Holding Highways England to Account

The Office of Rail and Road (ORR) is responsible for overseeing the performance of Highways England (HE), a publicly owned company responsible for England’s strategic road network. ORR is consulting on how it should perform its role. I have responded as below:

HE is responsible for a substantial programme of investment in new and improved road infrastructure, each element of which is supported by cost-benefit analysis consistent with the Department for Transport’s Transport Analysis Guidance. The main economic benefit is assumed to be the value of the time saved as a result of investments which increase capacity and are intended to reduce road traffic congestion.

However, there are questions about the estimation of prospective travel time savings derived from the standard models used for traffic forecasts. For example, monitoring of the outcome of widening of the M25 between junctions 23 and 27 concluded 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.’[1] No travel time savings were observed beyond the first year after opening, in part at least due to increased traffic, notably an increase of 23% at weekends. These outturns were inconsistent with the forecasts of traffic volumes that were significantly less than observed, and with speeds that were projected to be higher with the road widening than without.[2] The higher speeds were the basis for estimates of travel time savings, leading to the DfT’s estimate of the Benefit-to-Cost ratio of 2.3, which justified the investment.

This example shows that there may be a substantial discrepancy between forecast and outturn traffic flows and speeds. That this is a general problem is indicated by the observed invariance of average travel time over the past 45 years, as found in the National Travel Survey.[3] This implies that the benefits of road investment have been taken, not as time savings, but as increased access to desired destinations, which results in more traffic. This additional traffic is known as ‘induced traffic’, the consequence of increasing capacity, which results in increased externalities related to vehicle-miles travelled, including congestion, carbon emissions, air pollutants, and death and injuries. While HE routinely monitors outcomes of schemes 5 years after opening, this may not be sufficiently long to observe the full extent of induced traffic.[4]

There is therefore reason to suppose that in general the outcome of road investment as experienced by users does not correspond to the rationale for the investment, which is principally to increase welfare and economic growth by reducing congestion and improving connectivity. This discrepancy should be of concern to the ORR.

[1] Smart Motorway All Lane Running M25 J23-27 Monitoring Third Year Report. Highways England. 2108.

[2] https://www.gov.uk/government/publications/vdm-used-to-estimate-traffic-volumes-and-travel-time-saved

[3] Table nts-0101-2018

[4] Sloman L, Hopkinson L and Taylor I (2017) The Impact of Road Projects in England, Report for Campaign to Protect Rural England