordering good online). Congestion therefore is generally self-regulating in that if demand increases, delays increase and more potential trips are suppressed. Daily gridlock or long tailbacks are uncommon and arise where there are unanticipated obstructions to movement.
  • Increasing road capacity has the effect reducing delays in the short term, but thereafter attracting previously diverted and suppressed trips, as well as permitting new and longer trips, consistent with the maxim that we can’t build our way out of congestion, known from experience to be generally true. The result is additional traffic, known as ‘induced traffic’, which in the short term is the consequences of diversion of commuters and other local users on to the new capacity to save time; and, in the longer term, of road users taking advantage of faster travel to make longer trips to increase access to desired destinations, as well as changing trip origins by moving homes.
  • Interventions that reduce vehicle use initially reduce delays, but this attracts back onto the network previously suppressed trips, thus restoring congestion to what it had been. Interventions conceived as intended to reduce vehicle road use include the promotion of active travel and public transport, congestion charging and road pricing, and consolidation of freight deliveries into fewer goods vehicles.
  • Reduction in urban carriageway available to general traffic can make more space available for bus lanes, cyclists and pedestrians. This initially can increase congestion delays, which leads to drivers making alternative choices. In the longer term the intensity of congestion is difficult to reduce, but the absolute amount of congested traffic would be lessened and could be better managed to benefit the whole population.
  • Induced traffic results in more vehicle operating costs and in additional externalities, including carbon and air pollutant emissions, which public policy is seeking to reduce.
  • The orthodox economic case for road investment relies mainly on the saving of travel time. Yet the evidence is that average travel time is a long term invariant, implying that people take the benefit of faster travel in the form of improved access – to people, places, employment, services and activities, with ensuing enhanced opportunities and choices.
  • Transport models that project travel times savings, comparing the with- and without investment cases, do not reflect the reality that improved access is actually the main beneficial outcome. Access is subject to diminishing returns, implying declining returns to road investment as the road network matures.
  • The car is very popular for its utility in door-to-door travel over short to medium distances, as well as over longer distances when alternatives are less attractive, provided  congestion delays are acceptable and parking is available at both ends of the journey. These conditions may not apply in city centres, where public transport, particularly rail-based in all its forms, provides a speedy and reliable alternative to cars and buses on congested roads. But beyond city centres, in suburbs, towns and rural areas, the popularity of the car as a mode of travel against available alternatives is difficult to challenge.
  • Promotion of active travel has limited impact on car use. The evidence is that improved cycling facilities mainly attracts people from buses, which reduces farebox income and leads to reduced service levels or a requirement for more subsidy. It is difficult to be pro-active to successfully increase walking, which is the slowest mode of travel, permitting the least access to desired destinations for most people.
  • The built environment, within which are located nearly all the homes, facilities and services that are trip origins and destinations, is largely a given, with limited opportunity to increase density through brownfield or infill development. Creation of new communities on greenfield sites with choice of travel modes has proved difficult. Accordingly, there is limited scope for the creation ’15-minute cities’, an aspiration of many urban planners, aimed at reducing car use, congestion, pollution and carbon emissions.
  • As well as being popular for getting from A to B, for many people ownership of a car is attractive for a variety of lifestyle reasons. The fact that cars are generally parked for 95% of the time is a seemingly persuasive economic argument for car sharing in its various forms. But conversely, the desire to own a resource that is so little used is an indication of the value attached to ownership and convenience. This is in part why it proves difficult to shift car owners to other modes. Cars parked at the kerbside reduce carriageway available for vehicles on the move, contributing to congestion delays and deterring some road users.
  • The wide use of digital navigation (known in the roads context as satnav) has the effect of redistributing traffic. Commuters and other local users divert from existing routes to new capacity on major roads, to save time, pre-empting capacity intended for longer distance business users, including freight, so detracting from the projected economic benefits of the new capacity. In addition, traffic diverts from congested major roads to minor roads that offer a less congested alternative route, such minor roads previously used only by those with local knowledge, making them ‘rat runs’ less suited for active travel and detracting from quiet residential environments.
  • The most advanced forms of digital navigation predict journey times, so reducing uncertainty about time of arrival, which is what bothers road users most about the impact of congestion. Digital navigation is thus arguably the best means available for mitigating the perceived impact of road traffic congestion, as well as being vastly cheaper than providing new road capacity.

These rules-of-thumb about observed realities are proposed as ‘good enough’ ways of recognising and addressing the problem of congestion that we face on road networks and identifying effect means of mitigation. I suggest three questions to structure shared thinking about this and the other problems we face, amongst transport planners, politicians, other decision makes and influencers:

Q1 What’s going on here?

Q2 What options do we have to do better, that are both cost-effective and affordable?

Q3 What choices to make?

Responding to the first two questions is the task of analysts, including transport planners, economists and policy advisers, approaching problems with an open mind. Responding to the third question, with the benefits of the answers to the first two, is the task of decision makers in the public and private sectors, as well as advocates of all kinds. Better decisions would be made if those involved are clear about their roles, tasks and expectations. Heuristics, of the kind outlined above, could help them acquire good intuitions of the cost-effective options available, and give others greater insight into the basis on which decisions are made.

Nevertheless, some may argue that such heuristics serve to over-simplify what is bound to be a complex analysis of what’s going on. Albert Einstein said: ‘Make things as simple as possible, but no simpler’. Are these heuristics for understanding and reacting to congestion good enough or are they too simple? Do we still need the full panoply of the Department for Transport’s Transport Analysis Guidance to present to a small coterie of people a theoretical analysis based on problematic behavioural assumptions as to what should be done? Or, as some may believe, to justify, through virtually impossible to decipher analytical complexity (as represented by the likes of A428 business case), someone’s original hunch, then bought into tenaciously by the scheme’s promoting bodies. My own view is that narrative and dialogue based on heuristics would offer an alternative approach, well worth trying, to answer the three questions above in a generally understandable way.

This blog was the basis of an article in Local Transport Today of 21 March 2024.

Travel

Behaviour change is a topic of continuing interest to transport professionals, with current focus on getting people out of their cars, to use instead public transport, walking or cycling. The main policy motivations are to reduce the harmful consequences of car use, in particular tailpipe carbon emissions and air pollutants, as well as to reduce road traffic congestion, enhance the sense of urban place, increase healthy exercise and improve the economic viability of public transport. This was the topic of contributions to a recent Transport Thinking Forum Round Table discussion on achieving behavioural change, organised in association with the TAPAS network. Here I offer some further reflections on the interesting contributions and on the practical possibilities.

A common approach to effecting behaviour change is conceptualised by the simple idea of ‘sticks and carrots’ – punishments for undesirable behaviour and rewards for better behaviour, judged against policy objectives. However, this was criticised as an unhelpful metaphor by Pete Dyson, a behavioural scientist who has worked at the Department for Transport, now at the University of Bath. He regards the concept as too simplistic and also problematic because the ‘stick’ element prompts pushback from those who see themselves as adversely affected, as well as from the politicians who aim to represent them, car users in particular (see also the book he co-authored with Rory Sutherland: Transport for Humans – Are we nearly there yet?).

As alternatives to sticks and carrots, there are other concepts available including: Avoid-Shift-Improve, a general approach to environmental sustainability; the Upstream-Downstream model of behavioural change developed by the Behavioural Insights Team; and the COM-B model developed at UCL, which posits that behavioural change can only come about if there are in place all three elements of Capability, Opportunity and Motivation. The COM-B approach has been widely used in the public health context, for instance to encourage smoking cessation, and is one of a number of techniques that have been applied with success to improving road safety. The Scottish Government has stated that it has considered interventions to reduce car use in the context of the COM‐B model, although no detail has been provided.

Reducing smoking and improving road safety are generally seen as desirable objectives, so behavioural change interventions go with the grain of public opinion. But the objectives of reducing car ownership and use are very different, given that three-quarters of households in Britain own cars, which are seen both as useful for their utility in getting from A to B, as well as engendering good feelings associated with ownership (see my paper about Car Dependence). The M of COM-B is therefore largely lacking, so attempting to reduce car use by measures based on behavioural insights alone would be pushing uphill. On the other hand, interventions to foster electric vehicle purchase could be effective since the Capability to drive is as for internal combustion engine vehicles, there is Opportunity to purchase EVs, albeit only a limited used car market at present, and Motivation takes the form of lower operating costs and environmental virtue.

Measure to promote EV uptake, such as investment in public charging  points, can be seen as examples of the well-known approach known as ‘nudging’, a concept from behavioural economics that proposes adaptive designs of the decision environment as ways to influence the behaviour and decision-making of groups or individuals. Nudging is not a stick, in that compliance with the intention of the nudge is optional, nor is it straightforwardly a carrot in that the benefits of compliance may not always be self-evident. Richard Thaler, Nobel laureate in economics and a populariser of the concept, has cited satnav technology as an example: you decide where you want to go, the app offers possible routes, and you are free to decline the advice if you decide to take a detour. While this is a neat example, its ambition is quite limited. Nudging people to make significantly less use of cars by means of such ‘soft’ measures would seem likely to have only small impact, in the absence of complementary ‘hard’ unavoidable interventions.

One challenge to the usual view of behaviour change in the transport sector was put by Tom Cohen of the University of Westminster, at the TAPAS meeting, who argued that the overwhelming majority of interventions can be expected to lead to changes in behaviour, so that ‘behaviour change’ is simply the right way of doing transport planning, and not a subset of interventions such as those based on marketing or by appealing to our better nature. In short: transport is movement; movement is behaviour; so transport planning is travel behaviour planning. The implication is that we should look to packages of complementary interventions, of the kind envisaged by transport planners, to achieve behaviour change.

Also at the TAPAS meeting, Lisa Martin, of consultancy Steer, reviewed UK experience of packages of interventions aimed at changing travel behaviour, including those supported by the Sustainable Travel Towns demonstration projects and the Local Sustainable Travel Fund. Evaluation indicated that while high value for money could be obtained, as judged by the benefit-cost ratio, yet the impact on car use and/or traffic levels was quite small, of the order of 2%. This has not been sufficient to ensure that such packages are in the mainstream of approaches to transport decarbonisation, where typical aspirations of local and regional authorities are to achieve 20% reductions in car use by as early as 2030. Moreover, the ‘cost’ represented in the benefit-cost ratio is the economic cost. What is disregarded is the political cost that may be experienced by politicians, local and national, in advocating measures that engender pushback from those who feel they would be adversely affected, drivers and others.

There is certainly merit taking a broad view to identify packages of measures that might persuade, enforce or nudge travel behaviour change in directions helpful to wider policy purposes. Yet in practice much of the debate in the transport sector is about the consequences of investment in new road and rail capacity, the behavioural consequences of which tend to be multifaceted, yet which is supported by analysis and modelling that narrowly focuses on estimates of economic benefits that make simplifying assumptions about changes in travel behaviour. There are opportunities for behavioural scientists to question these simplifying assumptions, in particular that the main benefit of investment that results in faster travel is the saving of travel time that is used for more work or leisure activities. On the contrary, there is much evidence that, over timescales relevant for investment appraisal, the main benefits take the form of enhanced access – to people and places, family and friends, employment, services and activities, with ensuing increases in opportunities and choices. The travel-time-saving simplification is computationally convenient but does not capture the real behaviour of users. This means that conventional transport models whose outputs are traffic speeds and volumes, comparing with- and with-out investment cases, are behaviourally misleading. Models that project changes in access would be a better basis for investment decisions, as behavioural analysis would reveal.

Nevertheless, given that the conventional methodology for investment appraisal is so well established, a consequence is a search for approaches to effecting behavioural changes that can be pursued outside this orthodoxy, hence the continued popularity of ‘sticks and carrots’ as well as interest in alternative approaches that avoid direct confrontation with the economists.

The general problem we face is that the system of travel/transport is particularly complex, has evolved over time in parallel with our built environment, and where remedies to problems tend to be specific to particular locations. This makes it difficult to gain a sufficiently deep understanding of what is going on and what options are likely to succeed in ameliorating detrimental aspects and/or enhancing positive features. Einstein said: ‘Everything should be made as simple as possible, but not simpler’. While perhaps more straightforwardly relevant for physical systems, this maxim begs the question of how simple descriptions of complex systems can be before the charge of oversimplification could be legitimately laid. My own view is that there is scope for simplification through the application of heuristics – rules of thumb, mental shortcuts – that are good enough accounts of what’s going on and what our options are, and that will promote common understanding – a topic on which I will write at greater length on a future occasion.

In the end, the test is ‘what works’ – the observed outcome in the real world of behavioural interventions. Reasonably clear outcomes may be observable in the case of sticks, such as adjustments to taxation, implementation of changes in road layouts or of charging schemes aimed at reducing vehicle emissions or traffic congestion. Similarly, the impact of carrots in the form of cash incentives can often be measured. But more nuanced interventions such as nudges may be harder to document.

Outcomes of behavioural interventions may be observed from experience in other countries. Yet local conditions and behavioural responses may be significantly different from those in the UK. For instance, Paris was one of the first cities to allow rental electric scooters, but then was one of the first to ban them on grounds of safety, following a referendum. But that is not to say that other cities would follow the example of Paris. Nevertheless, the idea of trialling an intervention for a defined period and then having a vote may be a practical way of testing public acceptability. Stockholm’s congestion charge was trialled for a seven-month period, then turned off prior to a referendum, the outcome of which led to permanent implementation.

The substantial scope for travel behaviour change was illustrated by the coronavirus pandemic, which had a major impact on travel behaviour largely through unavoidable constraints imposed by governments, an example of a big stick, deployable in extraordinary times. But once these constrains were removed, people reverted largely to their previous travel behaviour, which reflected prior choices about where they lived in relation to where they worked, to where family and friends lived, where their children were educated, as well as activities and services they had become accustomed to access. Such reversion implies that large changes in travel behaviour could not realistically be delivered in a democratic society in normal times.

While there is undoubted scope for the application of behavioural science to investigate how travel behaviour might usefully be changed incrementally, in practice on/off trials plus referenda might provide both a practical test of acceptability as well as a justification for initiatives by sufficiently bold politicians. And after a decision to implement permanently, evaluation on short-, medium- and longer-term timescales would help inform subsequent decisions.

Yet when contemplating the possibilities for travel behaviour change, we should not fail to recognise that the car has provided valued access benefits to a majority of households, notwithstanding its problems. Persuading people to use their cars less would therefore require provision of alternative modes that feel to them at least as good, reinforced by effective, probably incremental constraints on car use. Whether we use the shorthand of ‘carrots and sticks’ to describe such complementary measures is less important than finding the funding to invest in attractive alternatives to the car, particularly rail-based travel in urban areas where the economic viability of public transport is most feasible. In the absence of good alternatives, getting people out of their cars would be difficult, regardless of the sophistication of our behavioural analysis.

 
 







					

		
		

	




			
				



		
			
						

		
	

	
		

										

					Car useTravel				

						
		

		
				
		

			

The coronavirus pandemic caused major dislocation in society, not least to the amount and modes of travel, with many similarities across countries, albeit differing in detail depending on local constraints imposed on work and travel. This amounted to a ‘natural experiment’ in that an exogenous event led to large changes in travel behaviour over a two-year period, 2020-2021, before the cause faded away and normal life largely resumed, yet with some possible permanent long-term consequences. The findings of the National Travel Survey for 2022 are ambiguous as to whether we are on the path to pre-pandemic normality, or whether some permanent changes have arisen. Transport for London has recently published its annual Travel in London report for 2023 that includes relevant data for the capital. So it is worth considering the evidence for pointers to the future.





The pandemic led to two main changes in how we live and in the related demand for travel: more working from home and more shopping online.





Working from home





While some of those who do not need face-to-face contact with customers, clients or colleagues have always worked from home, the pandemic resulted in a step-change in the numbers adopting this practice. In some cases, this was a sub-optimal response to an emergency, for instance in the education sector. In other cases, this reflected advantages of not travelling to a workplace for at least part of the week, avoiding both the time and discomfort of commuting, flexibility of when to work, and perhaps benefiting from the avoidance of interruptions in the privacy of the home environment.  





For some organisations, it has been found that the workplace office could be dispensed with entirely. For many others, some form of hybrid working has emerged, with employees spending part of the week in the office, although the long-term stability of this outcome is yet to be seen. The extent of hybrid working reflects a balance between the preference of many employees for working at home and the preference of many of their managers for having people in the office – for oversight, to stimulate creative interactions and to induct new staff into the culture and practices of the organisation. This balance is affected by the state of the employment market – the demand and supply of employees with appropriate skills. The market was tight following the pandemic, with low levels of unemployment as many older workers decided not to return. But over time, this balance could shift, particularly if the benefits of agglomeration are as significant as had previously been supposed, so that businesses that have more staff on site prove to be more successful and profitable. On the other hand, businesses that commit to hybrid working may be able to attract staff from a wider area, as well as reducing the expense of maintaining office space for the full complement of staff.





Surveys by the Office for National Statistics of working adults in Britain found that while 50% reported working from home at some point in the previous seven days in the first half of 2020, early in the pandemic, this had fallen to 40% in early 2023; throughout 2022, when the restrictions of the pandemic had been lifted, the percentage of working adults reporting having worked from home varied between 25% and 40%, without a clear upward or downward trend, indicating that homeworking was resilient to the end of travel restrictions. Professionals and those in higher income bands were more likely to work from home, whereas those who require face to face contact with clients or personal engagement with facilities resumed travelling to their workplace – in education, healthcare, hospitality, retail, manufacturing and laboratories.





The emergence of a new normal involving both fully remote and hybrid working raises a question about the value of agglomeration benefits from learning, sharing, and matching in city centres. Estimation of the economic value of agglomeration has been based on econometric analysis addressing the change in productivity in relation to the change in effective economic density, with the biggest benefits accruing to knowledge-focussed businesses, despite remote or hybrid working being most feasible for such businesses. The observed movement of businesses to central locations in recent decades reflects net agglomeration benefits, the positive benefits being offset by the negative, the balance being affected by technological developments. But this may be changing.





Fleet Street, for instance, was once the physical location of the national newspapers in central London, with printing presses in the basements, print workers on floors above and editorial staff on the upper floors. This was a classic cluster, with benefits from shared facilities and staff, allowing news to travel faster and gossip to flourish. But there were offsetting disbenefits: newsprint had to be brought into central London, from where newspapers were distributed across the country overnight, and there were restrictive labour practices reflecting trade union power when the product had to be made anew each day. But then the advent of digital typesetting allowed newspapers to be printed at remote printworks with better access to transport networks, so that the editorial offices could disperse to scattered locations around London. Nowadays, ‘Fleet Steet’ is a metaphor for the newspaper industry, no longer the actual location. With hindsight, the agglomeration benefits and disbenefits were more finely balanced than had been supposed, so that new technology could tilt the balance in favour of dispersion of the cluster.





A question, then, is whether something similar may be happening more generally to knowledge-based businesses that had been benefiting from clustering in city centres. It has long been suggested that modern information and telecommunications would lead to the ‘death of distance’, yet the benefits of agglomeration seemed to trump those associated with dispersal. But then the shock of the pandemic both enforced working from home where possible and brought forward technologies to facilitate online meetings and collaboration based on broadband telecommunications that had steadily been improving. The disbenefits of agglomeration to employees in the form of the time, cost and discomfort of commuting became immediately apparent, with a consequential reluctance to return full time to the workplace. The balance of benefits and disbenefits may have shifted in favour of dispersal, although it may take time to reach a settled outcome.





For employers, increased working from home could lead to a decrease in demand for office space in the centres of cities, although this would depend on how workspace is managed to accommodate staff who are there for only part of the week. Shrinkage of space to save rental costs could make the office a less attractive destination. High quality premises with good facilities within and nearby would be preferred, to attract high quality staff. Older, lower quality buildings are becoming redundant, particularly on account of regulatory requirements to improve the energy efficiency of rented buildings. This presents opportunities to repurpose such redundant workplaces, as has long been the case by creating loft apartments from historic warehouses. The scope for repurposing more recent office accommodation can be limited by the depth of floor plan, since windows would be expected by residents of flats, and by the core location of services. Creation of laboratory space, hotels and student accommodation are being considered. Perhaps the simplest repurposing would be a reversion to residential use of inner city eighteenth and nineteenth century houses built for families with servants but subsequently converted to offices. Such repurposing would fit the concept of the 15-minute city or 20-minute neighbourhood where most needs can be met by active travel within a short distance. However, with many tenants and landlords bound by long term leases, it will take time for the extent of the full changes to occupancy to emerge





While reduced use of public transport for commuting means less crowding at peak times, it also results in less revenue for the operators and so either more subsidy is required, or the outcome is poorer service and/or higher fares. This raise the question of the role of bus and rail travel in sustaining the economic and social vibrancy of towns and cities, particularly those whose density is such the general use of the car is not viable. The scope for raising fares is limited by use made by those who cannot afford a car, which means that some external source of funding support is required. Support from government was increased substantially during the pandemic as an emergency measure, but the longer-term position remains to be seen. Transport for London (TfL) has been more dependent on operating income from passenger revenue than other major cities, hence it was hit harder by the loss of fare income during the pandemic so that tortuous negotiations with central government were required to avoid serious loss of services. The case for increased external subsidy to sustain high quality public transport fits well with the need to decarbonise the transport sector by offering alternatives to car use, given that internal combustion engine vehicles will be dominant for some years to come.





It is possible that the time saved by commuting less will be used for other travel, given the long run invariant hour a day of average travel time. If this other travel is local active travel, cycling or walking, that would be helpful for reducing the environmental impact; if by car, less so, particularly if commuting had been by public transport. Working from home also allows living more remotely from the workplace if travel to work is less frequent; this leads to changes in residential property prices as between urban and rural locations, and new construction where land with planning consent is available for development, with consequential changes for travel behaviour, particularly increased car use.





Online shopping





The other shift prompted by the pandemic was to online retail, growth of which was accentuated markedly. Yet shopping is also a social activity, and the suitability of many goods are best judged first hand, whether the feel and look of fashion items or the bulk of furnishings. Data for internet sales as a proportion of total retail sales had been on a steadily increasing trend before the pandemic, rising from around 3% in 2007 to 19% immediately before the pandemic. It spiked to reach 38% in early 2021 before falling back to 25% in mid-2022, broadly returning to trend, although for how long the upward trend will continue is as yet unclear.





The main impact of this shift to online shopping has been to reduce the attractiveness of city centre department stores, some chains of which have closed entirely while others have shut some branches and repurposed floor space in continuing locations. Stronger city centres that relied on a wide catchment area were most affected by the pandemic, while highstreets in economically weaker cities and towns were less affected, although many were already experiencing difficulty in attracting shoppers and shops on account both of general economic conditions in towns that had lost major industries and the shift to online retail. Over time, rents will adjust to a lower demand for retail floor space, either allowing new entrants or repurposing for other uses.





Implications for travel demand





Department for Transport monitoring data showed that, by April 2022, motor vehicle use nationally had returned to just over 100% of pre-pandemic levels. Public transport use grew back at slower rates and some components have tended to remain below pre-pandemic levels: by late 2023, national rail use was 85% of that observed in the same period in 2019, London Underground use a little higher, and bus use was about 90%, although there have been significant fluctuations due to school holidays, weather events, tourist flows and industrial action. Use of the Underground to central destinations bounced back more quickly at weekends than in the week.





There was a burst of recreational cycling during the first lockdown, reaching a peak of 63% above a 2013 baseline in mid-2021, falling back to a 24% increase above 2013 in late 2022, consistent with a modest rate of long-term growth. Although there were many adaptations to urban roads at the outset of the pandemic to facilitate cycling as an alternative to crowded public transport, the ultimate impact of this will not be clear until the extent of return to the office becomes evident.





The findings for 2022 as a whole, from the National Travel Survey, show only partial return to pre-pandemic levels, which may reflect the emergence of the Omicron variant in late 2021, even though travel restrictions were lifted by February 2022. Thus, average travel time prior to the pandemic was close to 60 minutes a day; during 2020 and 2021 it fell to about 45 minutes, but rose in 2022 to 53 minutes. It would not be surprising if average travel time returned to an hour a day in 2023, although it remains too early to rule out some longer term change in travel behaviour, for instance from increased working from home. Thus, the average number of commuting trips in 2022 was 85% of that in 2019, whereas the average number of education trips (including escorting) was 94% of the earlier year, indicating the greater opportunity for working from home in contrast to studying at home. Average car mileage in 2022 was 89% of that in 2019.





Data published by Transport for London provide a more granular account of the position as of late 2023 (see Figure). Overall public transport demand reached 90% of the pre-pandemic baseline. There has been a consolidation of weekday travel on Tuesdays to Thursdays, where demand is typically higher than on Mondays and Fridays (particularly on rail modes), although only 26 per cent of all London residents have the option to work from home, reflecting a ‘blue collar’ versus ‘white collar’ difference. There is also more travel on weekends than on some weekdays, and slightly longer average journey lengths, all of which appear to be becoming established features of post-pandemic demand.





Conclusions





A key question is whether the travel changes triggered by the pandemic will have long term impacts that will help achieve transport decarbonisation. The evidence is that car use rebounded towards pre-pandemic levels faster than public transport use, where full recovery has yet to occur, and may not do so if working from home persists as an alternative to the full week in the workplace. Active travel at best shows a slow growth trend.





The pandemic has shown that we could make major changes to lifestyle and travel behaviour under the impetus of concerns about personal health. Coming out of the pandemic, some analysts saw indications of a long-term shift to travelling less, notably those working from home making less use of the car. It is possible that working from home will prove to be a long term feature for those for whom it is practicable and where employers are amenable, resulting in more agreeable and less crowded and congested commuting. Yet this leaves open whether and how the saving in commuting time might be used, whether for nontravel activities or for other kinds of journey purpose, and by what mode.





The full impact of the pandemic on travel behaviour therefore remains to be seen, yet the emerging evidence suggests that we largely reverted to pre-pandemic travel behaviour, particularly by car, once the threat to health had receded. The impetus of the climate emergency is less immediately pressing, and so we persist in travel behaviour that meets our needs for access to people, places, activities and services, with the opportunities that ensue, hoping that advances in technology would avoid having to make hard choices about travelling less. Those seeking substantial reductions in car use to mitigate climate change can take but little comfort from the pandemic experience.





This blog was the basis for an article in Local Transport Today 23 January 2024.


					

		
		

	




			
				



		
			
						

		
	

	
		

										

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The National Infrastructure Commission published its Second National Infrastructure Assessment on 18 October. The Commission’s objectives, set by the Government when it was established in 2015, are to support sustainable economic growth across all regions of the UK, improve competitiveness, improve quality of life, support climate resilience and transition to net zero carbon emissions by 2050, all within a specified long-term funding envelope for its recommendations.





The NIC’s remit is to issue a comprehensive analysis of the UK’s infrastructure requirements once every five years. This covers all economic infrastructure sectors, setting out recommendations for transport, energy, water and wastewater, flood resilience, digital connectivity and solid waste. The Assessment takes a 30-year view of the infrastructure needs within UK government competence and identifies the policies and funding to meet them.





First, I will look at some of the key conclusions and recommendations concerning transport from the NIC’s analysis, which should be fairly uncontentious, at least for transport planners and practitioners:





  • The public transport networks of England’s largest cities under-perform relative to comparable European cities. Initial priorities for investment should be in Birmingham, Bristol, Leeds and Manchester and their wider city regions, to prevent growth being constrained. The scale of capacity increases required justifies investment in rail- or tram-based projects. The government should make financial support conditional on cities committing to introduce demand management measures to reduce car journeys in city centres, and cities should provide a contribution of at least 15-25% to the funding of large projects, whether from fiscal devolution or transport user charging.





  • Transport budgets should be devolved to all local authorities responsible for strategic transport so that all places are able to maintain existing infrastructure – for example improving the condition of road surfaces – and invest for local growth. This will also help places develop locally led infrastructure strategies through which transport investment can be considered against long term goals and planned alongside housing and land use development.





  • For the national road and rail networks, the government’s first priority should be to maintain existing networks by investing adequately in maintenance and renewal, including ensuring resilience to climate change impacts.





  • In order to align the processes of road and rail capital investment, the government should set a long-term investment pipeline across road and rail around an indicative total budget envelope and with clear common strategic objectives. This should incorporate a strategic vision for the main transport corridors that includes both road and rail, ensuring that they are considered together and not separately.





The NIC goes on to say that the cancellation of HS2 beyond Birmingham, which happened only at the beginning of October, after the Assessment had been completed, leaves a major gap in the UK’s rail strategy around which a number of cities have based their economic growth plans. A new comprehensive, long term and fully costed plan is needed, says the Commission, to set out how rail improvements will address the capacity and connectivity challenges facing city regions in the North and Midlands. Who could argue with that?





More problematic, in my view, is the NIC ‘s proposition that the government should plan and invest in enhancements to the road network, targeting under-performing sections that can facilitate trade in goods, and provide better connections between cities to facilitate trade in services, observing that it is not clear that this happens at present. Accordingly, the NIC has developed a portfolio of road enhancement options, based on a connectivity metric developed by consultants, that gives each place in Britain a score to denote how well connected it is to other places, calculated by taking the average travel time between a given place and other places in Britain, and weighting them by population and distance, which are useful indicators of likely demand for travel between places. This approach is used to identify the worst performing routes on the network with substantial demand potential between key cities and towns (see map in illustration). The portfolio has been developed within a proposed budget for road investment to cover the next 20 to 30 years.





In support of its proposals for road investments, the Commission states that better connectivity will help improve trade efficiency, making it easier for businesses to move freight and trade goods and services. However, the evidence for this is problematical. For instance, one source cited by the NIC concludes that for an inter-regional transport investment, economic activity may shift either to the lower productivity region (the periphery) or to the higher productivity region (the core), the outcome depending on the underlying economic conditions and the type and scope of the investment. This is known as the Two-way Road Effect.





The emphasis of the NIC ‘s analysis is on trade in goods and services, only indirectly on non-business travel. Yet adding capacity to road and rail routes accommodates and generates more use of all kinds. On motorways, for instance, there is evidence that the increased capacity arising from converting the hard shoulder to a running lane results in local users, commuters and others, diverting to take advantage of a faster journey, pre-empting capacity intended for longer distance business users. A low connectivity metric score may well arise from delays due to morning and evening traffic congestion, indicating the existence of substantial car-based commuting. This suggests that enhancement of capacity could be expected to further increase in use by commuters, with little benefit to trade in goods and services. So, I would contend, the NIC’s approach to connectivity is too simplistic.





A further problem with the NIC’s analysis is that although it recognises that road investment will need to be compatible with plans to decarbonise transport, it concludes that the additional emissions from its proposals will not themselves substantially alter the scale of the challenge (which must therefore be borne by the plan to achieve widespread vehicle electrification by 2035). This conclusion is based on embracing the Department for Transport’s projections of road traffic demand growth of 10-28% by 2035 (as indicated in the DfT Decarbonisation Plan), while a road enhancement programme over that period would be expected to increase demand by only around 0.6 to 1.3% (based on historic evidence from a number of studies).





However, the rule of thumb, based on general experience, is that we cannot build our way out of congestion, so any increase in capacity will result in more journeys (good for trade), it will also mean more traffic, resulting in more carbon emissions – at least until fossil fuels are eliminated from road transport – and restoring congestion to what it had been (not good for trade). The Commission’s analysis, suggesting that the additional carbon emissions from its road investment proposals are relatively small, is unconvincing. What is missing is an estimate of the total additional carbon emissions from its programme of road investment, to be compared with the DfT Decarbonisation Plan projection of 620-850 MtCO2 savings from vehicle electrification between 2020 and 2050. If the total additional carbon emissions from the proposed road investments turns out to be relatively small, this implies relatively little benefits to trade; if they are large relative to the impact of vehicle electrification, then the pathway to net zero is put at risk.





A lacuna in the Commission’s analysis of transport infrastructure investment more generally is the failure to consider the application of digital technologies, both to the highway network and the vehicles using it, to enhance the performance of the system overall. The exemplar for this is the application of digital signalling on the railways that allows shorter headways between trains at peak times, thus increasing the capacity of existing track.





Conclusion





I had high hopes for the NIC as an alternative source of policy advice and appraisal methodology when it was set up in 2015. Its analysis of rail investments for the Midlands and North of England offered fresh thinking and was influential in shaping the Government’s plans published in 2021. But the Commission’s proposals for road investment are disappointing, both as regards methodology and conclusions. I suspect at least part of the problem is that its efforts are spread across the whole range of infrastructure investment it is required to cover, so that there is too little capability for deep thinking about how the road network functions and how additional capacity impacts on performance. The NIC needs to develop better models, methodologies and data sources if it to offer fresh thinking for road investment and challenge conventional wisdom and assumptions. If not to provide fresh thinking to that hitherto applied by the DfT, what is the purpose and benefit of the Commission?





Moreover, the Commission was badly unsighted by the Prime Minister’s announcement of the truncation of HS2. The failure of the Government to engage with it on such a major decision prompts a question about the purpose and status of the Commission. The politically-driven redistribution of the funds allocated to HS2 to local transport schemes is quite contradictory to the long term analytically-driven approach that is the remit of the NIC. So, while in principle, analysis of long term requirements for infrastructure investment must be right, in practice short term budgetary constraints and political priorities can render the long view nugatory. One has to ask whether there is a future for the NIC.





A Labour government might well be more sympathetic to the NIC’s role, given that the party in opposition in 2012 established a review of infrastructure planning under Sir John Armitt, now chair of the NIC. That review indeed proposed a National Infrastructure Commission be established. Labour has plans for major capital investment to support the transition to net zero, so having a source of independent advice on such expenditure may be continue to be attractive.





Indeed, there may be a case for merging the NIC with the Climate Change Committee, given the overlap of functions and their cross-departmental approach to future demand and supply. Yet as long as individual departments and their ministers retain responsibility for their budgets and spending plans, with the associated tendency to take a short term view, the strategic may continue to be subordinate to the politically pragmatic.





This blog post was the basis for an article in Local Transport Today of 28 November 2023


					

		
		

	




			
				



		
			
						

		
	

	
		

										

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The planning system for adding significant capacity to national rail and rail networks includes a national policy statement that obviates the need for discussion of national policy at local planning enquiries. The existing statement dates from 2015, and the Department for Transport has been consulting on a updated version that takes account, in particular, of the development of policy on transport decarbonisation. The House of Commons Transport Committee has published a critical report that highlights shortcoming in the DfT draft. I submitted evidence.





The DfT draft fails to reconcile the wish to continue investment in additional road capacity with the need to achieve Net Zero objectives. We await with interest the final text of the policy statement, to see if the Department can do better, so lessening the risk successful challenges in the courts.


					

		
		

	




			
				



		
			
						

		
	

	
		

										

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The Prime Minister’s recent announcement that the HS2 rail line will not now continue from Birmingham to Manchester and beyond raises issues both immediate and long term. Immediately, there is the question of how that money saved is to be reallocated. In the longer term, the question is whether we have an analytical framework that is both sufficiently complete and robust to be relevant to major projects whose gestation and implementation may span decades.





The Prime Minister’s principal stated reasons for scraping the lines beyond Birmingham were cost escalation, delays to construction, and the impact of Covid on travel behaviour. The money saved would be devoted to improved transport schemes outside London, mainly in the Midlands and the North of England, he argued. He also pointed to the huge chunk of the national transport investment budget taken up by HS2, for which Rishi Sunak implied was a relatively narrow user base and geography.





Certainly, the cost estimates of HS2 have grown substantially since the scheme was first announced in 2010. The initial cost of the full Y network, comprising both the first section to Birmingham and legs to Manchester and to Leeds, was put at £37 billion (2009 prices), but by the time of publication of the Full Business Case in 2020, this had risen to £109 billion (2015 prices), with further cost escalation in prospect due to inflation and real cost increases as earlier optimism bias is exposed.





The economic benefits projected in the Full Business Case were largely to rail users, predominantly £39 billion (present value, 2015 prices) as a result of reduction of train journey times. There were also significant benefits from reduction in crowding on the conventional network, as well as reduction in waiting and greater reliability as the network was enlarged by adding the new line, which, together with some smaller benefits, yielded net transport user benefits of £74 billion. To this was added benefits from agglomeration and other wider impacts to reach £94 billion net benefits. Taking into account revenues from fares resulted in a benefit-cost ratio (BCR) declared in 2020 to be 1.5, categorised as low-to-medium value for money.





Clearly, any further cost escalation since 2020 was potentially likely to tip the BCR into low value territory, a most unwelcome position for the largest single UK transport infrastructure project ever. But do the estimates of benefits reflect the reality? We need to go back to the core proposition, endorsed by the main political parties.





The stated intention of HS2 was to reshape the national economy by joining up the North, Midlands and London, effectively halving the journey times between the centres of the UK’s largest cities. This, it was contended, would allow businesses to invest beyond London whilst still retaining ready access to it. It was argued that the scheme would contribute towards sustainable growth in towns, cities and regions across the country, spreading prosperity and opportunity more evenly, acting as a catalyst for job creation, the development of new homes and ultimately, the regeneration of major cities and towns along the route.





This thinking was more heroic than business-like. The assumption of conventional economic investment appraisal is that the transport user benefits provide a good estimate of the ultimate benefits that arise as perfect markets redistribute benefits amongst the various beneficiaries, including land and property owners who gain from the improved access, the businesses that occupy the new premises, and people who occupy new homes. This itself is an unrealistic assumption in general. Moreover, in the case of HS2, for which the distribution of benefits between London and the cities of the Midlands and the North is crucial, estimation of spatial distribution was not attempted in the economic appraisal of the investment – and indeed is a difficult matter to predict.





Consider, for instance, a business with headquarters in London and a branch office in Birmingham. It might take advantage of the faster rail connection offered by HS2 to close the branch office, serving clients in Birmingham from London; or it might expand the Birmingham branch where office rents and housing costs are lower, on the basis that staff could get up to the head office speedily as necessary; or arrangements may be left unchanged, staff benefiting from the faster business travel spending more time in the office; and, of course, the increase in working from home as a result of the pandemic must influence all the possible business decisions. What might emerge could be an instance of what is known as the Two-way Road Effect, whereby improved accessibility between two regions may benefit prosperous areas rather than the poor areas targeted by the scheme, sucking activity away rather than bringing it in.





Given that the intention of HS2 has been to boost the economies of cities and region to the north of London, uncertainty about distribution of economic benefits means that the value of the investment was always hard to judge. Much would depend on the ability of the connected cities to take advantage of the new rail route to put in place city-centre development around new stations plus local transport infrastructure to speed travellers to and from their final destinations beyond the rail terminal. These longer origin to destination considerations can change to value of the high speed rail journey itself. The HS2 Full Business Case included an annex outlining hoped for developments around the new Curzon Street station in Birmingham, which illustrated the economic possibilities. But these did not constitute part of the economic case for the investment, to avoid double counting travel time benefits. This illustrates how notional time savings are tenaciously preferred to estimates of real-world benefits when applying the orthodox methodology to the appraisal of transport investments.





The inadequacy of the economic analysis, likely involving underestimation of the benefits from development, may well have contributed to the truncation of the HS2 project, given the latest BCR estimate of 0.8-1.2 quoted by the DfT.





A comparison with Crossrail





Another major rail investment that ran over time and budget was London’s Crossrail, renamed the Elizabeth Line on opening. Fortunately, those responsible kept their nerve. The project was not skimped or cancelled and has proved to be a great success, an example of a modern metro whose performance and popularity has surpassed expectations. The case for investment was based on the value of travel time savings to users (business, commuting and leisure) plus a number of wider economic impacts (mainly agglomeration benefits). The value of time saving benefits was put at some £12 billion, while the wider impacts provided an additional £7 billion in 2005. Subsequently, further analysis in 2018 increased the wider benefits to £10-£15 billion.





As with HS2, there was no explicit reference in the appraisal to the impact of the new rail route on real estate values or on the economic value of the businesses to be accommodated in new developments along the route. The assumption was that the boost to development and employment was accounted for by the value of travel time savings plus the wider impacts, an assumption that is implausible to non-economists. The economic analysis of the investment case failed to consider the spatial distribution of benefits, although by the very nature of the project, these would be largely within London. Nevertheless, the benefits to businesses were recognised by a funding agreement between the Mayor/TfL and the Government, which identified contributions of £300m from ‘developer contributions’ and a further £300m from a ‘London Planning Charge’ (subsequently to become the Mayor’s Community Infrastructure Levy or MCIL), a useful but not decisive contribution.





Transport for London has developed a framework to evaluate the benefits of the Crossrail investment. It is envisaged that a study to be published two years after opening will address the transport effects of the new railway, including: mode shift from cars to public transport, relief of congestion on public transport and roads, and the implications for air pollution and carbon emissions. A subsequent study is planned to consider the broader social and economic effects, including the effect of improved connectivity on new homes and jobs, changing patterns of employment and land use, and residential and commercial property prices. A report has already been published on the pre-opening impacts of Crossrail on property prices, arising from the announcement of the project; this found fairly small positive increases to both house prices and office rents.





TfL’s approach to evaluation is admirably ambitious, yet there is obvious inconsistency with the original investment case based on the value of estimated travel time savings and of wider impacts inferred from econometric analysis. It seems unlikely that it will possible to compare forecast and outturn by deducing time savings and agglomeration benefits from the evaluation findings. This prompts the question of whether, with hindsight, the investment appraisal could have been based on projections of the actual benefits that are expected to be achieved. Certainly, inconsistency of economic analysis as between appraisal and evaluation does not make much sense, not least because ex ante travel time savings and wider impacts are, by their nature, notional not observable.





A comparison with the Northern Line Extension





The possibility of forecasting the actual expected benefits of investment is illustrated by another London rail investment, the Northern Line Extension to a large brownfield site comprising the derelict Battersea Power Station and adjacent erstwhile low value commercial buildings and opportunity sites. The developers took the view that the optimal commercial gain would result from access to new properties on the site by means of an extension to the Underground, rather than by enhanced surface modes. The Battersea developers were therefore willing to contribute a quarter of the construction cost in cash. The Treasury agreed that additional taxes paid by businesses locating to the area would contribute the remainder of the financing of the rail link. On that basis, TfL could agree to proceed with construction, a rare instance of the capture of increased land value arising from new transport infrastructure to finance that infrastructure. Views may differ about the quality and coherence of the subsequent development, yet a significant area of central London has been transformed from low value to high value property, including a new building for the US Embassy.





It is relevant that there had earlier been a standard economic appraisal of transport user benefits for a range of alternative property and transport investments on this site, where the predominant benefits were travel time savings. It was found that extension of the Underground would have a less favourable benefit-cost ratio than other transport alternatives on account of the higher capital cost. Nevertheless, the decision was made to extend the Tube, the increase in real estate value being the deciding factor. Thus, much as with earlier development of the Underground, for instance the pre-war extension of the Metropolitan line, the decision was taken essentially on a commercial basis, with the estimated increase in real estate value forming an integral element of the investment decision. This exemplifies the scope for a transport authority working with a developer to take into account the value of real estate improvement for mutual benefit to take into account the increase in real estate values. In this case, of an underground electric railway, detrimental externalities were not important beyond the construction phase.





Conclusions





The main message from these reflections is that there are fundamental shortcomings to orthodox transport investment appraisal, as set down in the Department for Transport’s Transport Analysis Guidance (TAG). These arise principally from a requirement to requirement to estimate economic benefits based predominantly on time savings and other user benefits that are notional, not real and observable; the disregard of changes in land use and value that results from the improved access made possible by transport investment; and the lack of any mechanism to recognise the spatial and demographic distribution of benefits, a crucial concern in the context of regional disparities and avowed intentions to level up society. As exemplified by the cases discussed above, the orthodox approach is not fit for purpose and is becoming irrelevant for decisions making. This leaves political and commercial actors to call the shots.





These shortcomings are all the worse, given that there has been emphasis in the last two years, both in the Treasury’s Green Book and in TAG, on articulating the strategic case for a transport investment. The requirement is to set out a robust case for change that demonstrates how a proposal has a strong strategic fit to the organisation’s priorities and government ambitions. There were successive attempts to do this for HS2, clearly none wholly convincing, leaving observers with a feeling that the goal posts were being continuously moved. And now, consequent to cancellation, there is little sense of any strategic thinking, informed by cogent economic analysis, in the mishmash of investments and interventions announced by the Prime Minister, seemingly to avoid being accused of truncating HS2 merely to save money, and perhaps to find a more politically acceptable set of beneficiaries in the short term.





It is time for the DfT economists to desist from engaging in the incremental development of their thousand pages of TAG. Rather, they need to stand back and ask what purpose is being served by this, when decision makers evidently have quite unrelated preoccupations. The necessary shift in mindset is to recognise that the role of transport investment in generating economically transformational change depends on interlinked decisions by local political leaders, planners, developers and transport authorities, as illustrated by the Northern Line Extension. Appraisal needs to take a holistic view of economic benefits, including from development. The current methodological practice of focusing on transport user benefits in the absence of such linked decision-making means that the uncertainties about ultimate economic benefits are either too great to allow funds to be committed in the first place, or risk having the plug pulled after construction has started if costs increase, as illustrated by HS2.





The above blog was the basis for an article in Local Transport Today of 17 October 2023.


					

		
		

	




			
				



		
			
						

		
	

	
		

										

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The Prime Minister, in his speech to the Conservative Party Conference on 4 October, announced the truncation of the iconic HS2 rail route, originally promoted as a means of levelling up the regions beyond London by halving journey time between city centres. The intention is now for high speed trains to run only between Euston and Birmingham, reverting to lower speeds on existing track to further destinations.





The economic case for HS2 was always problematic. It got worse as costs rose. The initial cost of the full Y network, comprising both the legs to Manchester and to Leeds, was put at £37 billion (2009 prices), but by the time of publication of the Full Business Case in 2020, this had risen to £109 billion (2015 prices), with further cost escalation in prospect due to inflation and real cost increases as earlier optimism bias became exposed. In July 2023 the Infrastructure and Projects Authority gave the project a red rating, meaning that successful delivery appears to be unachievable without rescoping.





So, it is not wholly surprising that Rishi Sunak pulled the plug. Yet London’s Crossrail scheme, renamed the Elizabeth Line on opening, also overran substantially both time and budget. But once opened, the design has been widely admired and performance has surpassed expectations. So, did the Prime Minister lack the courage to adhere to the strapline on his lectern when making his announcement: ‘Long term decisions for a brighter future’?





To avoid the charge of chopping HS2 to save money, the PM announced a whole raft of alternative transport projects, ranging from a metro for Leeds to more funds to fill potholes, most of which were already planned. However, a major rail investment has been replaced in part by a miscellany of road schemes, unhelpful for achieving Net Zero but consistent with the Government’s recent downplaying of urgency of this objective. And if the expenditure profile of the aggregate of these alternatives matches that of the abandoned section of HS2, then it would be many years before their benefits are realised.





The Government established the National Infrastructure Commission in 2015 to advise it on the UK’s main infrastructure needs. The Commission is shortly to publish its second National Infrastructure Assessment outlining a strategic vision over the next thirty years. The Commission has been unsighted by the HS2 announcement, which its Chair stated to be ‘deeply disappointing’.





The truncation of the largest single transport investment, planned over many years, will not reflect favourably on the UK’s ability to execute large infrastructure schemes on which a dynamic economy depends. Nor will an announcement at a party conference of a huge switch of resources from a major strategic investment to a diversity of lesser schemes seemingly designed to spread benefits thinly where these may have greatest political advantage.





There has long been an argument that better regional rail links for cities in the Midlands and the North would be offer greater economic benefits that North-South links. But any major shift of resources deserves more extensive consideration by those affected than has occurred in the present case, where the Prime Minister has wanted to make a break with his Conservative predecessors who had endorsed HS2.


					

		
		

	




			
				



		
			
						

		
	

	
		

										

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Artificial Intelligence (AI) is much in the news. The development of Large Language Models (LLMs) has been crucial to recent advances. These are general purpose models based on artificial neural networks that can be trained on large quantities of unlabelled text using self-supervised learning. The breakthrough came from OpenAI, a US company originally set up to develop open source software, but which received $10bn investment from Microsoft so may be shifting to a more commercial mode of operation. For the moment at least, ChatGPT, its basic offering, is available without charge (https://openai.com/blog/chatgpt ).





There has been a full range of claims about this advance in AI, from offering a step change increase in productivity, which is why the prime minister wants Britain to lead the world, to concerns from knowledgeable experts that it would allow bad people to do bad things, or worse. So I thought it would be interesting to see what ChatGTP could do in practice. I posed two initial questions, and show the answers in full:





Q1 What are the causes of road traffic congestion?





‘Road traffic congestion can be caused by various factors, including:





  1. High volume of vehicles: An excessive number of vehicles on the road can lead to congestion, especially during peak travel times. As the number of vehicles increases, the capacity of the road may be exceeded, resulting in slower speeds and increased delays.
  2. Inadequate infrastructure: insufficient road capacity, poorly designed intersections, narrow lanes, lack of alternative routes, and inadequate public transportation systems can contribute to traffic congestion.
  3. Traffic incidents and accidents: Road accidents, breakdowns, and other incidents can disrupt the flow of traffic and cause congestion. When lanes are blocked or vehicles are immobilized, it can lead to significant delays.
  4. Roadworks and construction: Construction activities, maintenance work, and road repairs often require the closure of lanes or the diversion of traffic. These temporary disruptions can cause congestion, especially if they are not well managed or scheduled during off-peak hours.
  5. Traffic signal timing: Inefficient traffic signal timing can lead to congestion. If signals are not properly synchronized or do not consider the actual traffic demand, it can result in stop-and-go traffic patterns and delays.
  6. Bottlenecks and chokepoints: Certain sections of roads, such as narrow bridges, tunnels, or interchanges, may have limited capacity and create bottlenecks. When traffic volume exceeds the capacity of these areas, congestion can occur.
  7. Lack of public transportation options: In areas where public transportation is limited, unreliable, or inconvenient, more people rely on private vehicles, which can contribute to traffic congestion.
  8. Traffic management and planning: Inadequate traffic management strategies, including poor coordination between traffic control systems, insufficient signage, and improper lane markings, can exacerbate congestion.
  9. Special events and holidays: Large gatherings, festivals, sporting events, or holiday periods can generate additional traffic and cause congestion, especially if the road network is not prepared to handle the increased demand.
  10. Driver behaviour: Aggressive driving, lane weaving, improper lane changes, and lack of adherence to traffic rules and regulations can disrupt the flow of traffic and lead to congestion.





It’s important to note that the causes of traffic congestion can vary based on location, time of day, and other local factors. Addressing congestion often requires a multi-faceted approach involving infrastructure improvements, traffic management strategies, and promoting alternative transportation options.’





Q2 What is the best way to reduce road traffic congestion?





‘Reducing road traffic congestion requires a combination of strategies that focus on improving infrastructure, promoting efficient transportation systems, and encouraging behaviour change. Here are some effective approaches:





  1. Improve public transportation: Enhancing public transportation systems, such as buses, trains, and trams, can provide people with reliable and convenient alternatives to driving. This includes increasing the frequency and coverage of services, improving the quality of vehicles, and integrating different modes of transport.
  2. Encourage carpooling and ridesharing: Promoting carpooling and ridesharing programs can reduce the number of vehicles on the road. Incentives like preferential parking or reduced tolls for carpoolers can encourage more people to share rides.
  3. Implement congestion pricing: Congestion pricing involves charging fees for driving in congested areas or during peak hours. By making it more expensive to drive during times of high demand, it encourages people to shift their travel times or modes, reducing congestion.
  4. Develop and promote active transportation: Creating infrastructure for pedestrians and cyclists, such as sidewalks, bike lanes, and bike-sharing programs, can encourage people to choose walking or cycling for shorter trips. This reduces the number of vehicles on the road and eases congestion.
  5. Enhance traffic management and signal coordination: Optimizing traffic signal timing and coordinating signal systems can improve traffic flow and reduce congestion. Advanced technologies, such as adaptive signal control systems, can adjust signal timings based on real-time traffic conditions.
  6. Invest in road infrastructure: Expanding road capacity, building additional lanes, and constructing new roads in areas with high congestion can increase the overall capacity of the transportation network. Additionally, improving road design and addressing bottlenecks can help alleviate congestion.
  7. Implement smart transportation systems: Intelligent transportation systems (ITS) use technologies like real-time traffic monitoring, dynamic message signs, and navigation apps to provide drivers with information about traffic conditions and alternative routes. This helps drivers make informed decisions and reduces congestion by distributing traffic across different routes.
  8. Encourage telecommuting and flexible work hours: Promoting telecommuting and flexible work hours can reduce peak-time traffic by allowing employees to work from home or choose non-peak hours for commuting. This can help spread out the traffic demand and alleviate congestion during rush hours.
  9. Develop land-use planning strategies: Efficient land-use planning can reduce the need for long commutes by locating residential areas closer to workplaces, schools, and amenities. This reduces overall travel distances and decreases congestion.
  10. Promote behaviour change and education: Encouraging responsible driving behaviour, such as obeying traffic rules, avoiding aggressive driving, and practicing eco-friendly driving techniques, can help improve traffic flow and reduce congestion. Public awareness campaigns and educational programs can play a role in promoting these behaviours.





It’s important to note that no single solution can completely eliminate traffic congestion. A combination of these strategies, tailored to the specific needs and characteristics of each location, is typically the most effective approach to reducing road traffic congestion.’





I was impressed by these pretty good summaries of conventional wisdom. They lack penetrating insight and do not cite sources, but each would serve as a useful summary, perhaps as an introduction to a substantial analysis, for an article by a non-specialist journalist, or as the basis for a student essay. ChatGPT looks to be a real competitor for Google and Wikipedia, and indeed Google has entered the field with its own offering, known as Bard.





However, the limits of ChatGPT can be illustrated by a further question:





Q3 What do you know about David Metz, Centre for Transport Studies, University College London?





‘David Metz is a prominent transport expert and researcher associated with the Centre for Transport Studies (CTS) at University College London (UCL). He has made significant contributions to the field of transport planning and policy over the course of his career.





David Metz has an extensive background in transportation and urban planning. He obtained his Ph.D. in Transport Economics from UCL and has since held various academic positions, including Professor of Transport Studies at UCL and Honorary Professor at the Institute for Transport Studies, University of Leeds.





At the Centre for Transport Studies, David Metz has conducted research on a wide range of transport-related topics, including travel behaviour, sustainability, transport policy, and the relationship between transport and climate change. His research often focuses on understanding the complex interactions between transport, society, and the environment.





David Metz is known for his critical analysis of transport policies and his ability to challenge conventional thinking. He has emphasized the importance of considering the social and behavioural aspects of transport planning and policy-making, highlighting the need to move beyond purely technical solutions.





In addition to his research work, David Metz has been involved in advisory roles and has provided expert advice to governments and organizations on transport policy matters. He has served on various committees and panels, including the UK Sustainable Development Commission and the Scientific Advisory Committee of the UK Department for Transport.





David Metz’s contributions to the field of transport have been recognized through numerous awards and honours. He is a Fellow of the Academy of Social Sciences and has received the Wolfson Prize for Transport Policy. His research publications, including books and academic papers, have made a significant impact on the field and are widely cited by transport professionals and researchers.





Overall, David Metz is a respected figure in the field of transport studies, known for his research on transport policy, sustainability, and the social dimensions of transportation. His work at the Centre for Transport Studies, UCL, has contributed to advancing knowledge and understanding in the field of transportation.’





This is all very flattering. However, key ‘facts’ are quite wrong. I do not have a PhD in transport economics. I have not had an affiliation with the University of Leeds. I have not served on the UK Sustainable Development Commission or the Scientific Advisory Committee of the UK Department for Transport. I am not a Fellow of the Academy of Social Sciences and have not received the (non-existent) Wolfson Prize for Transport Policy. Regrettably, I have not received ‘numerous awards and honours’.  It would be going too far to say that my books and papers are widely cited by transport professionals and researchers. And my one small claim to fame, that I was Chief Scientist at the Department for Transport, was overlooked.





What is the origin of these ‘hallucinations’, as they are known – apparent confident responses not justified by the data on which the model was trained? This training presumably did not include data from a simple Google search that would have generated real facts, or a check with Amazon to find the books I have authored, or a check with LinkedIn for my career. The origin of such hallucinations remains a mystery since the LLMs are not open for inspection or are capable of validation. Nor, evidently, do they have a built-in fact checker.





So, we cannot yet dispense with Google as a source of citations, ranked according to impact, nor with Wikipedia with its editorial oversight of contributions. But Chat GTP and similar AI offerings can offer plausible narrative outlines that should be checked for factual accuracy. And they may improve over time.





One further Q&A for many readers of this blog:





Q4 How to be a better transport planner?





‘To become a better transport planner, consider the following steps:





  1. Gain Knowledge and Expertise: Develop a deep understanding of transportation systems, including various modes of transport, infrastructure, policy frameworks, and relevant technologies. Stay updated with the latest trends and innovations in the field. Pursue formal education or certifications in transportation planning or related disciplines.
  2. Analyze Data: Transportation planning involves analyzing vast amounts of data. Learn to use data analysis tools and software to extract insights from transportation surveys, traffic counts, travel demand models, and other relevant sources. Apply statistical methods and modeling techniques to interpret data accurately.
  3. Understand Stakeholder Needs: Recognize the importance of stakeholder engagement. Collaborate with various stakeholders, such as government agencies, urban planners, community organizations, and transportation providers. Understand their needs, concerns, and aspirations to develop effective transport plans that address their requirements.
  4. Consider Sustainability: Promote sustainable transportation solutions that minimize environmental impact, enhance public health, and prioritize energy efficiency. Integrate strategies for reducing emissions, improving air quality, and promoting active transportation modes like walking and cycling.
  5. Plan for Multimodal Systems: Design transportation systems that accommodate multiple modes of transport, including private vehicles, public transit, walking, and cycling. Aim to create an integrated and seamless network that offers efficient connectivity between different modes and encourages modal shift.
  6. Embrace Technology: Keep up with advancements in transportation technology, such as intelligent transportation systems, autonomous vehicles, and mobility-as-a-service (MaaS) platforms. Understand how these technologies can enhance transport efficiency, safety, and accessibility.
  7. Conduct Impact Assessments: Evaluate the potential impacts of proposed transportation projects or policies. Assess their effects on traffic flow, travel times, air quality, land use, and social equity. Use impact assessment tools and methodologies to inform decision-making and mitigate any adverse consequences.
  8. Collaborate with Other Disciplines: Work closely with urban planners, engineers, architects, and environmental specialists to develop holistic and comprehensive transport plans. Emphasize interdisciplinary collaboration to integrate transportation planning with land use planning, urban design, and environmental sustainability.
  9. Engage in Continuous Learning: Participate in professional development activities, attend conferences, workshops, and seminars related to transportation planning. Stay informed about emerging research, best practices, and policy updates. Actively seek feedback and learn from the experiences of other professionals in the field.
  10. Advocate for Positive Change: Act as a catalyst for change by advocating for sustainable and equitable transportation policies and practices. Engage in public outreach, education, and advocacy to promote awareness and support for transportation initiatives that benefit communities and enhance quality of life.





Remember that becoming a better transport planner is an ongoing journey. Continuously refine your skills, stay open to new ideas, and adapt to evolving societal needs and technological advancements in the transportation sector.’





So there you have it. Who could argue?





This blog was the basis of an article in Local Transport Today of 3 July 2023.


					

		
		

	




			
				



		
			
						

		
	

	
		

										

					Economics				

						
		

		
				
		

			

The economic benefits of agglomeration – learning, sharing and matching –  have long been recognised as driving the growth of cities. In conventional transport economic analysis such benefits comprise the main part of the ‘wider impacts’, over and above transport user benefits. This process of concentration of economic activity in city centres has been in part a consequence of the shift of economic activity from manufacturing to business services, and has taken place despite the development of information and telecommunication technologies in recent decades that has allowed remote working. The inference has been that the positive benefits of agglomeration have outweighed the negative aspects such as higher rents and commuting costs.





The coronavirus put this inference to the test. Many employees who did not need to deal with clients face to face successfully worked from home and have proved reluctant to return full time to the workplace, not least because the successful development of broadband and Zoom, Teams etc for remote meetings. This is leading to changes in the demand for city centre office space, for instance at Canary Wharf in London’s Docklands.





We have seen a previous technological development that shifted the balance between the centripetal and centrifugal forces underlying observed agglomeration clusters. Fleet Street was once the physical location of the national newspapers in central London, with printing presses in the basements, print workers on floors above and editorial staff on the upper floors. This was a classic cluster, with benefits from shared facilities and staff, allowing news to travel faster and gossip to flourish. But there were offsetting disbenefits: newsprint had to be brought into central London, from which newspapers were distributed across the country overnight, and there were restrictive labour practices reflecting trade union power when the product had to be made anew each day. However, the advent of digital typesetting allowed newspapers to be printed at remote printworks with better access to transport networks, so that the editorial offices could be disbursed to scattered locations around London. Nowadays, ‘Fleet Steet’ is a metaphor for the newspaper industry, no longer to the actual location. With hindsight, the agglomeration benefits and disbenefits were more finely balanced than had been supposed, so that new technology could tilt the balance in favour of dispersion of the cluster. 





A question is whether advances in technology and the experience of the pandemic have led to a tipping point in what had seemed to be a continuing process of city centre concentration, so that a more dispersed pattern of economic activity will develop. It will take time to see what use is made of the space freed up by major businesses leaving Canary Wharf and downsizing office accommodation. Possibly lower rents may attract other businesses that previously could not afford central locations. Repurposing is also possible to create residential accommodation, hotels, laboratory space and the like. The implications for travel demand and supply take time to become clear. It is paradoxical that firms are leaving Canary Wharf just when the opening of the Elizabeth Line has improved its connectivity to central London and to Heathrow.


					

		
		

	




			
				



		
			
						

		
	

	
		

										

					Car useEconomics				

						
		

		
				
		

			

I previously mentioned my analysis of the widening of the M1 motorway between junctions 10 and 13. My paper has now been published in a peer-reviewed journal: Transportation Research Part A, 174, 103749. The abstract is below. Access to the article may be available free of charge for a limited period here





Abstract





Cost-benefit analysis of road investments involves models that generate travel time savings as the main economic benefit. Evaluation five years after opening of a scheme to widen a section of England’s M1 motorway between junctions 10 and 13 found that the traffic moved more slowly than before the scheme opened. Comparison was made with forecast flows generated by SATURN variable demand modelling and an associated economic model. Substantial net benefits to business users were forecast, whereas for non-business users time saving benefits were more than offset by increased vehicle operation costs, consistent with diversion of local trips to take advantage of the increase in capacity. There is reason to suppose that such diversion is facilitated by the wide adoption of Digital Navigation (known generally as satnav), which makes evident the fastest route choices, even at the expense of increased fuel costs. Diversion of local trips to utilise new strategic road capacity seems likely to be a general phenomenon, which detracts from the economic case for road investment. There is therefore a good case to treat the strategic road network as mature, focussing on improving operational efficiency and exploiting vehicle-to-infrastructure connectivity in the form of Digital Navigation.