I authored an article on Plateau Car for a new International Encyclopedia of Transportation. The topic relates to the cessation of growth of per capita car use in the developed economies. The manuscript can be seen here.
The House of Commons Transport Committee is holding an inquiry into zero emission vehicles and road pricing. I submitted evidence set out below.
- There is a case for road pricing both to replace fuel duty revenues lost as ZEVs replace conventional vehicles and to help manage road traffic congestion.
- The charge for road use might comprise two elements: one generating a revenue stream for the Exchequer and another for the local authority, which would allow substantial devolution of responsibilities for transport provision.
- There would be attractions in the incremental introduction of national road pricing, building on the successful congestion charging arrangements in London.
Rationale for road pricing
The move to ZEVs will result in the loss of revenue from road fuel duty, as well as from VED were ZEVs to remain zero rated. Revenue from the former amounts to some £28 billion a year and from the latter some £6 billion. This prompts consideration of some form charging for road use to make up the loss.
The case for zero VED for electric vehicles (EVs) is to incentivise their uptake, a reason that will become irrelevant as the capital cost of EVs falls and as sales of new conventional vehicles are phased out. So, in due course VED could be applied to road vehicles generally, and if set at a rather higher rate could cover the annual cost of capital and current expenditure on national and local roads of £8 billion, obviating the need for road pricing to ensure that drivers pay for the roads they use.
One argument some make for road pricing is that without fuel taxation or a similar charge related to distance travelled, the running costs of EVs would be substantially lower than that of conventional vehicles, which would result in more miles travelled and thus more congestion, carbon emissions and other externalities. One scenario of the Department for Transport’s (DfT) 2018 Road Traffic Forecasts illustrates this expectation. However, in recent years the average distance travelled by car has remained stable, being limited by the time available for travel, the speed of travel and the proportion of households owning cars, none of which have increased in this century. It is therefore not to be expected that the replacement of the internal combustion engine by the electric motor would have much impact on vehicle use.
Another argument for road pricing is to alleviate road traffic congestion, the intention of the London congestion charge. Experience has shown that reduction of congestion is quite limited at the level of charging typically employed, particularly in a prosperous city like London where many are able to afford the charge. Charging for road use benefits those who can readily afford to pay by displacing those who are less able, generating increased inequalities in use of the road network that historically has been a relatively egalitarian domain. Nevertheless, congestion relief is in principle a possible aim of the road pricing regime, although the magnitude of the charge would need to reflect both the level of congestion and affordability in the locality if congestion is to be effectively ameliorated. Related to this is charging polluting vehicles, as in London’s Ultra Low Emission Zone (ULEZ), the rationale for which will diminish over time as EVs are increasingly used, yet which may remain relevant in respect on non-tailpipe particulate releases from vehicles.
Revenue from the London congestion charge and the ULEZ are retained by the city authority, as are charges for low emission zones planned elsewhere, ring-fenced for expenditure on transport services, and likewise revenues from parking charges. A national scheme for road user charging might comprise revenues both for the Exchequer as well as for local authorities, the latter setting levels of charges to reflect local conditions, including congestion and other environmental impacts of traffic, as well the need for revenues for road maintenance. There would be attractions in allowing local authorities to set their share of the road user charge to cover the full cost of local transport provision, obviating the need for grants from the DfT (other than perhaps for ‘rebalancing’ purposes). The Exchequer element of the charge could depend on the type of road, for instance higher for motorways that are funded nationally, and could vary by region to aid ‘rebalancing’ policies.
Introduction of road pricing
There would be attractions in introducing road pricing for EVs alone, on the rationale that they should pay their fair share of the costs of the road network that conventional vehicles are paying via fuel duty. However, the lower operating costs of EVs are a necessary incentive to purchase while capital costs remain higher. As capital costs fall, as is expected, scope would develop to charge users of EVs by introducing a road pricing regime from which conventional vehicles were exempt.
Introduction of general road pricing on top of fuel duty would be invidious for lower income motorists who are likely to continue to use conventional vehicles for longer than the better off. Accordingly, one possibility would be to introduce a general road pricing system but crediting conventional vehicles with the fuel duty they pay. This is the basis of a voluntary pilot scheme in Oregon. Because this scheme is voluntary, uptake is incremental, in contrast to an obligatory scheme that would have to be imposed all at once.
It is worth considering options for incremental roll-out of national road pricing, given the potential difficulties of overnight national implementation of charging and enforcement technologies. In London, the existing congestion charging system functions sufficiently well and is publicly acceptable, but its scope is limited by the fixed charge for entering the charging zone.
There are a number of incremental developments of the London scheme that might be feasible:
- Encourage participation via a smartphone app by offering a discount from the standard daily charge;
- Take advantage of location awareness of smartphones to identify when the user is both in a vehicle registered for the charge and in the charging zone, backed up by camera enforcement as at present;
- Encourage entry and exit from the charging zone outside times of peak congestion by offering a discount from the standard daily charge;
- Increase the standard charge but offer discounts to encourage use when and where traffic is less congested;
- Extend the charging to other areas of London where congestion is a problem;
- Make the charging and enforcement systems available to other cities that wished to manage local traffic, incentivised by the revenues that could be used to provide alternatives modes of travel to the car.
Once a number of cities were using road pricing, there would exist the basis for national adoption in the form of an established charging system, which would need to be supported by the national roll-out of camera enforcement (unless a better enforcement system could be devised). This would be accompanied by the reduction and eventual abolition of road fuel duty, perhaps with the public assurance of no net increase in revenues from road users. There would need to be a daily penalty charge for those evading payment for road use, which, if not paid when requested, might be added to the annual VED charge, failure to pay which could result in clamping.
Whichever way to bring it about, a decision to adopt national road pricing would need to be strategic, commanding wide acquiescence, analogous to the decision to phase out internal combustion engine vehicles.
Adoption of a scheme of national road pricing would allow loss of revenue to the Exchequer from road fuel duty to be offset. A scheme that generated revenues for both central government and local authorities would allow substantial devolution to the latter of responsibilities for funding the provision of their transport services in the light of local needs. A national road pricing scheme might be developed incrementally from the congestion charging arrangements in London.
21 January 2021
 Department for Transport, Road Traffic Forecasts 2018, Scenario 7.
 Metz, D. Tackling urban traffic congestion: The experience of London, Stockholm and Singapore. Case Studies on Transport Policy, 6(4), 494-498, 2018.
Below are the main points and implications of my analysis of the outcome of widening of the M25 motorway between Junctions 23 and 27, published as ‘Economic benefits of road widening’, Transportation Research Part A, 147, 312-319, 2021. Available at https://authors.elsevier.com/a/1cqCk3Rd3uuBQe
- The M25 motorway was widened between Junctions 23 and 27 as part of the Smart Motorway investment programme implemented by Highways England. Detailed traffic monitoring reports were published before the scheme was opened and for three years afterwards.
- There was some increase in traffic speeds at Year One after opening, compared with Before opening, but this gain was lost subsequently account of increased volumes of traffic. At Year Three, average daily traffic was up by 16% compared with Before, and up 23% at weekends. This contrasts with an increase of 7% for regional motorway traffic growth.
- The conclusion of the Year Three monitoring report states: ‘These results show that increases in capacity have been achieved, moving more goods, people and services, while maintaining journey times at pre-scheme levels and slightly improving reliability.’ However, this could not have been the basis of the investment case, which in general suppose that travel time savings are the main benefit of transport infrastructure investment. Accordingly, reports of the traffic and economic modelling were obtained; these utilised the long-established SATURN and TUBA models.
- The traffic model projected increased traffic volumes and speeds for the scheme opening year, comparing the ‘do something’ investment case with the ‘do minimum’ case without the investment. However, the increase in traffic volume was less than the observed outturn and the increase in speed forecast failed to materialise beyond the first year after opening.
- The modelled economic benefits derived very largely from time savings for business users. There were also time savings for local users, commuters and others, but these were almost entirely offset by increased vehicle operating costs. This was the consequence of local users rerouting trips between unchanged origins and destinations to take advantage of short journey times made possible by diverting to the motorway, travelling somewhat greater distances.
- The benefits forecast for business users were the main input to the economic appraisal that generated a benefit-cost ratio of 2.9, which was the basis for the investment decision. However, the time savings benefits did not materialise beyond the first year after opening, on account of the additional traffic above forecast.
- The nature of this additional traffic cannot be deduced from the traffic monitoring. It is likely that much, possibly most, comprises local trips rerouting, of no net economic benefit; indeed, these trips would be of negative benefit on account of the additional externalities (carbon etc) arising from the increased distance travelled. The outturn BCR must be much less than the forecast 2.9, possibly even negative.
- This M25 case is likely to be typical in that the Strategic Road Network comes under greatest stress in or near major urban centres where local traffic competes for carriageway with long distance users. Highways England has 10 smart motorway schemes in its current investment programme, with an average BCR estimated as 2.4. This likely reflects considerable optimism bias in the modelling.
- The modelling to support decision making distinguishes between different classes of road user, yet the traffic monitoring does not allow such a distinction. The monitoring is therefore of limited use in refining the models and countering optimism bias. What is needed is monitoring of representative samples of road users over time to see how their travel behaviour changes as the result of the road investment. Such longitudinal studies, as they are known, are common in the areas of health and social sciences, but almost unknown for travel and transport.
This submission is concerned with the effectiveness of the Government’s decision-making and appraisal processes for transport infrastructure projects, a subject on which I have researched and published in peer-reviewed journals.
- The standard approach to the economic appraisal of transport investments, based largely on the value of time savings, does not reflect reality. An independent review of the methodology would be desirable.
- The value of transport investment lies in better access to people and places, making possible more opportunities and choices. Improved access changes the built environment, the consequences of which can be valued.
- Digital navigation (satnav) is affecting traffic flows, and thus the outcomes of road investment, in ways that are little understood. A study is needed.
Time is not saved
The Department for Transport (DfT) has a well-developed methodology for the appraisal of transport infrastructure investments, set out in considerable detail in its Transport Analysis Guidance (TAG, formerly WebTAG, reflecting the pioneering effort to make the material available via the internet). The Guidance is consistent with the Treasury’s Green Book, and indeed appears to be regarded as an exemplar of good practice in economic appraisal in the public sector. However, the Green Book does not deal with the specifics of transport investment, so that the recent changes to it, while welcome, do not bear on what follows.
The main economic benefit supposed to arise from investment in transport infrastructure is the saving of travel time. Accordingly, the DfT has commissioned considerable analysis designed to attribute values of time to different classes of user of the transport system, according to mode and purpose of travel. Travel time savings typically amount to 80% of overall economic benefits that are set against capital and other costs in the cost-benefit analysis employed to help reach investment decisions.
Average travel time has been measured regularly in the National Travel Survey (NTS) and has barely changed over almost fifty years, at close to an hour a day for travel by all modes except international aviation. So, there is a paradox in that huge past investments in transport infrastructure have been justified by the expected value of travel time saved, which yet is not apparent in any change in travel time averaged across the population.
The explanation is that travel time savings are quite short run. In the long run, people take the benefit of faster travel to travel further, to gain access to more people and places, to have more opportunities and choices. Thus, while average travel time remained constant, the average distance travelled increased from 4500 miles a year in the early 1970s to around 7000 miles in the late 1990s. The economic benefits to users of transport infrastructure investment therefore are not time saved for more work or leisure, but rather relate to enhanced access to, and choice of, jobs, homes, schools, shops and other services.
Such access is subject to diminishing returns. For instance, 80% of urban residents in Britain have access to three or more large supermarkets within 15 min drive, and 60% have access to four or more, a level of choice likely for most to remove the need to travel further for yet more choice. On the other hand, access increases with the square of the speed of travel, since what is accessible is defined by the area of a circle whose radius is proportional to the speed of travel. The combination of access increasing with the square of travel speed yet subject to diminishing returns means that travel demand to achieve access saturates, that is, it ceases to grow.
Such demand saturation, also known as market maturity, is of course a standard feature of consumer markets generally and it is to be expected for daily travel. The finding of the NTS that the average distance travelled has not increased over the past twenty years is consistent with this expectation. So rather than planning for ever more transport infrastructure investment based on time savings, we should limit investment to meeting specific access deficiencies in what is generally a mature transport system. This points, for instance, towards investment in urban rail that can increase economic density and hence agglomeration benefits, as the National Infrastructure Commission has argued, rather than on inter-urban roads where the benefits are overstated, as the following case study illustrates.
In 2015 the London orbital M25 was widened from three to four lanes in each direction between junctions 23 and 27, part of the so-called ‘Smart Motorway’ programme of Highways England, with detailed monitoring of traffic volumes and speeds before and for the first three years after opening. The growth of traffic was substantially greater than on major roads in the region and greater than forecast in the transport modelling used to justify the investment. The model predicted a significant increase in traffic speed, which generated travel time savings contributing to a benefit-cost ratio (BCR) of 2.9, which represented high value for money. However, beyond the first year, no increase in traffic speed was seen on account of the additional traffic. The evidence suggests that this is due mainly to local users rerouting between unchanged origins and destinations to take advantage of shorter journey times via the motorway, while incurring greater fuel costs. The outturn BCR must be quite small.
This M25 case is likely to be representative of much planned investment in new capacity on the Strategic Road Network, which comes under greatest stress in or near urban centres where local traffic competes for carriageway with the long-distance users for whose benefit the investment is primarily intended. Rerouting to take advantage of new capacity is facilitated by the widespread use digital navigation (satnav) devices that offer routes with the shortest time.
At present, optimism bias in modelling means that traffic growth is underestimated and time savings overestimated. Monitoring of traffic flows before and after opening is too crude a measure to understand the consequences of the investment for the different classes of road user. Accordingly, we need to monitor the changes in travel behaviour of a representative sample of users, employing the travel diary technique as used for the National Travel Survey. This would allow transport models to be better calibrated, such that changes in access could be identified and valued, and externalities (carbon emissions, pollutants etc) that are related to vehicle-miles travelled better estimated. In particular modelling needs to take account of the impact of digital navigation on traffic on the road network.
Built environment is changed
The focus on travel time savings in the standard approach to appraisal means that the impact of transport investment on the built environment is not properly taken into account. Consider a proposal to construct a bypass around a village, motived by concerns about the local environmental impact of traffic. The economic case would be based largely on the value of travel time savings from a faster route. However, a bypass may make land more accessible for development, for instance for housing, subject to decisions of the planners and the prospective return to developers. A bypass scheme with housing is clearly different from one without, as regards both traffic and economic benefit. The standard approach to appraisal disregards the benefit of new housing when estimating the BCR on the grounds that this would double count the user benefits, which might be shifted to others such as land owners but which would not change in overall magnitude. In reality, the impact of the scheme with housing is very different from that without and they need to be appraised separately.
More generally, the real-world outcomes of transport investments depend on decisions by planners and developer. It has been attractive for the DfT to operate in a silo, disregarding changes in land use, initially on grounds of simplicity that were perhaps justified in the heyday of motorway construction. But now that we have a mature network of transport infrastructure in place, with only fairly marginal increases feasible on account of the high cost of civil engineering work, we need to focus on the benefits of new schemes beyond the traditional user benefits. Decision-making needs to be tripartite, involving planners, developers and transport authorities.
The broad objectives of investment in transport infrastructure are threefold: to stimulate economic growth; accommodate population growth; and mitigate environmental harm. Accordingly, we need an approach to appraisal that helps reach investment decisions relevant to these objectives, or whatever more specific versions may be decided by those holding devolved budgets. Changes to the built environment need to be recognised explicitly since they are important to achieving objectives, whether to make sites accessible for new housing or for business expansion. Moreover, changes to the built environment are spatially located, whereas time savings are not, yet location of benefits is very relevant to investment decisions. For instance, the economic case for HS2 was based largely on benefits to users of the new route and was silent on spatial distribution, whereas the strategic objectives were concerned to rebalance the economy in favour of regions beyond London.
An innovative approach to decision-making has been developed by the National Infrastructure Commission for its recent assessment of rail needs for the Midlands and the North. This focuses on the way in which improved rail services can increase the effective density of city centres, which has long been recognised as boosting the productivity of businesses from agglomeration benefits through more efficient labour markets, better supply chains and enhanced knowledge sharing. The Commission has extended this analysis to capture the consumption impacts of agglomeration through access to increased amenities, which replaces conventional time saving benefits. Separately, the Commission has developed a property value uplift tool that allows the estimation of the impact of transport investment on property prices.
The widespread use of digital navigation was mentioned above. The other important new technology is the digital platform, used by ride-hailing businesses to match demand to supply, as exemplified by Uber. Much is known about the impact of ride-hailing on traffic in US cities because the authorities are able to require provision of data as a condition of the companies’ operating licence. This has prompted the companies to volunteer data provision to help cities address urban transportation needs.
In contrast to ride-hailing, the providers of digital navigation are secretive. Little is known about the algorithms that calculate routes in the light of prevailing congestion, and how the guidance to users affects traffic flows generally. It is noteworthy that the DfT has recently revised its road traffic statistics to generate an increase of 26% of motor vehicle traffic on minor roads over the past ten years. It is likely that this has been due in large part to use of digital navigation that makes minor roads usable to those without local knowledge.
The lack of appreciation of the impact of digital navigation is remarkable, given its likely influence on the functioning of the road network. The DfT’s Road Investment Strategy 2: 2020-2025 makes no mention of the use of satnav (although there is an illustration of a device on p38). Highways England created a ‘high-tech corridor’ on the A2/M2 in Kent to trial digital communications between roadside infrastructure and vehicles, to improve journey time reliability, yet this appears to pay no regard to the general use of digital navigation. The prospects for investment in such a publicly funded guidance system look poor, given the benefits provided without charge by the private sector providers of digital navigation.
A better approach to taking advantage of digital navigation to improve the operation of the road network would be through regulation. There is in fact legislation in place, but never used, to licence providers of dynamic route guidance. Licence conditions could include the provision of traffic information to road authorities and the avoidance of use of unsuitable roads. Guidance to users is provided without direct charge, hence accommodating such licence conditions should not affect the business models of the providers, which depend either on selling direction-finding to retailers’ websites or mapping services to vehicle manufacturers.
The standard DfT approach to appraisal is no longer suited to decisions on investments in a mature transport system. The standard methodology has become vastly elaborate and misses the point that the benefit of investment is better access, which is seen as changes to the built environment. Decision-making needs to involve planners and developers as well as transport authorities. The National Infrastructure Commission has developed alternative approaches that better reflect the reality. An independent review of appraisal methodology would now be desirable.
Digital navigation seems to be having a significant impact on traffic flows. While the consequences are as yet little understood, it appears likely that the modelled benefits of road investment would be overstated if local traffic rerouting is disregarded. It would be desirable for the DfT to commission a study of the impact of digital navigation on the road network.
 Metz, D. (2021) Time constraints and travel behaviour. Transportation Planning and Technology,44 (published online).
 Competition Commission, The supply of groceries in the UK market investigation, 2008. Fig 3.9
 National Infrastructure Commission, National Infrastructure Assessment, 2018.
 Metz, D. (2021) Economic benefits of road widening: discrepancy between outturn and forecast. Transportation Research Part A, (forthcoming).
 Department for Transport. Full Business Case: High Speed 2 Phase One. 2020.
 National Infrastructure Commission. Rail Needs Assessment for the Midlands and the North: Final Report. 2020.
 Department for Transport. Benchmarking Minor Road Traffic Flows for Great Britain, 2018 and 2019: Methodology Report. 2020.
 Road Traffic (Driver Licensing and Information Systems) Act 1989.
Recent revisions to the road traffic statistics appear to show that there has been a substantial growth of motor vehicle traffic on GB minor roads in recent years, from 108 to 136 billion vehicle miles between 2010 and 2019, an increase of 26%. Traffic on major roads rose from 197 to 221 bvm over the same period, an increase of 12%. (DfT Road Traffic Statistics TRA0102).
Road traffic statistics are based on a combination of automatic and manual traffic counts. Major roads are well covered in that traffic in all links is counted on typical days, although not every link in every year. Given the vast number of minor roads, however, it is only possible to count traffic at a representative sample of locations every year, and the observed growth is applied to minor road traffic overall. Estimates from a fixed sample may drift over time such that the sample becomes less representative of the changing minor road network. To account for any errors incurred in the fixed sample, the sample is revised through a benchmarking exercise every decade, involving a much larger sample of locations.
The most recent minor roads benchmarking exercise was published in 2020, based on 10,000 representative locations. Overall, the benchmark adjustment for 2010-2019 was 1.19, which is the factor to be applied to 2019 data from the original sample to bring this to the observed traffic level. Data for minor roads traffic for intermediate years are adjusted pro rata, to avoid a step change in the reported traffic data. There is significant regional variation in the adjustment factor, from 1.35 for Yorkshire to 1.09 for East of England, with London at 1.32. For B roads the factor is 1.25, for C roads 1.17; while for urban roads, 1.22, and for rural roads, 1.15. Applying the regional weightings yields an increase in traffic on minor roads of 26%, as noted above, whereas the increase based on the original sample would have been 6%.
The previous benchmarking exercise published in 2009 found a smaller overall adjustment factor of 0.95, with a regional range of 0.81 to 1.08.
The substantially greater adjustment required following the recent benchmarking, compared with the earlier exercise, suggests that there has been a real change in use of minor roads, beyond errors arising from drift in the sample. Importantly, had the increase in minor road use been spread evenly across the national road network, the traffic estimation based on the sample would have been close to that from the benchmark exercise. Hence the major difference between sample and benchmark indicates considerable heterogeneity of minor road traffic growth. Moreover, the fact that the sample failed to detect the traffic growth suggests either that the process for establishing the sample was deficient in some way, or that significant changes occurred in use of minor roads over a decade.
DfT statisticians have created a revised minor roads representative sample (4,400 locations) from the latest benchmark data, which will be used for the coming decade. It would be desirable to have comparative analysis of the previous and the new samples, to gain insight into what has been happening on the minor road network. Regrettably, the statisticians only report findings, and do not attempt to explain them, which leaves uncertainty as to the nature and cause of the reported changes to traffic volumes. The representative nature of the new sample must be questionable if the reasons for the failure of the previous sample to reflect reality are not understood and addressed.
Transport for London has recognised this uncertainty. The recent Travel in London Report 13 discusses the implications of the minor roads traffic correction (p92). The revisions mean that, for 2018, the DfT estimate of vehicle kilometres was 20% higher than previously reported last year (and included in Travel in London Report 12). The previous estimate suggested a fall of 1.8% in vehicle kilometres in London between 2009 and 2018, whereas the revised series now suggests an increase of 17.9% over the same time period, this change wholly arising from revisions to the minor road estimates. TfL notes that it is currently working through how the DfT have made this assessment, and also what this could mean for London data sets. For the moment, TfL is relying on its own traffic monitoring data, although it does not report traffic on minor roads separately.
The National Travel Survey could provide a cross-check on the traffic data. Average distance travelled by car/van driver decreased from 3388 miles per year in 2010 to 3198 miles in 2019, a decline of 5.6% (NTS0303). The GB population grew from 60.95m in 2010 to 64.90m in 2019, an increase of 6.5%. The net increase in car use of about one percent is inconsistent with the new road traffic statistics which show an increase in traffic for all roads of 17% over the same period. The NTS employs a fresh sample of respondents each year, so sample drift should not be a concern. However, it is not clear that the travel diary technique would pick up rerouting to minor roads, given that respondents are asked to provide their own estimates of distance travelled for each trip.
Possible causes of increase in traffic on minor roads
One factor contributing to the growth of traffic on minor roads is the increase in van traffic, including that arising from the growth of online shopping with home deliveries. The number of vans (light commercial vehicles) registered in Britain increased by 28% between 2010 and 2019. Total van traffic increased by 34% over this period, with an increase of 49% on urban minor roads compared with 10% on urban ‘A’ roads, although ‘delivery/collection of goods’ was less important in respect of journey purpose than ‘carrying equipment, tools or materials’. However, in 2019 van traffic amounted to 15% of traffic on urban minor roads, and 19% on rural minor roads, cars being responsible for 82% and 78% of traffic respectively. So, the growth of van traffic on minor roads is responsible for only part of the overall traffic growth on these roads.
Another possible explanation of the apparent large growth of traffic on minor roads is the widespread use of digital navigation (satnav) that offers routes that take account of traffic conditions and estimated journey times. Such devices make possible the general use of minor roads that previously were largely confined to those with local knowledge. This is likely to occur when major roads are congested and represents an effective increase in the capacity of the road network, so generating additional traffic – the converse of the ‘disappearance’ of traffic when carriageway is reduced. Increased use of minor roads is problematic when policy is concerned to decarbonise the transport system and to promote active travel, which these roads facilitate.
The possible role of digital navigation might be investigated by an analysis of the correlation of the upward adjustment factor for each minor road sample location with traffic volumes on nearby major roads – to test the hypothesis that there would be more use of minor roads in areas where major roads were most congested. If so, this factor should be taken into account when setting up the new minor roads sample for the coming decade.
The use of digital navigation has been growing and may continue to grow in the future. A better understanding of the phenomenon would be important for forecasting road traffic growth by means of the National Transport Model and models at regional level and below.
A further possible cause of the changed distribution of traffic on minor roads arises from intentional interventions aimed at reducing such traffic. It has long been the practice to discourage ‘rat running’ on urban minor roads by means of suitable physical control measures, as are used in low-traffic neighbourhoods (LTN). Such measures would reduce traffic in certain locations while possibly increasing it in others through diversion. Some locations in the minor roads sample may be so affected. If LTNs and similar measures increase over time, the sample may become increasingly unrepresentative, a factor that should be taken into account in setting up the new sample. However, the net effect of intentional interventions would be to reduce traffic overall, so this cannot account for the reported growth of traffic on minor roads.
The growth of minor road use by through traffic apparently facilitated by digital navigation would strengthen the case for implementing LTN measures. Alternatively, or additionally, the providers of digital navigation might be encouraged to omit routes that direct through traffic along minor roads.
More generally, the impact of digital navigation on the functioning of the whole road network seems likely to be significant and therefore worthy of investigation.
The above considerations prompt a number of questions:
- How reliable are the statistics for motor vehicle use of minor roads, given the apparent sensitivity to the sampling of locations?
- How reliable are the NTS findings for car use?
- What information is available on the likely causes of the increase of traffic on minor roads?
- What is known of the impact of digital navigation on the road network?
- What are the implications of digital navigation for transport and traffic modelling?
The reported increase in motor vehicle traffic on minor roads over the past ten years is substantial and locationally heterogenous, for reasons that are unclear. This lack of understanding raises methodological questions about the sampling of minor roads. The reported increase in traffic is not consistent with the findings of the National Travel Survey, as well as being of concern to Transport for London. While interventions to reduce traffic on urban minor roads may increase the heterogeneity of the sample, they would not increase the volume of traffic. Hence this increase is most likely due to the growing use of digital navigation devices that allow minor roads to be used by those without local knowledge. This has implication for transport modelling as well as for policies to decarbonise the transport system and encourage active travel.
This blog post is the text of an article published in Local Transport Today 19 March 2021
The coronavirus pandemic stimulated initiatives by both the UK government and local authorities to promote active travel. The rationale was that public transport would be less attractive and would have less capacity while transmission of the virus remained a problem, so that the alternatives of walking and cycling should be promoted urgently.
The Secretary of State issued statutory guidance in May 2020 to local authorities expecting them to make significant changes to their road layouts to give more space to cyclists and pedestrians. As well as a response to the pandemic, active travel was seen as affordable, delivers significant health benefits, improves well-being, mitigates congestion, improves air quality and has no carbon emissions at the point of use. Substantial government funds were provided to local authorities for this purpose.
In London, the Mayor announced a bold new plan for street space, hoping to accommodate a ten-fold increase in cycling and a four-fold increase in walking, the rationale being that with London’s public transport capacity potentially running at a fifth of pre-crisis levels, millions of journeys a day would need to be made by other means. If people were to switch only a fraction of these journeys to cars, London risked grinding to a halt, air quality would worsen, and road danger would increase. To prevent this happening, Transport for London (TfL) would rapidly repurpose London’s streets to serve this expected unprecedented demand for walking and cycling in a major new strategic shift.
I have previously commented skeptically about the feasibility of such a large shift in travel mode. But the rationale for the urgency of the government’s and the Mayor’s initiatives was to achieve a reduction in use of buses and trains. However, that reduction came about through the measures to reduce virus transmission that included encouraging all those who could work from home to do so, as well as closure of non-essential shops during the periods of lockdown. The result was that city centres were denuded of workers and shoppers, and the extra space for walking and cycling was not needed.
The was quite often local opposition to local measure to introduce Low Traffic Neighbourhoods in which car use was restricted, not least because they were introduced without consultation as matters of urgency to respond to the pandemic. In a number of cases, decisions were reversed. An important reversal arose from a recent judicial review in the High Court initiated by bodies representing London taxi drivers who complained about TfL’s decision to exclude of taxis from an important street in central London (part of the A10 route).
The judge found against the Mayor and TfL, concluding that the measures proposed in their Plan and Guidance (Streetspace for London), and implemented in the A10 order, far exceeded what was reasonably required to meet the temporary challenges created by the pandemic. However, the judge also concluded that had the Mayor and TfL proceeded more cautiously, monitoring the situation and acting upon evidence rather than conjecture, their proposals would have been proportionate to the difficulties which needed to be addressed.
So the judgement was critical of the rushed process, but does not rule out measures that change use of streets provided proper process is followed, including gathering relevant evidence, consulting with those that might be affected, and drawing rational conclusions.
Update 22 June 2021: the Court of Appeal has reversed the High Court judgement, details of the judgement to follow.
The Treasury is consulting on ‘VAT and the Sharing Economy’. This is prompted by concerns for a level playing field between traditional businesses and newer models made possible by the internet, and also about loss of tax revenue.
The innovative approach of Uber, and to a lesser extent other providers using digital platforms, has made a significant improvement to the quality of transport services. The market for taxis is competitive, involving black cabs driven by owner-drivers as well as ‘minicabs’ whose owner-drivers taking bookings via a local agent. There is no evidence of tendency to monopoly by the dominant digital platform. In general, no taxis charge VAT so that providers of taxi services via digital platforms have no competitive advantage.
Accordingly, charging VAT on taxi fares collected via a digital platform would distort competition, at least while the VAT threshold applies to owner-drivers. There may be a case for abolishing the threshold for all taxi services to achieve a level playing field, although this would be onerous for those drivers who work part time to supplement earnings from their main employment.
If the VAT threshold were retained for owner-drivers other than those operating through digital platforms, the platforms might seek to preserve their competitive position by absorbing the tax through taking more commission from the drivers, although that would be limited by the need to pay enough to recruit drivers. In this situation, drivers offering taxi services via digital platforms would be disadvantaged. Alternatively, were VAT not to be absorbed by the platforms, fares would be higher to the detriment of consumers, leading to the platforms likely exiting the market, again to the detriment of consumers.
More generally, public transport fares are zero rated for VAT, so levying VAT on taxis would distort the market for non-private travel.
In short, were VAT to be levied only on fares charged by taxi services provided via digital platforms, the existence of the VAT threshold would distort competition, to the detriment of consumers.
There are suggestions, unconfirmed, that HMRC has already raised a £1.5 billion VAT assessment on Uber.
Note added 22 February 2021: The recent judgement of the Supreme Court that Uber drivers must be treated as workers, not as self-employed, may increase the likelihood that Uber would be obliged to charge VAT on fares.
Considerable observational evidence indicates that travel time, averaged across a population, is stable at about an hour a day. This implies both an upper and a lower bound to time that can be expended on travel. The upper bound explains the self-limiting nature of road traffic congestion, as well as the difficulty experienced in attempting mitigation: the prospect of delays deters some road users, who are attracted back following interventions aimed at relieving congestion. The lower bound implies that time savings cannot be the main economic benefit of transport investment, which means that conventional transport economic appraisal is misleading. In reality, the main benefit for users is increased access to desired destinations, made possible by faster travel, which is the origin of induced traffic. Access is subject to saturation, consistent with evidence of travel demand saturation. However, access is difficult to monetise for inclusion in cost-benefit analysis. Consequential uplift in real estate values may be a more practical way of estimating access benefits, which is relevant to the possibility of capturing part of such uplift to help fund transport investment that enhances such access.
The Department for Transport is consulting on whether to extend the length of the appraisal period used to assess project benefits, typically 60 years at present. The argument is that many projects have the potential to deliver benefits well beyond this time horizon, but these benefits are not currently included in scheme appraisals. My response is set out below.
The standard approach to the appraisal of transport investments is based on the estimation of user benefits, mainly the saving of travel time. Clearly, uncertainty increases as more distant future benefits are considered. Factors that would need to be taken into account in estimating future demand include:
- Population growth. The Total Fertility Rate (the average number of children born to a woman over her lifetime) for the UK is 1.89, below the level of 2.1 needed for a stable population, and the lowest on record. Many developed countries have lower rates: Germany 1.45, Italy 1.44, Japan 1.41. So, we may experience future population decline, although decisions on immigration would affect the outcome.
- The relationship between income growth and travel demand. The average distance travelled by all surface modes has not increased this century (NTS data), suggesting an uncoupling of the relationship between GDP growth, income and travel demand. There is evidence for the saturation of demand for daily travel.
More generally, it is impossible to validate the performance of models far into the future. Lack of validation contributes to optimism bias in modelling generally. Models are complex and opaque, with the value of many parameters to be chosen based on expert judgement, such that outcomes can often reflect the preconceptions of those who commission the modelling. The Green Book and TAG provide uplift factors for costs to allow for optimism, but there is no equivalent for benefits.
There is evidence for optimism bias in demand estimation, particularly when competitive bidding is involved, as for rail franchises in the UK and toll road concessions in Australia. Some winning bids have been too optimistic in projecting future revenues, such that rail franchisees have withdrawn, and toll road investors disappointed and consultants successfully sued.
Given all the uncertainties, extension of the appraisal period beyond the current duration would be unwise. The possibilities of benefits beyond 60 years might be regarded as a bonus that could increase confidence in an investment that offers an acceptable BCR within that period, as well as to counter optimism bias in demand estimation.
I imagine the interest in extending the appraisal period arises from the HS2 Business Case, where extending to 100 years generates a small increase to the BCR that is otherwise in a low value for money category. Notwithstanding the arguments above, there could be a case for extending the appraisal period for HS2 on account of the expected changes in land use.
There has always been an inconsistency in supposing time savings to be the main user benefit of transport investment, given that average travel time as measured in the NTS has hardly changed over almost fifty years, despite huge investment justified by the saving of travel time. The explanation is that time savings are short run. In the long run users take advantage of faster travel to travel further, to gain more access to people, places, opportunities and choices. Increased access leads to changes in land use and in the built environment that are mainly long term.
Accordingly, it could be appropriate to appraise the long-term benefits of transport investment as part of consideration of its long-term impact on the wider built environment. In the case of HS2, this would involve assessing the prospects for business and residential property development at locations whose access is enhanced by the new rail route. That is not to say that changes in land use would continue over a long period. They may well take place fairly quickly, both before and after the rail route opens, although there would be long-term benefits from the improvements to real estate. There are many uncertainties about such developments, both planning and commercial, but these uncertainties are directly relevant to policy objectives and therefore worth addressing, unlike the uncertainties about long run travel time savings.
The underlying question concerns the nature of the long run economic benefits of transport investment. While an extensive methodology has been developed based on time savings as the main part of generalised costs, time and money are importantly different. Time acts as an independent influence on travel behaviour. The long run impact of investment is to increase access within a time constraint. Such increased access is the benefit to users and results in changes to the use and value of land made more accessible.
In conclusion, if appraisal focuses on time savings to users, then extension of the appraisal period is not justified. If, however, the focus is on increasing access to the built environment, then a longer timeframe might be warranted.
The Climate Change Committee has published a comprehensive and impressive analysis of how to achieve net zero carbon emissions by 2050. This includes a detailed treatment of surface transport, currently responsible for 22% of UK Greenhouse gas emissions, the absolute amount having changed little since 1990, stable in the range 110-120 MtCO2e annually. Cars account for 61% of surface transport emissions. Three options are proposed to secure emissions reduction:
Reducing demand for car travel by a variety of social and technological changes, including increased home working, online shopping, increased car occupancy though shared mobility, a shift to active travel and public transport, and more fuel-efficient driving.
Improving conventional vehicle fuel efficiency through regulation of road vehicle performance, use of biofuels, and more rail electrification.
Widespread deployment of electric vehicles (EVs) with the uptake of new battery EVs to reach 90-100% by 2030, in line with the government’s intention to phase out sales of new conventional cars and vans by that date. Driving range is expected to improve as battery technology advances. Sufficient charging infrastructure would be needed for the 30% of car users without access to off-street parking, as well as rapid charging for longer trips. The electricity supply system will need reinforcement.
The CCC has modelled the quantitative requirements associated with these options to show that it is possible to reduce surface transport emissions to 32 MtCO2e in 2035 and to 0.9 MtCO2e in 2050. The largest contribution comes from EVs. There are of course multiple uncertainties, many of which have been modelled.
The question is to what extent it will be possible to follow this emissions reduction pathway without measures beyond those already planned. Will it be necessary to create stronger incentives, for instance through more subsidy for EV charging facilities, or by making conventional vehicles more costly to operate through increased taxation? Changing relative prices can be a powerful incentive to change behaviour. It has not been helpful that public transport fares have risen much faster in recent years than the cost of motoring, in part due to a freeze on the rate of road fuel duty since 2010, reflecting perceived political sensitivities.
I am not optimistic about the practical possibilities that would increase the cost of car use, even for the virtuous cause of tackling climate change. We will have to make the most of regulation, the costs of which are more opaque, to effect the necessary changes.