Transport

EconomicsTransportTravel

Introduction

 A significant new element is being enthusiastically introduced by the Department for Transport (DfT) to the ‘toolkit’ for transport planning in the shape of its new Connectivity Metric. I offer my views on its relevance and suitability, some thoughts on its most appropriate uses, and discuss the wider implications of the proposed new approach to decision support with the aid of the tool.

What is connectivity?  

The purpose of the transport system is to enable people and organisations to reach the destinations from which they would benefit by gaining access. To understand what improvements and additions it would be worthwhile making to the current transport network, it could be helpful to have a measure of connectivity between trip origins and destinations, and how such connections might be enhanced. To this end, in December, the DfT, in partnership with the Ministry of Housing, Communities and Local Government (MHCLG), published details of a new Transport Connectivity Metric developed by the DfT, which measures an individual’s ability to reach employment, other public and commercial facilities, services and social engagements. This metric evaluates the value of destinations and the opportunity to reach such destinations using various modes of transport, including walking, cycling, driving and public transport, and considers different purposes of travel, such as employment, education, shopping, leisure and healthcare.

In launching the new Connectivity Tool, which implements the Metric, Heidi Alexander, Secretary of State for Transport, stated that this would move toward a vision-led approach to planning, targeting investment in transport infrastructure that enhances connectivity to under-served communities, and support the unlocking of development sites. Matthew Pennycook, Housing Minister at MHCLG, linked the Tool to proposed reforms of the National Planning Policy Framework, to provide the ‘objective evidence base’ required to meet new mandatory housing targets, without creating car-dependent ‘commuter deserts.’

This all suggests that the government sees the new Tool as helping to boost home building and other development in the most effective way, as part of its core policy to stimulate economic growth. The question is whether it is likely to fulfill expectations.

Earlier studies

The new Connectivity Metric, the fruit of a decade of development, is the successor to the DfT’s Journey Time Statistics, published between 2015 and 2019, which in turn succeeded the Core Accessibility Indicators, first published in 2008. The Journey Time Statistics covered the shortest travel time to a given type of service by a particular mode of transport, averaged over an area; the proportion of users in a given area that could access a service within a given time; and the number of different services in a particular area that users could reach within a given time. However, the DfT now claims that the methodology and technologies used in the production of these statistics involved very lengthy processing times and a large amount of dedicated resource. Over time, this has meant the statistics developed an increasingly large lag between the period they related to and their publication.

Accordingly, the DfT has seen the merit of developing the new Connectivity Metric, designed to be used for both monitoring and appraisal purposes, to understand the impact of policy interventions. It aims to calculate a connectivity score for all of the geographic areas covered by the previous journey time statistical series, based on the purpose and mode of travel. The intention is to demonstrate improving connectivity across the UK and growing the economy by enhancing the transport network, a DfT ‘Priority Outcome’ as part of the Spending Review settlement in 2021, and still recognised as such.

As part of of my long-standing research interest in the factors affecting travel demand and the provision of transport services, I had taken advantage of the earlier Core Accessibility Indicators to investigate the relationship between mobility and access to, and choice of, key destinations: primary and secondary schools, further education colleges, family doctors, hospitals, food stores, and places of employment. For the populations of 353 English local authorities, I estimated the average extent of choice of these destinations as a function of travel time and mode. For instance, for a GP surgery reached within a 15-minute journey by public transport and/or walking, there is a wide distribution of access across the local authorities, highest in urban areas, least in rural. But for a 30-minute journey by these same modes, the population of a majority of local authorities have the choice of five or more GPs. Of course, the car provides more choice: the populations of nearly all local authorities have access to five GPs within 15 minutes by car, exemplifying the enhanced level of access available by this mode (which accounts for nearly two-thirds of all trips).

These findings were consistent with my previous suggestion that the demand for daily travel has largely saturated, as I proposed in a 2010 paper entitled ‘Saturation of demand for daily travel’. As evidence, I cited a study by the then Competition Commission of access to supermarkets, which estimated that 80 per cent of the urban population could reach three or more large stores within a 15-minute drive, and 60 per cent get to four or more.

You could ask yourself, in these circumstances, if you could choose between three or four large supermarkets within 15 minutes driving, would you wish to travel further to reach a fourth or a fifth. If not, we would say that your demand for travel for the purpose of accessing a supermarket has ‘saturated’, a standard concept in consumption economics.

If you don’t use a car to shop, you could ask the same question about access to local foods stores within, say, a 10-minute walk, the choice available being dependent on the density and prosperity of the neighbourhood. Certainly, there are locations where choice is limited, in rural areas and low-income urban ‘food deserts’. Nevertheless, my conclusion is that high levels of access and a good choice of commonly used destinations are on offer to the large part of the population that has available a car or good public transport, such that there is little need to travel further to satisfy these needs.

Regrettably, the concept of ‘travel demand saturation’ has not generated interest from transport economists and planners, whether to endorse or to rebut. Hence it seems worth considering whether the DfT’s new Connectivity Metric would shed further light on this dimension.

The mechanics of the new Metric

How the new Metric works is quite complex and opaque, and I do not pretend to understand the account of the software and modelling (where reference is made to a number of algorithms and programme languages: Dijkstra, Rust, KD-tree, Tobler’s hiking function, Valhalla’s routing data engine, scipy Python). But let me summarise the main points of the methodology, as I understand it, that I think will be relevant for those interested in the outputs:

  • Trip origin and destination data derive from Ordnance Survey, post code directories and other official sources, as are transport networks. Willingness to travel is inferred from National Travel Survey findings. Each node in a transport network that is within reach of an origin provides connectivity value to that origin for each combination of destination type, mode of transport and time of travel. For example, a large employer at a node that is easily accessible by a train station means that node will have a high value for the purpose of employment and the public transport mode.
  • The connectivity model calculates which destinations are accessible within 60 minutes from each origin point and determines the value they add to that origin. The main output is a one-hour connectivity metric, encompassing the value of destinations that can be reached in this time, as a function of mode and purpose of travel. This lumps together different kinds of destinations for the same broad purpose, for instance GP surgeries, hospitals, opticians, dentists and pharmacies to provide a healthcare connectivity metric. But on the other hand, the locations are very granular, covering 15 million 100 metre-square areas in England and Wales. The outputs are adjusted such that the origin location with the best score receives a scaled score of 100 and all other locations receive a score which is relative to that, such that an origin location with a score of 50 is considered to be half as ‘connected’ as the best location.
  • One factor influencing a network node’s contribution to the connectivity score of an origin point is the diminishing returns effect. This parameter represents the decreasing incremental utility of accessing multiple destinations of the same type (as for example to supermarkets, discussed above). Such parameters were estimated through internal research and validated through consultation with local authorities.

Outputs of the connectivity model are illustrated by ‘heat maps’ showing overall connectivity to all destinations, both by travel mode and by journey purpose. As the DfT’s supporting paper to the tool admits, these offer few surprises: higher scores are strongly associated with areas with more destinations that people consider of value. Overall connectivity is higher in urban areas because connectivity is about being able to get to valuable places quickly, and as such the connectivity scores will inherently increase with the density of development and number of destinations.

By region of England and Wales, overall connectivity is highest in London, with a median score of more than 80, and lowest in Wales with a median below 60, but with wide spreads about the median in all regions. For particular locations, more frequent public transport, less congested roads and more direct cycle routes would all increase the connectivity score. Yet areas closest to city centres aren’t always the highest scoring, due to local differences between specific locations distributed around the centre, including road networks, public transport options and cycling routes.

The DfT paper recognises that driving by private car is – not surprisingly – ‘the great equaliser’, being the mode that will result in highest connectivity in rural areas as compared to the best area (which is London), while for other travel modes, high connectivity is much more clearly clustered in ‘hot zones’ of urban areas. 

How useful will be the new Connectivity Metric?

The Department states that the new Connectivity Metric has been designed to be used for both monitoring and appraisal purposes, to understand the impact of policy interventions. Yet having gone to considerable effort to create this metric, the DfT fails to clarify or illustrate how it might be used by transport policy makers or practitioners.

Presumably, a local authority might estimate the connectivity of a greenfield site for a proposed housing development, finding a high value for car access, but lower for other modes unless provision for active travel and public transport could be materially enhanced. But this situation is surely already well understood. Also well understood is that a well-connected city centre site is a location where new homes could be provided with no car parking spaces. So, we need to ask how would quantification help?

One situation where a quantified measure of connectivity would seemingly be useful is where a wholly new development is planned, such as a New Town. The government has endorsed the report of a Task Force that identified twelve promising locations. The spatial location of homes, services and transport provision could be considered as a whole, employing the connectivity metric to maximise access for the residents, a point made by Conrad Bailey, the DfT’s DG for public transport at the Local Transport Summit held in Derby on 18 November. Yet such wholly new developments will be few in number.

More generally, quantification of connectivity could be useful if it could be linked to associated economic value, such that measures to improve connectivity could be subject to cost-benefit analysis. For example, recent market research from the Nationwide Building Society looked at the value buyers and renters place on being close to rail, underground and tram services in London, Manchester and Glasgow, finding a £42,700 premium in London for property 500m from nearest station, compared with a similar property 1,500m away. The equivalent figures are £10,900 for Manchester and £8,800 for Glasgow. On average, survey respondents were willing to pay 8 per cent more to live in an area with good transport links compared to an area with poor links.

These findings reflect choices of residence in relation to existing rail services, higher property values being associated with better connectivity. There have also been a number of academic studies that found a similar relationship between new rail investments and the consequential enhancement of property values.

One important feature of the Connectivity Metric is that it recognises that improvements in connectivity offer diminishing returns (diminishing marginal utility, as economists would say), consistent with the property value evidence and with the concept of travel demand saturation.

Access, made possible by connectivity, increases with the square of the speed of travel, being proportionate to the area of a circle whose radius is proportionate to the speed if travel (qualified by the density of the road network). Access, increasing with the square of the speed and being subject to diminishing returns, is therefore subject to saturation, as I explained in my recent book, Travel Behaviour Reconsidered in an Era of Decarbonisation (section 2.5).

In contrast, the orthodox approach to transport investment cost-benefit analysis, as set out in the DfT’s Transport Analysis Guidance, supposes time saving to be the main benefit of faster travel, with no suggestion of diminishing returns, and so no limit to the scale of investment in additional capacity. But diminishing returns does indeed imply a natural limit to investment to enhance connectivity and access, and has led me to propose that we have a largely ‘mature’ transport system, with limited benefits from further infrastructure investment (section 7.2 of my book).

We already recognise that urban road networks are now mature. The capacity of many of these were enlarged in the last century to accommodate the growth of car ownership and use, including new elevated motor roads and ‘flyover’ junctions, widened arterial roads and major one-way traffic flows (‘gyratories’). But the damage to the urban environment was soon recognised and such carriageway enlargement ceased, and in many situations has been reversed to create an improved urban environment and a better ‘sense of place’.

Accordingly, when faced with delays from urban traffic congestion, we do not propose to enhance connectivity by adding to road capacity, but now aim to manage demand, for instance with London’s congestion charging scheme, Nottingham’s Workplace Parking Levy, and generally by the management of kerbside access and the promotion of public transport and active travel.

I have proposed in my book that the concept of transport system maturity is now appropriate for interurban roads as well as for urban roads, and also for interurban railways and airports. The implication is that we should aim to make best use of the infrastructure we already have, largely avoiding costly investment in new major civil engineering structures. Accordingly, I was pleased to see recognition in the UK Infrastructure: 10 Year Strategy, published by HM Treasury and the new National Infrastructure & Service Transformation Authority in June, that ‘The UK has a mature transport network, but one with a large and growing backlog of maintenance and renewal needs.’ (para 3.9).

As it stands, the new Connectivity Metric might be used to monitor ex post the consequences of a transport investment, and even to project ex ante gains in connectivity from an investment. But without being able to attach an economic value to such changes, there could be limited input to decision making, which has to be focused on allocation of a finite budget for investment.

Moreover, the lumping of different types of destination for the same broad journey purpose is unhelpful. For instance, a location with a low connectivity score for access to healthcare might reflect any of the absence of a suitably located GP practice, a run-down high street that is unattractive to retailers such as pharmacies and opticians, the relocation of a hospital to a newly built site further away, or a national shortage of dental practices.

In such situations, improvements to bus services might be one means of enhancing connectivity, while government funds for NHS improvements, and to help local authorities to support urban enhancements, may improve effective connectivity by means other than transport investment. Thus, the new connectivity metric may lack sufficient granularity of purpose to be useful for decision making.

The concept of ‘connectivity’ seems to place emphasis on measures to improve transport services. However, the related ideas of ‘access’ and ‘accessibility’, extensively discussed in the research literature, have broader applicability, including to organisations aiming to meet the needs of individuals other than as transport providers. For instance, Professor Glenn Lyons has advocated the concept of ‘Triple Access Planning’, which takes account of how changes to land use and telecommunications, as well as to transport, can enhance access. So metrics for access may have a greater impact than a metric for connectivity.

The Connectivity Metric aims to measure an individual’s ability to reach employment, services and social engagements. A similar approach might be used to assess business connectivity – how firms are connected to suppliers and customers, for both individual business travel, and the transport of freight. This would be relevant to use of both road and interurban rail networks, which are shared with non-business users and for which connectivity is mutually dependent.

Improving connectivity for businesses is expected to increase agglomeration benefits, which are difficult to estimate with current methodology. A connectivity metric for businesses might constitute an additional dimension to the tool’s usefulness, especially if economic value could be associated with changes in connectivity.

What next?

The new Connectivity Metric doesn’t show how many people take different routes or forecast how many may do so – purely the opportunity it gives them. Nor is it a transport model: there is no trip assignment or convergence processes. Hence the metric is based on a static model and hypothetical trips, which raises the question of why a transport model was not employed at its core to estimate connectivity from observed trips.

The providers of digital navigation services (commonly known as satnav), such as Google Maps and TomTom, employ models of the road network that function in real time, using traffic information to project journey times from chosen origins to chosen destinations. Such ‘digital twins’ therefore allow estimates of connectivity, an approach that is being extended beyond routing advice.

Thus, TomTom’s Origin-Destination Analysis offers insights into where trips begin and end, which can be used to identify locations for developments that are well connected. Transport consultant SYSTRA has adopted TomTom’s services, intending to build transport models that replicate real-world traffic conditions, to permit analyses of the potential impacts of infrastructure investments, schemes, and policies that could improve connectivity.

I fail to understand why the DfT, National Highways and road authorities generally seem so averse to considering the application of existing digital navigation tools to both network management and planning, in the present case to identify and implement measures to improve connectivity.

The DfT makes clear that as the new metric yields its first estimates of connectivity, it welcomes feedback to inform future developments and refinements. The connectivity estimates are therefore to be regarded as experimental statistics and should not be used by themselves for policy or decision-making. They are published on a provisional basis as research into a new method that enhances and supplements the previously produced journey time statistics. Accordingly, the DfT advises caution when using the data.

Clearly, feedback from users would be important in ascertaining whether the new metric is fit for purpose. I recall a study commissioned by the DfT of its long-established National Trip End Model (NTEM) to understand the needs of users of the model. This study found widespread recognition of the complexity, even impossibility, of what NTEM sets out to achieve, and consistent patterns of user frustration; in particular it was considered extremely challenging to understand exactly what NTEM is for, what to do in certain circumstances, or from where an output has come. Evidently such an outcome is hopefully to be avoided with the new Connectivity Tool.

While awaiting the experience of the first users, it would be desirable to commission a peer review of the methodology, to address quality and capability. A peer review of the latest version of the DfT’s National Transport Model identified a number of shortcomings, including the identification of some significant counterintuitive results. These may reflect major issues with the model design or implementation.

Altogether, my sense is that the DfT analysts, faced with a challenging problem, have come up with an elaborate, but opaque, methodology whose utility in practice is difficult to assess at present. Arguably, the previous approach of estimating journey times from where people live to key local services was straightforwardly intuitive, as is the approach adopted in a new report on integrating transport from the Centre for Cities. This utilises public transport connectivity in and around conurbations, measured as the number of people who can reach a principal city centre within a specified ‘reasonable journey’. In contrast the DfT’s new connectivity metric is defined vaguely as ‘someone’s ability to get to where they want to go’. Would improvements in such a generic metric seem worthwhile to the electorate, I wonder?

The DfT’s Transport Analysis Guidance methodology is excessively elaborate, all 1700 pages, that requires an enormous amount of effort to comply on the part of public sector transport undertakings, local authorities, their consultants, and the departmental officials who vet the investment cases – effort which is not justified by the outcomes of the appraisal process. I fear that the new Connectivity Metric may be a further example of an elaborate effort to achieve methodological rigour trumping useful application to policy decisions.

In summary, the DfT’s new approach to quantifying connectivity is certainly an impressive methodological exercise. Yet it is substantially static, reflecting the relatively unchanging nature of the built environment we have inherited, within which nearly all trip origins and destinations occur. And while granularity of place is very high, the lumping of journey purposes into very broad-brush categories may prove unhelpful for decision makers. Hence it remains to be seen how applicable the new metric will be to dynamic situations involving location decisions and trade-offs by place and purpose made by developers, businesses and individuals.  

Nevertheless, a potentially important implication of the new metric is recognition by the DfT of diminishing returns to investment to increase connectivity. This then requires consideration of the concepts of travel demand saturation and network maturity, and of the consequences for projections of future travel demand and of infrastructure investment.

This blog post is the basis for an article published in Local Transport Today of 22 January 2026.

TransportTravel

In our parliamentary system, the performance of the government (the executive) is supposed to be held to account by the elected MPs of the House of Commons, and ultimately of course by the electorate as a whole. In the field of transport, the key body to be tracked is the Department for Transport and the considerable number of its executive agencies with more specific transport delivery responsibilities, particularly those with, or who influence, large expenditures such as National Highways, the emerging Great British Railways, the Civil Aviation Authority, and the Office for Rail and Road. Some light is cast on all this in the Department’s Annual Report and Accounts published at the end of term before the summer parliamentary recess. But it is hardly a widely read tome – this year running to 372 densely packed pages – and one on which the Department’s top civil servants and their political masters are able to put their own spin.

Arguably, the Department is not in great shape, judged by its recent record. As a former civil servant, I am aware of the difficulties in assigning responsibilities, given the central role of politicians with manifestos to be implemented, and also given unanticipated events, of which the Covid pandemic is a good, albeit extreme example. Nevertheless, if decisions are to be ‘robust’ (a favourite appellation), a government department must be able to successfully navigate these swirling currents.

Too long a list of crashes and wrecks must raise doubts about competence and general approach. Recall the failure of cost control that led to truncation of HS2, and the failure to anticipate public anxieties about safety that led to the abandonment of the Smart Motorway programme that converted hard shoulders to running lanes – both instances of major policy failure that do not inspire confidence. The House of Commons Transport Committee was sharply critical of the Smart Motorway programme, a good example of how Parliament through its select committees can hold the executive to account and even on occasion to help change policy.

The National Audit Office (NAO) provided an overview of the DfT for the new Parliament in November 2024, assessing the nine principal risks faced by the DfT and its arm’s-length bodies, and concluding that only a couple of items had decreased in severity in the past year. Noteworthy shortcomings were the Department’s inability to deliver its major projects to time or cost or deliver the expected benefits; inability to deliver sufficient carbon savings, inability to adequately maintain infrastructure, and to make adequate forecasts of future travel demand or changes in the transport system, thus resulting in ineffective decision making.

Regular readers of this blog will be aware of my particular worry concerning deficiencies in the Department’s analytical function, which has led to misconceived policies. The DfT has prided itself on the rigour of its approach to the cost-benefits analysis of transport investments. As further impacts of such investments are identified, additional units are bolted on to the main Transport Analysis Guidance (TAG) framework, for instance the methodology for quantifying agglomeration benefits that I recently discussed.

The consequence has been the enormous growth of TAG, which has now reached 1700 pages (I have counted), not including data and software. This contrasts with the Appraisal Guide of the Ministry of Housing, Communities and Local Government (MHCLG), which covers a similar range of topics to TAG, but in a succinct 174 pages.

This ten-fold difference in pages count arguably reflects the DfT’s wish to micro-manage its clients, whereas the MHCLG is content to set out the principles and allow those concerned to use their judgement about what is useful and necessary to construct an investment case. The problem is that the DfT approach requires an enormous amount of effort to comply on the part of public sector transport undertakings, their consultants, and the departmental officials who vet the investment cases – effort which is not justified by the outcomes of the appraisal process.

For instance, the DfT’s 2021 Integrated Rail Plan for the North and the Midlands admitted that ‘Rail schemes in the North are at increased risk of being considered poor value for money when applying conventional cost–benefit analysis. This is driven in part by smaller city populations in the North, different travel patterns, as well as the general high cost of building rail infrastructure’. So, it seems now to be the case that rail investment decisions are likely to be based on political judgement rather than complex and nugatory economic appraisal.

More generally, the benefits of transport investment substantially take the form of enhanced access, rather than the saving of travel time, as I have argued in some detail in my latest book, which means that the excessively elaborate TAG methodology rests on insecure foundations. It is time to take the proverbial axe (or is it nowadays the chainsaw?) to the DfT’s analytical function, both the documentation and the personnel involved, and to shift the focus from investment in new infrastructure to real issues of current policy concern.

Encouragingly, the House of Commons Transport Committee seems to be again on the case and is holding a number of inquiries this autumn, notably into joined up travel provision, taxi regulation, and skills for transport manufacturing. Some thoughts on these below.

Joined up journeys: achieving transport integration

Last year, in the wake of Labour’s General Election victory and the arrival of Louise Haigh as Secretary of State, the Department for Transport sought inputs to the development of an Integrated National Transport Strategy, intended to set the high-level direction for how transport should be designed, built and operated in England over the next 10 years. This is proving a lengthy process, probably not helped by the early change of Transport Secretary herself, and the learning curve of the junior minister in charge.

Besides, the DfT is now seeking to recruit a Director General for Transport Strategy to provide strategic leadership across a ‘multi-modal and cross-cutting portfolio’, with responsibility for a range of themes including transport strategy, science, AI, data and decarbonisation agendas. In contrast to this high-level view, the Transport Committee is focusing on the achievement of joined-up journeys, asking about the key features that make a transport system feel cohesive and more accessible to the user.

Joined-up transport is naturally to be desired. There are examples of achievements, but also of failed attempts and failures to attempt, all of which illuminate both the barriers to integration and how these can be overcome. The obstacles can be operational, organisational and economic. Sometimes operational or economic obstacles can be overcome through a change of organisational arrangements. I offer below some illuminating examples but do not attempt a systematic or theoretical analysis.

The leading example in the UK of urban joined-up transport is in London, where Transport for London (TfL) operates an integrated public transport system involving relatively high frequency services, cashless payments, advance journey planning, real time tracking of buses and trains, while increasing accessibility to meet the diverse needs of users. High frequency services minimise delays when commencing and changing services, allowing users to ‘turn up and go’, rather than having recourse to a timetable.

The adoption of on-street competition of bus services outside London in the nineteen eighties was a politically-driven policy intended to promote economic efficiency, but at the cost of integration benefits. The competition authorities even frowned upon measures that would promote collaboration between competing bus operators. Experience has meanwhile shown the benefits of the London model of integration, and the move to franchising, effected in Manchester and planned elsewhere, should allow more joined-up journeys to be made. Interestingly, the new buses re-regulation legislation now going through parliament is ‘permissive’ about which approaches to take locally, and some welcome experimentation is being provided for and encouraged by the Department.

Another example of long-established service integration is the timetabling of ferry services in Scotland to meet connecting trains. To cite my own experience by way of example, I have departed from London before midnight on the Caledonian Sleeper, arriving at Glasgow Central station in time to walk to Queen Street station to get the West Highland Line to Oban, which connects with the CalMac ferry to Castlebay on Barra in the Outer Hebrides – a eighteen-hour joined-up trip for a total change of scenery.

A far more extensive case of service integration involving multiple travel services is found in Switzerland, which has an admired public transport system characterized by its extensive network, seamless integration between different modes of transport, and adherence to a punctual timetable. Trains, buses, and other forms of transport operate at fixed intervals, often every 15, 20, 30, or 60 minutes, with departures at the same minute past the hour from each stop, known as the ‘Taktfahrplan’. This illustrates how lower frequency services can form part of a joined-up system designed to minimise waiting time and facilitate interconnections, for the benefits of users.

New transport modes can facilitate joined-up travel, such as e- bikes, e-scooters and new forms of car share. The best example is Uber, which pioneered ride-hailing, a taxi service that has proved very popular. A single mobile phone app, with its associated payment system, functions in all locations where the service is available, in UK cities and abroad. This facilitates joined-up travel involving a taxi stage, particularly beneficial in places where local taxis are of uncertain reliability, although is not yet regarded as part of the overall public transport system in the UK.  

In other situations, no regard is had to the benefits of joined-up travel, for instance airports that require arrival 2-3 hours prior to departure, to allow for delays in checking-in, security and boarding. For travellers, investment to reduce queues is likely to be more cost-effective than adding runway or terminal capacity.

Another example of disregard of joined-up benefits arose when adjacent London boroughs authorised different providers of the newly arriving commercial rental e-bikes and e-scooters. Hounslow Council recently switched from Lime to Forest and Voi while the adjacent borough of Richmond authorises Lime bikes but not Forest and Voi. Hounslow’s decision to appoint Forest and Voi followed a competitive procurement process, but the result has been a mass of abandoned cycles at a busy ‘border’ point between two London Boroughs because a bike’s electric motor cuts out once riders enter the neighbouring borough. This is further instance of the potential conflict between seeking efficiency benefits from competition between operators and achieving benefits from service integration – and a challenge to the necessary regulatory and supervisory framework we might expect from the DfT.

The concept of Mobility-as-a-Service (MaaS) has attracted much attention in recent years from transport planners and academic analysts – and might appeal to ministers as a concept to promote in any integrated transport plan. The proposition is that if a full range of transport services could be offered on demand, users would be able to minimise car use or even avoid car ownership. The motivation is concern about the adverse environmental and societal impact of the car, and the outcome would be a joined-up multimodal offering.

However, the MaaS concept has proved difficult to implement in practice on account of the operational challenges of providing multimodal alternatives to the private car, in contrast to single mode provision of services such as ride-hailing taxis, street-based car or e-bike rental. Moreover, the private car has many attractions, such that three quarters of UK households own at least one vehicle.

Commercially, MaaS has proved problematical when implemented. Difficulties experienced include lack of user uptake, financial sustainability, integration of the different modes, and lack of a clear value proposition. The original start-up business based in Helsinki that pioneered application of the concept filed for bankruptcy in 2024. A MaaS project in the Solent region of the UK aims to integrate various transportation options into a single mobile app for easier planning, booking, and payment of journeys. The project is part of the Solent Future Transport Zone funded by the Department for Transport. It remains to be seen whether a financially viable service will be achieved by the time the grant runs out.

Public transport operators have the financial heft to enlarge their offering through a MaaS approach. On the other hand, the MaaS unitary payment system comes between the public transport operator and its customers, which may slow cash flow and reduce knowledge of user behaviour. Nevertheless, five years ago the Berlin public transport company instigated a MaaS system, known as ‘Jelbi’, that integrates transportation options including public transport, bike rental, e-scooter, car sharing and taxi (but not ride-hailing) into a single app. In contrast, TfL has shown no signs of any similar initiative, perhaps on account of the availability in London of many independent cashless-payment transport options and routing apps.

Competition between providers may benefit users through lower prices but inhibit valued service integration. Single ownership of many modes facilitates integration but at the potential loss of efficiency and thus higher prices. Partnerships may be difficult to achieve on account of conflicting interests, but once established may prove durable. There may be scope for interventions to foster transport integration, effected by placing a duty on regulators and public authorities to have regard to the benefits from integration when carrying out their functions and avoiding barriers that inhibit joined-up journeys

Licensing of taxis and private hire vehicles

New forms of shared car provision often fall foul of an ancient legislative regime still in place, dating back to the original hackney cabs. Sensibly, alongside its inquiry into transport integration, the Transport Committee is asking whether current licensing arrangements enable local authorities to effectively regulate and oversee the taxi and private hire vehicle (PHV) sector across England. I have previously discussed the regulation of transport sector services generally, noting the contrast between the historic regulatory regime that nevertheless governs innovative business models such as ride-hailing, exemplified by Uber, and the forward-looking approach to the regulation of autonomous vehicles that would apply to driverless taxis (‘robotaxis’).

There is some uncertainty about the feasibility of deploying robotaxis in British cities, which have historic narrow residential streets, often with cars parked on both sides, requiring negotiation between vehicles approaching in opposite directions. This could be challenging for any kind of driverless vehicle, particularly so for a taxi that must be able to gain access to every street address by a reasonably direct route.

Moreover, there are complicated situations to be managed, such as pick-up and drop-off (‘PUDO’ events) at airports, stations and often at kerbside. And there is a question as to what extent the saving in driver costs compared with conventional taxis would be offset by increased capital costs of automated vehicles plus the costs of oversight, and whether any net cost saving would result in lower fares. Nevertheless, proponents of driverless technology hope that such impediments will be overcome and questions answered satisfactorily, so that the regulatory regime should be in place on the assumption that this optimism will be justified.

The Automated Vehicles Act 2024 provides for the Secretary of State to authorise a road vehicle to operate as an AV and to make regulations for the licensing of ‘no-user-in-charge’ operators. This would apply to robotaxi operators, who should have general responsibility for the detection of, and response to, problems arising during a no-user-in-charge journey overseen by the operator.

The DfT issued a consultation document in July concerning an ‘Automated Passenger Services (APS) permitting scheme’, intended to provide a clear legal route, by means of a statutory instrument made under the Act, to deploying commercial passenger services with no human driver, so providing certainty for operators to enter the market. An APS permit for taxis and PHVs in England would be granted by the Driver and Vehicle Standards Agency (DVSA), but only with the consent of the licensing authority for where the service is provided, to ensure consideration is given to local issues relating to policy and standards for taxi and PHV licensing. For services that have been granted an APS permit, taxi and PHV legislation will be disapplied. The APS permitting scheme does not replace the existing licensing routes for passenger-carrying vehicles, instead it sits alongside them as an additional regulatory route specifically for self-driving vehicles.

Disapplication of the standard licensing arrangement for robotaxis is of course appropriate for conditions relating to driver qualifications. But disapplication to other aspects is more problematic. One issue for local authorities considering consent for a robotaxi service relates to the non-driving related roles carried out by drivers of conventional taxis and PHVs. A review commissioned by the DfT has identified no less than 66 such roles, of which 21 were judged challenging or impossible to fulfil in the absence of a driver, for instance helping a passenger using mobility aids get into and out of the vehicle.

Local authorities could take different views about the importance of such non-driving roles, which could affect their willingness to give consent to local permitting of robotaxis, resulting in inconsistent practice across the country. Such considerations could prompt local authorities to limit the scale of robotaxi operations, to ensure the availability of some conventional taxis for those passengers that require assistance; or even to reject robotaxis altogether, having the effect of protecting the employment of taxi drivers – arguably not an aim of public policy. The DfT is planning to issue guidance for consenting authorities, but it seems that they will be allowed wide discretion when considering local issues relating to policy and standards for taxi and PHV licensing

The effect of the proposed regulatory regime for robotaxis is to create a carve-out from the historic regulatory regime for one specific kind of technological innovation. This would leave other innovations subject to historic regulation that is unresponsive to new technologies or business models that could benefit users. Ride-hailing, such as provided by Uber, is the main current instance, but others might yet arise as AI begins to impact on the transport sector.

There is therefore a good case for the reform and modernisation of the regulatory regime for taxis and PHVs to recognise the benefits for users of innovation, both of technology and business models, and to create a level playing field for all kinds of innovators. A duty on regulators to foster innovation would be a desirable measure.

Skills for transport manufacturing

Another new inquiry of the Transport Committee is concerned with skills for the manufacturing of motor vehicles, buses, aeroplanes, trains and ships, as opposed the skills for transport operations, for instance train delays and cancellations due to driver shortages attributed to lack of driver training during the coronavirus pandemic. The latter would be for the DfT, but skills generally are now the responsibility of the Department for Work and Pensions where the skills brief is being tied directly to welfare, employability and economic growth. Moreover, the Transport Committee cites the Department for Business and Trade’s Modern Industrial Strategy, issued in June 2025,in which the aerospace and automotive sectors are picked out for particular attention. So, it is unclear where responsibilities for transport manufacturing skills would fall within government. But the DfT would have an interest in skills relevant to transport decarbonisation technologies, particularly electric road vehicles.

I recently commented on major developments underway in automotive manufacturing that are relevant to future skills requirements. In brief, a potentially major AI application would be commercially viable road vehicle automation, but the slow rate of progress is striking. There is a clash between both the approach to innovation and the organisational structure required for successful digital businesses and that traditionally seen as appropriate for road vehicle manufacture. Hence putting digital and traditional mechanical/electrical engineering technologies together in a single product, the state-of-the-art modern car, has proved difficult. This is particularly so for the legacy auto manufacturers, even at the present early stage of vehicle automation involving driver assistance and ‘infotainment’ – in-vehicle access to media and navigation, often via a personal smartphone. The transition to ‘driverless’ operations would be even more demanding since the solution suppliers are not in a position to fully control the operational environment on roads.

A major complication for the car industry is how, at the same time as pursuing automation, to accommodate the switch to electric propulsion, involving another new type of technology – battery chemistry – with many potentially conflicting requirements including energy storage, rate of power delivery, rate of charging, decline in performance over time, weight, safety and flammability.

The changing nature of the car has implications for the skills of the workforce. The core competences of traditional car manufacturing were internal combustion engine design and manufacture, body pressing (in-house or outsourced), the assembly line, marketing and sales through dealers. Other components were bought in, including electricals, suspensions, brakes, and tyres. The core professional discipline has been mechanical engineering, and the main part of the workforce has been semi-skilled on the assembly line, the requirement for which is lessening with the progressive introduction of factory robots.

The technological developments outlined above imply major changes to professional disciplines and skills, as well as to the management of the integration of digital, electrochemical and traditional technologies. In some cases, the challenges are newsworthy. Recent headlines from a well-informed business publication have included: ‘Toyota’s Internal Inertia Stifles Digital Transformation Effort’. And an industry commentator has observed: ‘For years, Volkswagen’s software unit symbolized everything that went wrong with digital transformation’, the consequence of old structures and cultures, as well as competing power dynamics between traditional managers and digital innovators.

One question that arises is to what extent the workforce should comprise specialists, such as mechanical engineers and operatives, or individuals with broader capabilities, both hands-on production and the ability to see and advocate opportunities for improvement, as for instance the Kaizen concept pioneered in Japan of continuous improvement, requiring the participation of employees at all levels. A related question is the extent to which individuals are attracted to employment in innovative and successful businesses, taking personal responsibility to acquire skills both to gain entry and to advance, as exemplified by a career in medicine; as opposed to acquiring skills while in education from the menu on offer, without a clear idea of ultimate employment.

England has not been effective at implementing apprenticeship schemes. On the other hand, we are successful at getting students into higher education, with almost half of state school pupils having started higher education by age 25 in 2022/23. Yet has been recently reported that the number of roles advertised for recent graduates is down 33% compared with last year and is at the lowest level in seven years, with a lack of entry-level opportunities. This suggests the possibility of creating a graduate entry route into car manufacturing, beyond the traditional management or professional trainee, to encompass those willing to engage in production tasks but with the ability to participate in the process of productivity improvement and integration of diverse technologies.

Arguably, we should follow the example of digital businesses that focus on the rapid adoption of innovative technologies for the kind of success that would attract the most able individuals, in contrast to the state of the UK’s mass production car industry, whose prospects are particularly unclear given the technological changes outlined above, competition from Chinese manufacturers, and the fact that none of the businesses are headquartered in Britain.

Is the Department for Transport fit for purpose?

The recommendations of the Transport Committee from the three inquiries underway are likely to pose an implementation challenge for the DfT if they were accepted, which is why, based on previous experience, many might be side-stepped. Reform of taxi regulation and promotion of joined-up services could be put in the ‘too difficult’ category, while responsibility for manufacturing skills could be directed to other departments.

This brings us back to the issue of both the DfT’s mission, processes, and stewardship. It might be that the Transport Committee needs to look hard at how the DfT operates as much as the individual policies it pursues. That would be a valuable inquiry in its own right and maybe the key to ensuring all its detailed researches bring about some worthwhile changes, rather than the reports being simply noted, and put on the ‘not now please‘ shelf.

This blog post is the basis for a commentary in Local Transport Today of 15 October 2025.

Car useTransport

Excited reports of new applications of Artificial Intelligence (AI) regularly fill the media, yet its technical functionality and prospective impacts are difficult to comprehend. ‘Artificial Intelligence’ is perhaps rather a misnomer, in any case. ‘Machine Learning’ may be better description of its core capability – employing massive computer power, specialist chips and neural net algorithms to absorb, analyse and utilise huge amounts of data and identify meaning and relationships, so as to be able to answer rapidly any questions posed. The most common approach, pioneered by ChatGPT, scrapes vast amounts of written text from the internet to ‘train’ the algorithm, though ‘steal content’ might be a more appropriate label, some believe. 

Other approaches of particular interest included DeepMind’s Alphafold, which absorbs protein structure data, both amino acid sequences and three-dimensional structures determined by physical methods, so as to be able to predict 3-D structures as yet undetermined from known amino acid sequences – a huge achievement for which two Nobel Prizes were awarded. DeepMind has recently used historic weather patterns to match current weather conditions and generate forecasts much faster and more accurately than conventional methods that depend on computer modelling of the atmosphere.

For transport, a potentially major AI application would be commercially viable road vehicle automation through its ‘understanding’ of all possible types of in-motion situations and incidents, but here I am struck by the slow rate of progress compared with other digital implementations. Perhaps the problem is the magnitude and range of behavioural and environmental variant conditions that must be coped with, and the requirement to achieve publicly acceptable rates of error that lead to crashes. Perhaps a new breakthrough in the underlying technology is still needed – the British business Wayve is one to watch, applying AI to automated driving. Or possibly we need to be clearer in how we think about technological innovation and its comparison with equivalent human behaviour.

There is a fairly fundamental distinction in the approach to innovation in digital industries compared with transport technologies and other traditional industries. In digital industries, product lifecycles are short, which means that rates of innovation must be high, so that missing out on even one generation of improvement can be fatal, as Andrew McAfee, an astute academic commentator, has pointed out. Moreover, sustained exponential improvement means that sudden shifts in capability occur, such as computers getting small enough to fit into our pockets, or broadband getting fast enough to permit online meetings without specialised equipment.

All this means that competition between suppliers is intense because potential markets are so large, and since many of these markets are winner-takes-all (or nearly so), coming second is a not a viable strategy. At the same time, there is a rich open-source software movement from which all businesses can benefit. Venture capital is available for tech start ups that promise early returns. The general approach to innovation is to be agile, to aim for the rapid development of a ‘Minimum Viable Product’, the first functional version of a product, designed to be launched quickly and cheaply, to gather user feedback and support. 

In contrast, product lifecycles in traditional industries based on mechanical and electric power engineering, are much longer. The Boeing 747 jumbo jet aircraft, for instance, was manufactured between 1968 and 2023, a 55-year production run, and even now President Trump is acquiring a second-hand model. The life cycle of a car tends to be around 6-8 years between full model changes. Manufacturing techniques are substantially proprietary, with only limited knowledge transfer between businesses. Patient capital is needed but can be hard to find, given alternative uses.

Another distinction between digital and traditional innovations is the scope for cost reduction. Moore’s law reflects the observation that the number of transistors in an integrated circuit doubled about every two years or so, a compound growth rate of some 40%, with commensurate cost reduction. The cost reduction curve for mechanical engineering arises from increased experience of manufacture and refinement of design, which are not transformative of the business. 

Andrew McAfee argues that organisational structures are consequentially different:

Legacy organisationsDigital organisations
hierarchicalegalitarian
collegial, reliant on judgement and expertiseargumentative, reliant on evidence
process-focussed, based on planning and analysisoutcome-focused, based on iteration
myopicoutward-looking
scleroticinnovative
slowfast
brittleresilient

So there is a clash between both the approach to innovation and the organisational structure required for successful digital businesses, and that traditionally seen as appropriate for road vehicle manufacture.

But the operational environment for transport can certainly benefit from AI applications in stand-alone digital technologies such a digital navigation (AKA satnav in the road context), as offered by Google Maps, Waze, TomTom and others. These have penetrated the market quite fast, since the vehicle technology itself does not need to be changed. Similarly for offerings based on digital platforms, which make a market virtually rather than physically, exemplified by online retail pioneered by Amazon, a winner nearly taking all. Uber is an example of a commercially viable application of a digital platform in the transport sector that matches suppliers with customers, although it has only recently become profitable, after experiencing operating losses every year since its founding in 2009.

Yet putting digital and traditional mechanical/electrical engineering technologies together in a single product, the state-of-the-art modern car, has proved difficult, particularly for the legacy auto manufacturers, even at the present early stage of vehicle automation involving driver assistance and ‘infotainment’ – in-vehicle access to media and navigation, often via a personal smartphone. The transition to ‘driverless’ operations would be even more demanding since the solution suppliers are not in a position to fully control the operational environment on roads (adoption of automation in fixed track environments like rail is a much more persuasive concept).

A major complication for the auto industry is how, at the same time as pursuing automation, to accommodate the switch to electric propulsion, involving another new type of technology – battery chemistry – with many potentially conflicting requirements including energy storage, rate of power delivery, rate of charging, decline in performance over time, weight, safety and flammability. In the past, businesses with expertise in battery development and manufacture did not make vehicles, so they either partnered with auto businesses or sold their products into the market. For the vehicle manufacturers, the strategic decision had been whether to partner with a battery maker, who may or may not turn out to have a leading product, or to buy batteries as a commodity in the market, with the possibility of not having access to the best technology.

Battery development itself seems to fall somewhere between the digital and legacy models outlined above. As a field, electrochemistry is relative opaque, with apparently no theoretical framework that would delimit ultimate performance. The cost and speed of development has meant that action has shifted from academic labs, which generally publish their advances, to secretive industrial labs. The UK effort to promote academic research has taken the form of The Faraday Institution that has built a large, collaborative, multi-disciplinary research community, which, however, has as yet to deliver its full potential. 

The challenges faced by traditional car manufacturers generally are exemplified by the emergence of BYD (‘build your dreams’), now maker of the best-selling EVs in China. The business was founded as a battery manufacturer in 1995, buying a small car manufacturer in 2003 and subsequently building an EV product line based on in-house battery technology development, most recently including ultra-fast charging capable of adding up to 470 kilometres of range from a charging session lasting just five minutes. BYD has also announced advanced driver assistance capabilities at no additional charge (unlike Tesla, which makes a substantial charge for such capabilities). Warren Buffett, the legendary US investor, took a significant stake in BYD in 2008 when it was an obscure battery maker, an investment that reflected a prescient judgement and demonstrates the possibility of ‘picking winners’, even in this rapidly developing emergent market.

As well as addressing the strategic imperatives arising from vehicle electrification and automation, car manufacturers must now grapple with the uncertain global economy and in particular the impact of the Trump tariffs on market opportunities and supply chains that had been developed on the assumption of continued globalisation. Moreover, the Trump administration’s aversion to green technologies is a headwind to EV sales in the US.  The task of top management in this business environment is not enviable, and, indeed, the current turnover of CEOs is exceptional.

The incremental improvements that will emerge from strong competition will doubtless benefit consumers, but without being transformative of road travel. The historic transport technologies – railways, the bicycle, the internal combustion engine for a variety of road vehicles, the jet engine – each allowed a step change increase in speed of travel, which in turn permitted a corresponding step change in access to people and places, the true benefit of mobility. Vehicle electrification and automation do not allow a step change in either the speed of travel or in access, so the motivations for adoption are to improve the quality of the environment and of the journey – the latter a choice for consumers to make based on value for money.

A further issue that affects technological innovation is the wish to maximise safety and minimise risk to users and the public by means of regulation. For traditional transport technologies, regulation of vehicles, infrastructure and drivers is well established and improves incrementally. For digital technologies, particularly the application of AI, the speed of development and the commercial imperatives make regulation a contentious matter.  In Britain, we have comprehensive legislation in place to regulate automated vehicles (AVs), the Automated Vehicles Act 2024, based on thorough analysis by the Law Commission. This allocates responsibilities when a vehicle is functioning in self-driving mode, with regulations for implementation intended in 2026, as well as pilots of self-driving taxi- and bus-like services promised for next year.

While admirably clear and comprehensive in the style of traditional transport regulatory legislation, there must be a question as to whether this elaborate apparatus may deter deployment of AVs that exploit fast evolving digital technologies and algorithms, or propose creative novel operational environments. A contrasting approach is illustrated by a paper authored by researchers from Swiss Re, an insurer, and Waymo, Google’s AV business, which compared third party insurance claims, both property damage and bodily injury, for 25 million fully autonomous vehicles miles with a matched human driven mileage, finding a reduction of about 90% for the former. This impressive outcome suggests that standard insurance may be sufficient to ensure adequate safety of AVs, since any shortcomings in performance would result in higher insurance premia.

As noted above, digital navigation (AKA satnav) has quickly and extensively penetrated the road transport sector, the consequences of its benefits for users being available at low or no cost, no interaction with the vehicle’s core technologies, and an absence of regulation. The leading offerings predict journey times and provide traffic-aware route recommendations based on real-time road conditions, utilising data that includes live traffic flow information, incidents, and historical data to predict delays and suggest optimal routes. The providers, such as Google Maps, Waze and TomTom, are reticent about how they do this. So I asked Gemini, Google’s AI tool, how this was achieved, which provided a seemingly full explanation, summarised as follow:

“In summary, Google Maps predicts journey times by:

  • Measuring the distance between the start and end points.
  • Determining the fastest route using algorithms like Dijkstra’s or A*.
  • Applying speed limits for different road segments.
  • Overlaying real-time traffic data from various sources to understand current congestion.
  • Utilizing historical traffic patterns to predict future traffic.
  • Employing machine learning models to analyse and forecast traffic conditions.
  • Considering user-reported incidents and other relevant factors.

The combination of these data points and sophisticated algorithms allows Google Maps to provide highly accurate and dynamic journey time predictions that adapt to changing conditions. The accuracy can still be affected by unforeseen events or the availability of real-time data in certain areas.”

I wondered whether more might be learned from DeepSeek, the Chinese AI app that requires much less training effort and cost than its rivals, and offers as an option more insight into the ‘thought’ processes involved. Deepseek’s answer begins:

“Okay, so I need to figure out how Google Maps predicts journey times. Let me start by recalling what I know. I use Google Maps a lot, and it usually gives me an estimated time of arrival that’s pretty accurate. But how does it do that? I guess it’s not just using the current traffic, right? There must be more to it.

First, maybe they use the speed limits of the roads. Like, if a highway has a speed limit of 65 mph, they might calculate the time based on that. But that seems too simplistic because traffic varies. Sometimes you can go faster, sometimes slower. So maybe they also look at real-time traffic data. I remember that Google collects data from people’s phones using the Google Maps app. If lots of people are on a particular road and their phones are moving slowly, Google can tell there’s a traffic jam and adjust the estimated time accordingly. That makes sense…..”

Deepseek concludes:

“To sum up, Google Maps likely uses a combination of real-time traffic data from GPS signals, historical traffic patterns, road characteristics (speed limits, type of road), user-reported incidents, and possibly external factors like weather and events. Machine learning models process all this data to predict how long a journey will take, considering the best route based on current and predicted conditions.”

Regrettably, this discursive conversational ‘exposure’ of thought process adds almost nothing, although both Gemini and Deepseek mention the use of machine learning. What does not emerge is the nature of the core requirement for predicting optimal routes and journey times in different and dynamic circumstances, which must be a real-time model of the road network and the vehicles travelling thereon. This might be termed a ‘digital twin’, a concept of growing interest, although at present this is largely limited to machine and asset performance monitoring.

A Digital Roads of the Future project, based at Cambridge University, is exploring how digital twins, smart materials, data science and robotic monitoring can work together to deliver resilient roads that can measure and monitor their own performance over time, to make the highway system safer and greener. However, this does not extend to consideration of real-time traffic conditions and the responsive behaviour of traffic.

A recent report on the potential economic benefits of digital twins, commissioned by the Department for Transport, suggested a figure of £110 million (present value over a ten-year appraisal period) for network capacity management through reduced congestion under business-as-usual conditions. Yet the possible complementary contribution of existing digital navigation providers was not considered

It seems that the providers of digital navigation are well advanced in modelling road network performance through digital twin construction of some kind, and application of the relevant rapidly-gathered real time data. What I find remarkable is the disregard of these ‘commercial’ developments by the research community. I am aware of only four relevant papers in the research literature, three of which I authored. Two are case studies (this and this) of the impact of ‘smart motorway’ schemes that failed to deliver expected benefits.

The third, my summary paper, identifies three behavioural changes as a result of the wide use of digital navigation:

  • diversion of commuters and other local traffic to take advantage of faster travel made possible when the capacity of major roads is increased, thus pre-empting space intended for longer distance business users;
  • diversion of traffic from congested major routes to minor roads, previously used only by those with local knowledge;
  • the prediction of journey times under expected traffic conditions helpfully reduces uncertainty of time of arrival, which road users regard as the main detriment arising from road traffic congestion.

The fourth published paper is by authors from DeepMind, the London-based AI business, acquired by Google in 2014, who employed machine learning to improve the performance of Google Maps by comparing predicted journey times with outturn as observed at the end of a trip, and modifying the calibration of the model to bring these into line. This is a rare example of comparison of prediction with outturn for a transport model, with the aim of improving and better validating the model for future use.

This lack of consideration of the impacts of digital navigation applications in the peer-reviewed academic literature is remarkable, given the vast number of papers that model the expected impact of AVs (despite the present paucity of observation data) and the sizable number that discuss the impact of ride hailing (exemplified by Uber). It is equally surprising that road authorities disregard the impact that digital navigation is having on their networks, and the opportunities that likely exist for beneficial collaboration with the digital navigation providers. There is low-hanging fruit here, ripe for picking, unencumbered by regulatory barriers, new infrastructure requirements or significant public expenditure, given that the technology is already in place and in use by millions of road users. A potential boost to economic growth at low cost – what’s not to like?

One encouraging development is that consultancy SYSTRA is to use TomTom’s digital maps, location technology and traffic analytics to build transport models that replicate real-world traffic conditions, these to be used to perform analyses on the potential impacts of infrastructure investments, schemes and policies, and to support clients in evaluating outcomes. Orthodox transport modellers will surely need to consider whether their traditional approaches can compete with dynamic models like these, based on huge data inputs analysed by machine learning. If one element of the new digital technology era is a harbinger of significant change to current transport planning practice, this is surely it.

This blog post is the basis for an article in Local Transport Today of 17 July 2025.

EconomicsTransport

The outcome of the government’s current Spending Review is due to be announced on 11 June. It will set spending plans for a minimum of three years and will prioritise delivering the government’s missions. Departments will be expected to make better use of technology and seek to reform public services, to support delivery of the government’s plans for ‘a decade of national renewal’.

The intention is ambitious: ‘This will not be a business-as-usual Spending Review. The government has fundamentally reformed the process to make it zero-based, collaborative, and data-led, in order to ensure a laser-like focus on the biggest opportunities to rewire the state and deliver the Plan for Change.’

In support of this approach, the former National Infrastructure Commission has been transmuted into the National Infrastructure and Service Transformation Authority (NISTA), with a remit to support the implementation of a 10-year infrastructure strategy. NISTA is a joint unit of the Treasury and Cabinet Office whose aim is to unite long-term policy and strategy with best-practice project delivery, so as to transform the delivery of infrastructure, service transformation and other major projects, to ensure the government’s investments are driving growth and delivering the government’s missions. The newly announced CEO of NISTA is Becky Wood, a civil engineer by profession, whose experience includes a decade-long role at the Department for Transport (DfT), where she acted as senior responsible officer for major projects such as Crossrail, Thameslink and the Intercity Express Programme.

As well as these spending and organisational developments, a number of Departmental permanent secretaries are stepping down, including Dame Bernadette Kelly who has been at the helm of the DfT for the past eight years. There will be new leadership, but whether with transport experience remains to be seen.

So we could be about to see a substantial change in approach to transport investment, to reflect both the government’s enthusiasm for infrastructure investment to boost economic growth and for new approaches to achieving better outcomes, as well as to remedy the DfT’s past shortcomings in managing investment, which led to the truncation of HS2 and the abandonment of the Smart Motorway programme. On the other hand, transport investment is a tanker that is very slow to turn around, with many parties benefitting from present arrangements, so we might well end up with more of the same, with only cosmetic changes.

I want here to consider the DfT’s record in planning and managing road and rail investments, both competence and the benefits achieved, to assess whether the Department is likely to be fit to continue to manage very large investment programmes. As a former civil servant, I am aware of the difficulties in assigning responsibilities, given the central role of politicians with manifestos to be implemented, and also given unanticipated events, of which the covid pandemic is a good, albeit extreme example. Nevertheless, if decisions are to be ‘robust’ (a favourite appellation), a government department must be able to successfully navigate these swirling currents. Too long a list of crashes and wrecks must raise doubts about competence and general approach.

National Audit Office

The National Audit Office (NAO) provided an overview of the DfT for the new Parliament in November 2024, a good place to start. The NAO is the one body to offer a comprehensive and rigorous assessment of the performance of each government department, pulling no punches.

The NAO records that for 2023-24, overall net spend by the DfT was £44.3 billion, comprising:

  • the largest area of spend was on rail (£29.9 billion), most of which was on infrastructure management and enhancements delivered through Network Rail (£18.2 billion) and High Speed Two (HS2) (£8.5 billion). A further £2.6 billion was spent on subsidies and support for passenger train services. There were also book losses of £2.2 billion arising from the cancellation of Phase 2 of the HS2 programme and changes to how the redevelopment of Euston station would be delivered;
  • strategic road management and enhancements in England through National Highways (£7.1 billion);
  • funding to local authorities in England for their management of local transport (£6.1 billion), including road maintenance, bus subsidies and concessionary fares.

The NAO has assessed the nine principal risks faced by the DfT and its arm’s-length bodies. This is a formidable list, of which only a couple of items have decreased in severity in the past year. Particularly relevant to the investment programme are the Department’s inability to deliver its major projects to time or cost or deliver the expected benefits; inability to deliver sufficient carbon savings, inability to adequately maintain infrastructure, and to make adequate forecasts of future travel demand or changes in the transport system, thus resulting in ineffective decision making.

Noteworthy observations from the NAO overview include:

  • Although the DfT had identified key problems that needed to be addressed by Rail Reform, it had not been able to translate this into a programme it could implement. DfT had committed to a timetable that it had identified as high-risk, reflecting ministerial ambition, but without a clear plan for what it needed to implement.
  • Delays to projects on the strategic road network meant they would cost more and take

longer to deliver than planned. National Highways could have done more to plan for and manage the risks arising from the portfolio.

  • DfT does not have a good enough understanding of the condition of local roads and does not use the limited data it has to allocate its funding as effectively as possible.

The findings of earlier NAO reports are also relevant:

  • In 2019, the NAO concluded that the road tunnel proposed for the A303 near Stonehenge had a significantly lower benefit–cost ratio than is usual in road schemes; given experience of cost increases on projects of this kind, this ratio could move to an even lower or negative value. In the event, the new government cancelled the project in July 2024 due to cost concerns and a need to address public finances.
  • In 2022, the NAO reported that by 2025 National Highways will have completed less work on road enhancements comprising the RIS2 programme and at a higher cost than originally planned. National Highways and DfT could have done more to plan for and manage the potential risks to their portfolio of enhancement work.
  • In 2023, the NAO found that the rationale for East West Rail did not rest on the strength of the benefit–cost ratio for the project alone – which is poor – but on its wider strategic aim of overcoming constraints to economic growth in the Oxford–Cambridge region. Achieving the necessary value from the government’s investment in East West Rail will require stronger strategic alignment across government.

Office of Rail and Road

Another source of judgement of the performance of the DfT’s operational organisations is the Office of Rail and Road (ORR). In its most recent annual assessment, National Highways was found to be at risk of not being able to fully deliver the expected benefits of the RIS2 (2020-25) investment programme for road users and taxpayers, with four of its 12 key performance indicators below target or off track. There continue to be large variances between the company’s planned and actual renewals programme, without a clear explanation as to the cause. The consequence is that National Highways has needed to take account of a gap of £919 million between its Statement of Funds Available for the five years of RIS2, and the funding available within DfT business plans for Year 4 and Year 5. Moreover, the ORR found that National Highways was non-compliant with its licence in respect of the provision of data and information to allow the ORR to perform its statutory duties, to protect the interests of road users and ensure the efficient spend of public money.

Rail investment

Professor Steven Glaister, former Chair of the ORR, has recently discussed the prospects for the planned reform of the railways. He identified a crucial requirement: finding enough public money to meet everybody’s aspirations for a cheap, high-quality service. Yet he recognised that roads were providing for nine times the mechanised movement as rail, so that in the current financial climate it seems more likely that the level of financial support for rail will fall rather than be increased in the near future.

The DfT has recognised the problematic case for rail investment. In its 2021 Integrated Rail Plan for the North and the Midlands, it noted that rail schemes in the North are at increased risk of being considered poor value for money when applying conventional cost-benefit analysis, driven in part by smaller city populations, different travel patterns, as well as the general high cost of building rail infrastructure (p98).

In the same DfT document, it was also recognised that ‘Over the last 50 years the time people spend travelling has remained relatively constant, though distances travelled have increased . . .Overall, people have taken the benefits of better transport links as the ability to access a wider range of jobs, business and leisure opportunities, rather than to reduce total time spent travelling.” (p39).  It is, however, noteworthy that the DfT has not seen fit to revise its Transport Analysis Guidance, to reflect this recognition of the importance of access as the long run benefit of transport investment.  

In my recent book, Travel Behaviour Reconsidered in an Era of Decarbonisation, I endorse the DfT’s insight that enhanced access is the main benefit of transport investment, not travel time savings upon which almost all orthodox investment cost-benefit analysis is based. One crucial difference is that access benefits are subject to diminishing returns, which put a natural limit to transport investment, whereas time saving are subject to no such limit.

There is a distinction to be made between, on the one hand, most areas of national infrastructure where a good case can be made for more investment – electricity supply and distribution, water and waste services, fast broadband, flood defences; and on the other hand, transport infrastructures – road, rail, airports – which are, arguably, substantially mature, with limited benefits from additional capacity on account of diminishing returns.

Transport decarbonisation

Decarbonisation is a policy central to the government’s agenda. Legally-binding carbon budgets are a key metric, used to measure progress to achieve Net Zero. The DfT’s Transport Decarbonisation Plan of 2021 set out estimations of the carbon savings planned to be achieved over the period 2020-2050, including 1-6 MtCO2e arising from increases in active travel, 21-22 MtCO2e from railway electrification, and 620-850 MtCO2e from zero emission cars and vans. What was not discussed were the increased carbon emissions from new transport infrastructure, both from increased volumes of oil-fuelled vehicles and from embedded carbon in materials such as concrete and steel. The disregard of these additional sources of carbon has been justified at the level of the individual road investment project as ‘de minimis’. Yet the aggregate of such projects forming a road investment programme must be substantial.

The latest National Networks National Policy Statement, issued at the tail end of the Conservative government, continued the project-level focus on carbon emissions, not precluding schemes with net increases, and not requiring assessment of emissions at programme level. There is a legal challenge underway which, if successful, could change the situation. But the concern is that the conflict between new road construction and climate policies is neither made transparent nor resolved. In the meantime, the DfT’s methodology for assessing project carbon emissions focuses on improving cost-effectiveness, for example by estimating the monetary value of wider social benefits per tonne of CO2e emitted. But this does not provide any constraint on investment in new road capacity to align with climate change objectives.

I have previously pointed out the conflict between the government’s support for additional airport capacity and its climate change objectives – another failure to reconcile policy ambitions.

Conclusions

The failures and inconsistencies of the DfT’s policies and practice for major infrastructure investment are numerous and noteworthy, raising a question of the Department’s fitness for purpose. As a point of comparison, we might consider Transport for London, generally considered a world-class regional transport authority, responsible inter alia for planning and execution of major projects.

Not everything has gone to plan for TfL, notably Crossrail for which had a cost overrun of £4 billion, and which opened three and a half years later than planned. This arose in part from the challenges of tunnelling under central London, enlarging existing stations to take double length trains on new platforms, and the need to operate rolling stock with different power and signalling systems for the underground and surface segments. Nevertheless, the scheme once opened has been admired for its design – it won the 2024 RIBA Stirling Prize, the prestigious annual award that recognises the UK’s best new architecture. And the Elizabeth Line, as it is now named, is very popular with users, increasing London’s rail capacity by about 10% and reducing journey times.

A contrasting success has been TfL’s creation of the Overground from a disparate collection of underused rail assets. As well, TfL has successfully modernised much of the Underground, and has introduced the central London congestion charge, the city-wide Ultra Low Emission Zone, a single ticketing system for all modes of public transport and the ‘touch in/touch out’ contactless payment system.

As a former London deputy mayor for transport, Heidi Alexander, the present Secretary of State, is well aware of TfL’s strengths and achievements, as is her rail minister, Lord Hendy, a former TfL Commissioner. It would probably be regarded as going too far to propose outsourcing the DfT’s infrastructure planning and execution responsibilities to TfL, putting transport professionals in charge, rather than generalist civil servants advised by blinkered economists. Nevertheless, further devolution of responsibility for London’s commuter rail lines to TfL would make good sense. And conceivably, NISTA could bring to bear a more effective approach to planning transport infrastructure improvements.

EconomicsTransportTravel

A surprising feature of the new Labour government is its enthusiasm for new airport capacity, notwithstanding its commitment to a pathway to net zero greenhouse gas emissions by 2050. The primacy of economic growth, so strongly espoused by the Prime Minister and his Chancellor, have been summoned to logically justify this approach – both as a practical measure, and a signal to prospective investors in the UK economy that ‘we are open for business’ – even despite the adverse climate change consequences. The economic case itself, however, is very questionable.

This initiative began with a speech on 29 January by Rachel Reeves, Chancellor of the Exchequer, in which she backed a third runway at London’s Heathrow Airport as part of the re-booted plan to get the UK’s sluggish economy growing. She also supported expansions at Luton and Gatwick airports, a stance formally endorsed by Heidi Alexander, Secretary of State for Transport,who appears to not have been the principal decision-maker in these matters.

The airport expansion plans for which ultimate ministerial consent are required are these:

  • Heathrow: the government has invited proposals for a third runway to be brought forward by the summer. The number of flights, presently capped at 480,000 a year, could increase to 720,000. Currently the airport serves more than 80 million travellers a year with its four passenger terminals and two runways, but eventually should be able to accommodate up to 140 million passengers a year, once the third runway is in operation.
  • Gatwick: the Secretary of State has issued a ‘minded to approve’ letter for the Northern Runway Development Consent Order (DCO), subject to the outcome of further consideration of operational controls on the scheme. This proposal involves repositioning an existing runway by 12 metres to allow dual runway operations. This runway is long enough for typical short-haul passenger jets and will increase the airport’s annual number of flights to 380,000 from the present 260,000, with passenger numbers going up from 45 million to 75 million a year.
  • Luton: the Secretary of State has granted a DCO that covers a new terminal (but no new runway), which could increase passenger capacity from 18 million to 32 million per year.
  • Stansted: the government has welcomed Stansted’s £1.1 billion investment to extend its terminal. It already has permission to grow to 43 million passengers a year, from the current 29 million.
  • London City: the government has approved plans to expand to 9 million passengers per year by 2031, from 6.5 million currently, but with no increase in the number of flights.

The Department for Transport plans to review the Airports National Policy Statement (the current version dates from 2018), including its compatibility with climate change obligations. Ensuring compatibility with climate change obligations will not be a trivial task, as is evident from the most recent report of the independent Climate Change Committee (CCC), proposing the Seventh Carbon Budget covering the five years 2038-2042.

Carbon Budgets

The UK’s Climate Change Act 2008 sets the framework for action to address climate change mitigation and adaptation. The Act requires the government to propose regular, legally binding milestones on the way to achieving Net Zero greenhouse gas emissions by 2050, known as carbon budgets. The CCC is required to advise the government on the level of these. Parliament must then agree each carbon budget for it to be set into law. To date the government has always followed CCC advice on the major decisions, including the level of the six legislated UK carbon budgets.

However, the government’s most recent Carbon Budget Delivery Plan, for the Sixth Budget, has been subject to successful legal challenge on the grounds that inadequate consideration had been given to the risks involved in delivery, assuming mistakenly that the policies would be delivered in full. The outcome is that the government has to lay before Parliament a fuller report dealing with the risks involved.

The CCC’s approach to carbon budgeting is to propose a ‘balanced pathway’, based on detailed expert analysis of options and extensive modelling. The treatment of aviation in the Seventh Carbon Budget has the following main features:

  • Aviation demand can only grow if aviation sector technology roll-out progresses and begins to abate and offset aviation emissions, with demand management playing an important role in the 2020s and 2030s while availability of Sustainable Aviation Fuel (SAF) and permanent engineered carbon removals are both still limited.
  • As a result, budgeted per-capita passenger-kilometres remain relatively flat between 2025 and the early 2030s. As SAF and engineered removals become more widely used from the mid-2030s, demand then grows from this point. This growth is conditional on these technologies developing as projected. Thus, compared to 2025 levels, aviation passenger demand is projected to increase by 2% by 2035 (to 319 million passengers), 10% by 2040 (to 345 million passenger), and 28% by 2050 (to 402 million passengers). 
  • Aviation will be the UK’s highest-emitting sector by the Seventh Carbon Budget period. The largest share of emissions reduction by this time comes from managing forecast aviation demand growth. This is followed by SAF uptake, efficiency improvements, and the roll-out of hybrid-electric aircraft and battery-electric aircraft.
  • The cost of decarbonising aviation and addressing non-CO2 contributions to climate change is expected to be reflected in the cost to fly. This will help manage growth in aviation demand in line with Net Zero.

It does not need detailed analysis to see that the government’s vision of substantial expansion of airport capacity is very much at odds with the CCC’s proposals for demand management to achieve climate change objectives. This discrepancy could be difficult to deal with in the government’s plan to achieve the Seventh Carbon Budget in a way that would be proof against legal challenge.

One key risk concerns the availability and cost of Sustainable Aviation Fuel, a topic on which both the Department for Transport (DfT) and the CCC have similar aspirations. SAF is produced from biological feedstocks, at present mainly used cooking oil and animal waste fat, and is sufficiently similar to standard jet fuel to be used in existing aircraft. Other biological sources are being explored. At present, costs of SAF are higher than for kerosene and supplies are limited.

To incentivise the development of SAF, the DfT is creating an SAF Mandate, which will set a legal obligation on fuel suppliers in the UK to supply an increasing proportion of SAF over time. In 2025, the obligation is set at 2% of the total fossil jet fuel supplied, and will increase annually to reach 10% in 2030 and 22% in 2040. In addition, the Department is currently consulting on how best to support the UK SAF industry by a ‘revenue certainty mechanism’ that will help producers get the investment they need to ramp up the production. The DfT’s position that this mechanism should be funded by industry, consistent with the polluter pays principle, and that the preferred approach is to introduce a levy on suppliers of jet fuel. The outcome of the consultation will be enacted in legislation.

The DfT’s aspiration for a 22% share of jet fuel derived from sustainable sources by 2040 falls short of what would be required for complete decarbonisation by 2050, and in any event must depend on whether SAF providers are able to locate biological sources of supply and reduce costs to allow this fuel to be commercially viable, mandate or no mandate. This is an important source of uncertainty which the government will need to address in formulating its Seventh Carbon Budget in a way that will be proof against legal challenge.

Demand management

The uncertainty as regards SAF supply prompts the need to consider demand management of air travel more seriously than the UK government has so far, to have any real prospect of aligning with the Climate Change targets. I set out the argument succinctly in a letter that was published in The Economist of 22 February:

‘It is understandable that Heathrow and other UK airports in private ownership would wish to increase passenger numbers, revenues and profits. But this is not in the national interest in an era of decarbonisation.

‘The crucial fact that most air travel is for leisure. Even at Heathrow, only around a quarter of passengers are travelling on business. There is therefore ample opportunity for business travel to increase, displacing leisure travellers to other London airports with spare capacity, and beyond.

‘This will happen through market forces since business travellers will pay a premium for the advantages of Heathrow. Eventually, all spare capacity at UK airports would be taken, and then the lowest value flights would be priced off, such as the weekend jaunts by stag and hen parties to convivial continental cities.’

To illustrate how market forces work, consider a trip to India. Suppose I am flying on business for a short stay, my organisation paying the cost. Living in London as I do, I would fly from Heathrow direct to the airport nearest my destination, where I would arrange to be collected by car. On the other hand, if I am going on a longer holiday trip, paying out of my own pocket to travel economy class, I would shop around for the lowest cost route. I would quite likely fly via one of the Middle East hubs, taking longer but costing less, with the possibility of arriving at an airport nearer my final destination. With Emirates, for instance, I might still depart from Heathrow, but also could leave from Gatwick or Stansted, as well as from Birmingham or even Manchester. I would expect the cost of these alternative options to reflect the lesser demand from business travellers using these airports.

If demand for air travel continued to grow, eventually spare capacity at UK airports other than Heathrow would be used up. Then market forces would result in increases in prices charged by airports (and increases in their profits), which would deter the marginal traveller, such as such as discretionary low-budget short-duration leisure tripsabroad, taking advantage of the present availability of low-cost flights outside the main season for tourist travel. Some increase in the cost of leisure air travel could be expected to increase the attractions of domestic destinations, probably with rather little loss of enjoyment and a greater benefit to the UK economy.

To put some numbers to the argument: survey data collected by the Civil Aviation Authority for 2023 shows that at the UK’s eight main airports, 57% of terminal passengers were UK residents on leisure trips, and 30% were overseas residents traveling for leisure purposes. Only 14% of journeys were for business purposes. Even at Heathrow, only 19% of passengers terminating at that airport were travelling on business.

In absolute terms, business travellers terminating at Heathrow totalled 14.9 million in 2023. This compares with 20.3 million in 2019 and 20.7 million in 2015. So there is no growth trend of business travellers at this hub airport. Indeed, there is indication of a substantial change of practice resulting from the coronavirus pandemic, where the combination of working from home, experience of remote business meetings, and environmental concerns, have greatly reduced the amount of business travel, particularly short trips to EU countries.

Economic case

The Chancellor, in her 29 January speech, asserted that third runway at Heathrow would unlock further growth, could create over 100,000 jobs, and, according to a recent study from Frontier Economics, could increase potential GDP by 0.43% by 2050. However, this study, commissioned by the owners of the airport, is based on a black box proprietary model of the whole economy, of the kind that gained little credence previously, including past analysis by the Airports Commission of the case for a third Heathrow runway.

The economic case for a third runway must be based on the need to accommodate growth of business travel, in order to increase opportunities for British companies in export markets, foster inward investment to the UK, facilitate the growth of London and the South East as a place for doing business, and promote London as a world city for finance, media, education, tech and other specialisms. But with the present lack of growth of business air travel and the headroom of capacity for any future growth by displacing leisure trips, the national interest in additional airport capacity is far from being established.

Hospitality, entertainment, high-end retail and other businesses benefiting from inbound tourism would doubtless welcome increased airport capacity. However, UK visitors going abroad spend more than twice as much as overseas visitors to the UK – £62290 million against £28358 million in 2019 (ONS data). So increasing airport capacity is very likely to drain spending from the UK economy, which could detract from economic growth.

Given the unconvincing economic case and the conflict with policies to achieve Net Zero, why the enthusiasm amongst at least some government ministers for airport expansion? The explanation could reflect how desperate the Labour government is to boost economic growth, both to increase living standards and to raise tax revenues to fund increases in public expenditure, with a new requirement for higher defence spend. But the levers available to ministers are limited in scope and slow to act. So the positive stance toward increasing airport capacity serves to send a signal of intent, with no cost to the Treasury since airports are in the private sector.

Whether individual airport expansions go ahead will ultimately depend on commercial decisions by the owners, regardless of supportive government statements. The key question is whether the investment can be adequately remunerated by increased turnover in a market in which airports are in competition for airlines and their passengers. The business model takes account of landing and take-off fees charged to the airlines, and associated income from catering and retail concessions in the terminals, car parking and other trading in and around the airport. With one exception, airports can set their own charges for use. But charges at Heathrow are regulated by the Civil Aviation Authority on account of this airport’s dominant position. Currently charges are capped at about £25 per passenger, high by international standards.

The cost of a third runway at Heathrow was originally put at £14 billion in 2016, but this did not include the consequential adjustment and enhancement to surface transport,including putting a section of the M25 Motorway in tunnel. And for such a major construction project, there must be substantial risk that initial cost estimates are pitched too low, to get the proposal committed and underway, after which further cost are likely to be identified – as has been the HS2 experience. Accordingly, the owners will doubtless want reassurance that this expenditure can be recovered in higher passenger charges. But the airlines would be likely to oppose this since it would make their investment in Heathrow routes less competitive. BA would also oppose because expansion would be likely to lessen its dominance and pricing power at Heathrow. Under present arrangements, the CAA would need to adjudicate.

Also lying in wait on the critical path will be the updated Airports National Policy Statement, the government’s decision on implementing the Seventh Carbon Budget, and a planning inquiry into the detailed proposal for Heathrow expansion. For all the government’s talk about speeding up the planning process, with new legislation recently introduced to achieve this, the outcome of this particular scheme seems exceptionally uncertain.

From the point of view of both economic and climate policy, the case for a third runway at Heathrow looks highly unconvincing. And the commercial viability seems decidedly problematic. It is therefore good that some proper scrutiny is now going to be given by the House of Commons Environmental Audit Committee, which has launched a new inquiry to examine whether expansion of airport capacity can be achieved in line with climate and environment goals.

This blog post is the basis for an article in Local Transport Today, 1 May 2025.

Car useTransport

In general, transport in the UK has been regarded as a well-regulated sector. It is not surprising, given the obvious potential for public harm, and the high profile of any errant behaviour or system failures. Vehicles, drivers, infrastructure, and service provision by operators are all subject to safety and customer protection regimes. But technology and business practice move on, generating new issues to be addressed. Generally, this happens on a rather piecemeal basis when new modes, technologies, or commercial models emerge, but not always then.

Accordingly, under the Boris Johnson government, the Department for Transport launched its Future of Transport Regulatory Review in 2020 in the form of a call for evidence, initially focused on three areas: micromobilty; flexible bus services; and Mobility as a Service. Other topics that have been considered under this broad initiative included the future of flight, and modernising road vehicle standards. There has also been a look at ‘regulatory sandboxes’ as a means to introduce temporary or specific place-based regulatory flexibilities to support innovation. Yet addressing such topics ad hoc seems to have so far yielded little in the way of useful regulatory advance in any of these fields, let alone others of concern such as secure digital payment systems, customer data protection, and standards of information provision, for example.

One area that has been subject to full consideration is the regulation of automated road vehicles (AVs), an area where the last government seemed to believe there to be a major new industrial development and employment opportunity. The Law Commission was asked to recommend a regime to govern responsibilities when vehicles are operating in driverless mode, whether as ‘robotaxis’ or individually owned vehicles. The outcome was the Automated Vehicles Act 2024, which had broad political support. There is now in place a comprehensive legal framework that developers, operators and insurers of AVs might see as helpful in making clear their legal responsibilities, which, however, might be seen as quite onerous compared with arrangements in countries where the main development of the technology is taking place, the US and China in particular. UK developers of AVs are limited in number and their commercial prospects are unclear.

To be sure, the regulatory regime being put in place for AVs is forward looking and intended to encourage innovation. But the implications for the wider transport system and the management of the road network as a whole, particularly in urban areas, are consequential matters that also need careful consideration, a topic recently reviewed by the International Transport Forum and the subject of an exploratory project report by the National Infrastructure Commission.

Another fast-moving technological development area is aviation. Here a comprehensive sectoral regime operated by the Civil Aviation Authority is well established to oversee safety, security, the efficient use of airspace for maximum public benefit, and to protect the consumer interest. The CAA has set up an ‘innovation hub’, the purpose of which is to create an environment where innovation in aviation can develop in line with the CAA principles. These include ‘pilotless‘ planes and drones. A recent review endorsed the view that CAA is a world class regulator that is fit for purpose, delivering high quality services to the aviation and aerospace industry and the consumer. Moreover, the CAA and DfT are consulting on the creation of a new UK Airspace Design Service that would act as a single guiding mind for modernising the design of UK airspace, exemplifying the CAA’s proactive approach to innovation.

A further sector-wide regulator is the Office of Rail and Road, which originally was solely charged with regulatory oversight of railways, including holding Network Rail to account for stewardship of its network, its funding, as well as protecting the consumer interest in respect of services provided by the train operating companies. The ORR carried out a consultation in 2015-16 on its approach to innovation, following a prompt from the government. The ORR has taken the view that innovation is led by the rail industry and where appropriate it would be supported by the overall regulatory framework, including the duty to promote improvements in railway service performance and promote efficiency and economy on the part of providers of railway services. So, compared with the CAA, the ORR’s approach is relatively passive.

Since 2014, the ORR also has some oversight of roads, but this is limited to the engineering performance and efficiency of National Highways in England in respect of its network, not to other roads. The ORR’s remit does not allow it to address the benefits to road users of new road investments – whether the outturn from investment in new road capacity meets expectations – nor whether the strategic road network is being efficiently utilised (unlike the CAA’s concern with the efficient use of airspace). Again, there is a lack of intention actively to foster technological innovation for the strategic road network, or to analyse and prioritise the optimal use of capacity, and identify where enhancement is most justified.

For road vehicles more generally, there are important examples of regulatory approaches that both drive and support technological innovation. Tackling the harms from tailpipe emissions of petrol and diesel enginned vehicles has been effected by regulations within the portfolio of the Department for Transport that have driven down emissions of air pollutants and by the ZEV Mandate, a legal requirement for a minimum percentage of each manufacturer’s new car and van sales to be zero-emission each year.  Regulations made by local authorities to create urban clean air zones (in London known as the Ultra Low Emission Zone) also help incentivise the switch to electric propulsion, a once-in-a-century transport technology innovation. While the propulsion systems and physical impacts of individual classes of vehicles are a DfT matter, concern for overall emissions and air pollution lie elsewhere – with the Department of Environment, Food and Rural Affairs (Defra) and Department for Energy Security and Net Zero (DESNZ).

When it comes to new modes of travel, the Department for Transport again seems to be following rather than leading, with actions in fits and starts, for example in making regulations allowing trials of rental e-scooters to be fast tracked and expanded in response to proposals from local authorities. The intention is to understand usage, safety, and environmental impacts, and to explore changing travel patterns since the coronavirus pandemic and as e-scooters become more embedded in public life. Only e-scooters participating in official rental trials may be used legally on roads. It is expected that a decision will be made in due course about legalisation of e-scooters as a vehicle class, and about the appropriate regulatory regime, which may include a requirement to park rental e-scooters in prescribed bays. E-bikes are already legal and treated as ordinary bicycles if of limited power, but the problem of inappropriately parked dockless rental e-bikes prompts complaints and pressure to regulate.

In contrast to the supportive approach to e-scooters, and a permissive approach to e-bikes, as innovative mobility technologies, there has been inaction in several other significant areas. This includes updating the historic taxi and private hire legal regime, with minimal recognition by the authorities of the merits of ride hailing as an innovative means of summoning a taxi, exemplified by Uber’s struggles to get acceptance in London. This involved a number of court cases, which found in favour of Uber, while the company lost some other cases concerned with the employment status of drivers, which nevertheless has not seemed to impact on the provision of the service. Uber’s digital request and booking/payment system has proved very popular with users as a better means of getting a taxi compared with licenced black cabs or conventional private hire vehicles, as well as being sufficiently attractive to drivers so as to offer customers an acceptable level of service. But this outcome was no thanks to a taxi regulatory regime having a remit to foster innovation. On the contrary, taxi regulation is historic, not modernised for the digital age, rightly concerned with the protection of customers, less defensibly having the effect of protecting the trade of established black cab drivers. There is a marked contrast between this reluctance to welcome innovative approaches to taxi services and the progressive stance towards automated vehicles, including robotaxis.

In terms of road usage, beyond the urban areas where e-scooters and ride hailing taxis operate, regulation of the inter-urban system roads is confined to vehicle and driving licence holding, vehicle type approval and performance – handled by a number of specific agencies like DVLA and DSA – with speed limits and other rules of the road embodied in the Highway Code – an historic regime that has not generally recognised advances in innovative technologies.

One technological innovation that has been widely adopted is digital navigation, applicable to all travel modes to replace conventional maps. In the road context, this is generally known as satnav and is offered by a number of providers including Google Maps and Waze via free-to-use smartphone apps, and others who provide input to equipment installed by vehicle manufacturers. A key element of many of these offerings is to indicate the fastest route in the light of prevailing traffic conditions. Digital navigation is changing the way drivers use the road network in three main ways: local users are attracted to new capacity on major roads, pre-empting the additional capacity intended for longer distance business users and so weakening the economic case for the investment; longer distance users can divert to local roads that offer faster journeys than on congested major routes, roads that are well suited to active travel; and predictive journey time information allows more efficient use of the network.

At present, provision of digital navigation is a free-for-all, funded by sales of direction-finding to businesses that wish to attract clients to their premises, as for Google Maps; or by the sale of services to vehicle manufacturers that fit navigation as original equipment, as for TomTom. Road authorities generally seem to be paying little if any attention to these developments. Yet there are opportunities being overlooked to make better use of the road network, both urban and inter-urban, including buses services.

Curiously, legislation has long been in place to allow providers of digital navigation to be regulated. This dates back to 1989 and requires what were then termed ‘dynamic route guidance systems’ that take account of traffic conditions to be licensed by the government. The intention was to facilitate the introduction of a pilot route guidance system, known as ‘Autoguide’, that had been developed by the government’s Transport and Road Research Laboratory and required roadside equipment to be installed – a good example of forward-looking regulation to support innovation. The licence could include conditions concerning the roads that should not be included in the route guidance, the provision to road authorities of information on traffic conditions, as well as the right to install roadside equipment. In the event, the Autoguide pilot did not proceed, due, I suspect, to the limited computing power available at that time. Nevertheless, the legislation has remained on the statute book although no licences have been applied for or granted.

The possibility of achieving more efficient use of the road network through provision of better information about traffic conditions to both road users and road authorities was recognised early on by John Wardrop, a traffic analyst at the then Road Research Laboratory, in a seminal paper published in 1952. He postulated two equilibria. The first states that, under equilibrium conditions, traffic arranges itself in congested networks in such a way that no vehicle can reduce its costs (time and money costs) by switching routes. For this to happen in practice, drivers would need to have perfect knowledge of all feasible routes and travel times. Digital navigation may be seen as improving such knowledge, thus enhancing network efficiency, yet with a number of independent providers that may offer conflicting advice, it is hard to assess to what extent increased efficiency is being achieved.

Wardrop’s first equilibrium assumes that road users make decisions without regard to the impact their choices may have on others – a ‘selfish’ equilibrium. According to his postulated second equilibrium, the average journey time would be at a (lesser) minimum if all users behave cooperatively in choosing their routes to ensure the most efficient use of the whole system. This would be the case if an omnipotent central authority could command them all which routes to take. Traffic flows satisfying Wardrop’s second equilibrium are generally deemed system-optimal, and the loss of efficiency from this to the selfish equilibrium is an example of what is known as ‘the price of anarchy’.

Economists argue that a more socially optimal outcome could be achieved if the costs imposed by the marginal road user on others, by adding to congestion, could be internalised by a congestion charge, thus modifying behaviour by reducing demand through higher vehicle operation costs. However, implementing road pricing is difficult in practice, and there are issues of equity, so a question worthy of investigation is to what extent a more socially optimal outcome could be achieved through flexing the routing advice offered by providers of digital navigation – ‘nudging’, not compulsion

The likelihood that improved operational efficiency could be achieved through digital navigation is suggested by the wide use of such routing and navigation systems by the competitive road freight sector. Everyday experience of online shopping indicates the use made by logistics businesses of digital technologies to manage, track and predict flows of goods, often offering delivery time slots of two hours or less, all done algorithmically. This points to techniques to achieve operational efficiency on congested road networks that might be extended to the generality of traffic in a way that could be far more cost effective and less carbon generating than civil engineering technologies.

The competing providers of digital navigation services are generally uncommunicative about their operations, while highway authorities appear to show no interest in the impact of this technology on the functioning of the road networks for which they are responsible. One kind of opportunity for mutual benefit would be when the network is under stress, for instance on the occasion of major incidents, peak holiday flows, bad weather and the like. It is probable, and certainly worth further investigation, that coordination between highway authorities and digital navigation providers could make better use of available capacity. There is also the possibility of improving operations at normal times, including avoiding routing through traffic via unsuitable minor roads. There is therefore likely to be scope for coordination that would improve outcomes for road users. This might be through the parties acting voluntarily for mutual benefit, or through the updating and implementation of the 1989 regulatory regime.

Although, by and large, the transport sector is functionally regulated to avoid calamity, there are obvious gaps that could usefully be filled to the benefit of users and to give innovators a sound basis upon which to progress their new ideas – or at least try them out with appropriate dispensation. This is particularly the situation in respect of the operation of the road network. As well as concern for safety and customer protection, all regulators should have a remit to encourage innovation that offers user benefits, since making effective use of existing infrastructure is preferable to creating new capacity, given the need to achieve the Net Zero climate change objective.

The new Labour government has set up a Regulatory Innovation Office, with the aims of supporting regulators to update regulation, speeding up approvals, ensuring different regulatory bodies work together smoothly, informing the government of regulatory barriers to innovation, and setting priorities for regulators which align with the government’s broader ambitions. This is an ambitious and potentially extensive agenda. Yet it will be disappointing if the emphasis solely on novel and exciting new technologies, a possibility suggested by one initial topic, the role of drones as a form of connected and autonomous vehicle technology – surely a rather niche market. In contrast, there is much scope for encouraging innovative approaches in the mainstream emerging transport technologies, where the new Office could hopefully play an influential role.

This blog post is the basis for an article that was published in Local Transport Today 0f 31 October 2024.

Car useEconomicsTransportTravel

My new book, titled ‘Travel Behaviour Reconsidered in an Era of Decarbonisation’, brings together arguments and evidence that I have discussed briefly in my commentary columns in Local Transport Today and in previous books intended for non-specialists. This book, aimed mainly at professionals and academics, is fully detailed, evidenced and referenced, yet concise and (I hope) cogent, the core of which is a critique of orthodox transport economic analysis and modelling, plus proposals for fresh approaches. It is published by the UCL Press, part of my own institution, an academic open access publisher launched in 2015, that makes copies of its books free to download as PDFs and claims more than 10 million downloads so far. In this blog post I will outline the main themes of the book, as a trailer to encourage readers to access the full text.

I argue that the need to reconsider travel behaviour and its analysis is two-fold. First, decarbonising travel could be achieved both by new technology and by altering behaviour so that we make less use of the car. The question for consideration is whether such behaviour change is feasible in practice on a scale that would make a useful contribution.

Second, I argue that there is a need to reconsider the economic analysis of transport investment so that this reflects the observed travel behaviour of real people in the real world, as opposed to assumed behaviour of utility-maximisers functioning within constrained analytical frameworks, the orthodox practice.

Behaviour change

To set the scene, the first chapter of the book outlines the pattern of travel on Britain, largely based on findings of the National Travel Survey prior to the pandemic. (UK data is particularly extensive, but I refer to other countries where possible.) The main feature, of course, is the dominance of car travel, which brings with it a variety of problems familiar the LTT readers. Yet the attractions of the car tend to be underestimated by those who hope for a shift to public transport and active travel. The car provides convenient door to door travel over short to medium distances where road traffic congestion does not cause excessive delays and parking is available at both ends of the trip. These conditions may not be satisfied in city centres, where public transport can be provided most economically and where catchment areas, whether for schools or supermarkets, are tighter, making active travel more feasible. But beyond city centres – in the suburbs, towns and rural areas – alternative to the car are much less attractive and mode shift much more difficult to achieve.

Yet the car is not attractive just for its utility; there are also ‘feel good’ factors that prompt car ownership and car-dependent lifestyles. Witness that cars are parked for 95% of the time, a good economic argument for car sharing, but conversely an indication of the value placed on private ownership. Witness also the growth ownership of SUVs, not least in urban areas where there is little practical need for a large 4×4 in place of a traditional smaller hatchback. The motor manufacturers are naturally focused on satisfying such feelings; and governments are supportive of auto industries for reasons of industrial and employment policies.

In the third chapter of my new book, I outline the important consequences of the coronavirus pandemic, a ‘natural experiment’ that showed how digital access could substitute for physical access under ‘lockdown’. Yet once the restrictions were lifted, car use returned quickly to pre-pandemic levels, consistent with the attractions of the car for gaining physical access to people and places, activities and services.

Chapter 6 discusses the routes to transport decarbonisation. For surface transport, electric propulsion is by far the most important means, though the equivalent in aviation is much more difficult. Some analysts and policy makers argue for a substantial reduction in car use as well, for instance by 20% as soon as 2030. But because of the attractions of the car, and given the built environment we have inherited within which trip origins and destinations very largely arise, any such reduction reflects much wishful thinking. The best prospects are in city centres where rail in all its forms provides speedy and reliable travel compared with cars, buses and taxis on congested roads. But urban rail is costly and takes a long time to build. Cycling infrastructure is much cheaper and quicker to implement, but largely attracts people from public transport, not from their cars.

So the prospects seem quite limited for changing travel behaviour and reducing car use on a scale that would make a useful contribution to decarbonisation objectives. How did we get to this state?

Changing travel trends

The historic trends in travel behaviour, the successive changes that have occurred, and their implication for future demand, are at the heart of what the new book explores. The evidence presented in the second chapter suggests four eras of travel: first, early man came out of Africa to populate the habitable earth, walking for 3-4 hours a day, covering around 3000-4000 miles on average, hunting and gathering. Then, starting 12,000 years ago, settled farming communities came into being, when average daily travel time fell to about an hour a day, covering about 1000 miles a year at walking speed (horse drawn vehicles on poor roads were not much faster).

The third era began in 1830 with the opening of the first passenger railway, between Manchester and Liverpool, utilising the energy of coal to travel faster than walking pace. Oil in the twentieth century permitted mass mobility through the internal combustion engine employed for road vehicle propulsion, as well as air travel. And the modern bicycle harnessed human power for local trips at faster than walking pace. According to the National Travel Survey, the average distance travelled in Britain increased to reach about 7000 miles per person per year by surface modes by the end of the twentieth century, with average travel time invariant at an hour a day. But then growth ceased, in part the result of exhausting the scope for faster travel through refinement of established technologies. This was the beginning of the fourth era of travel, that driven by the need for decarbonisation.

Each of these past innovations in transport technology based on fossil fuel energy led to a step-change increase in the speed of travel, and in turn to increased distance traversed in the long-run invariant hour a day of daily travel. Hence the benefits of faster travel were taken in the form of greater access to people and places, employment, services and activities, to family and friends, with the enhanced opportunities and choices that improve our quality of life.

In contrast, the new transport technologies seem unlikely to result in increases in speed of travel or of access. Electric propulsion is important for decarbonisation but does not increase the speed of travel. Digital platforms, exemplified by the access readily provided to car travel by the likes of Uber, and digital navigation, known in the road context as satnav, improve the quality of the journey without increasing speed. And automated vehicles on roads shared with conventional vehicles seem unlikely to permit faster trips. So these, the main new technologies, will not increase access benefits to users of transport networks.

A second reason why the growth of average daily distance travelled ceased to increase at the turn of the century, is evidence that those with the availability of a car in the household or good public transport services have arguably adequate levels of access, choices and opportunities, such that there is no need to travel further. Hence demand can be said to be saturated, a general feature of mature markets, and with no reason why travel should be an exception. However, travel to permit access has two distinct characteristics. First, improved access to any given class of destination is subject to diminishing returns, a standard economic concept. And second, access increases with (up to) the square of the speed of travel, reflecting elementary geometry. The combination implies that per capita travel demand for the purposes of access may be expected to saturate, consistent with the findings of the National Travel Survey and other sources.

While per capita travel has ceased to grow, the UK population is increasing, which requires consideration of how this may propel travel demand growth. Much would depend on where the growing population would be housed: new homes on greenfield sites would increase car use, whereas accommodating population growth within existing urban areas would point towards improvement of public transport services to meet the associated transport needs. The scale and location of new homes is currently a major issue of national policy, yet to be settled.

So the fourth era of travel is characterised both by the lack of new technologies to travel faster, and by substantial travel demand saturation, both helpful to implement transport decarbonisation. Yet population growth accommodated on greenfield sites is unhelpful. Overall, the scope for a significant reduction in travel demand seems quite limited.

Appraisal and modelling reconsidered

The second core theme of my book – decision-making processes for transport investment – leads to a fairly detailed critique of conventional transport economic appraisal which is based on the supposition that the saving of travel time is the main benefit of investment in new capacity. My conclusion is that it has not been possible to achieve a self-consistent methodology in this territory even after some sixty years of effort. One consequence is a mismatch between the policy objectives of many high-profile investments and the conventional estimation of economic benefits, which is therefore suitably massaged to align with the policy.

At the same time, there has been growing general recognition that the main benefit of investment that allows faster travel is increased access. However, attributing monetary value to access has proved difficult conceptually, and has not been successfully developed into a methodology for practical application. Besides, as noted above, travel demand for the purposes of gaining access is subject to saturation, quite unlike demand based on the supposition of time saving, which means that the latter cannot be a proxy for the former.

Identifying the benefits of investment as enhanced access creates problems for transport modelling, another issue I explore in some depth in the new book. Transport models to justify major investments typically comprise two parts: a variable demand multimodal traffic model, the outputs of which are inputs to an economic model that allows estimation of monetary benefits, comparing the with- and without-investment cases, and hence yielding the benefit-cost ratio, important for the decision to invest. Yet benefit in the form of increased access cannot be accommodated by the economic model as it exists, on account of the assumption of transport economists that time savings are the main benefit. This therefore requires the traffic modellers to constrain model outputs to a counterfactual case in which travel time is saved, rather than used to travel further for greater access, disregarding the increased vehicle-mile-related externalities and land use change that arise in reality. So transport modelling as currently practiced does not provide a secure basis for the estimation of investment benefits, nor of carbon and other externalities.

Fresh approaches

Pulling all these threads together, the final chapter of my book suggests some fresh approaches to travel analysis and transport policy, to respond to the methodological shortcomings of conventional appraisal and modelling that I identify, and to the need to make progress towards the Net Zero objective. I suggest a presumption that Britain has a mature transport system comprising the road and rail networks, consistent with travel demand saturation as discussed above. This is already the case for urban roads, where, in the last century, investment in increased capacity in the form of both new (often elevated) highways and enlarged carriageway for vehicles took place in response to growing car ownership; whereas more recently the trend has been to recover such capacity for active travel and prioritised bus routes. Demand for vehicle travel on urban roads must now be managed within constrained capacity.

There is a good argument for treating the interurban road network as mature, so not aiming to invest to increase capacity generally, hitherto justified by notional travel time savings. There may be benefits from particular investments associated with land use change; for instance, were a third runway at Heathrow airport to be built, investment in surface transport infrastructure would be needed to cope with increased passenger numbers, the resource implications of which should form part of the cost of the project as a whole.

More generally, location-specific road investment to make land accessible for development could be justified where the decision to develop is made jointly by planners, developers and transport authorities and where the developer contributes to the cost of the infrastructure. The case would be based more on commercial considerations than on orthodox welfare economics, although carbon emissions and other externalities should be taken into account.

Cessation of investment in a national road construction programme would be a big shift of policy politically, although this is what the Welsh government decided two years ago. But there is still widespread support for road investment among most politicians, national and local, the latter because the funds provided by central government are seen as ‘free money’. It is widely supposed that increasing road capacity reduces congestion, improves connectivity and boosts economic growth, although the basis for this supposition is tenuous. And of course, the construction industry and the consultancies that benefit from the funds that flow are also supportive. Nevertheless, there is a strong case for a switch in effort from costly investment in new civil engineering structures to making best use of the physical infrastructure we have. Economic analysis and modelling would then focus on the efficient management and use of the network, closely linked to the operational analysis of the road network in real time, a topic that has been neglected hitherto. To do this we now have the opportunity to take advantage of digital technologies that are already in wide use and are both scalable and relatively low cost.

Transport economic analysis has focussed on individual projects. In contrast, it has always been difficult to articulate an economically persuasive strategic case for a programme of transport investment. Regarding the transport system as substantially mature changes the main challenge from justifying a collection of investment projects to reconciling transport operations with the Net Zero objective.

The key elements of a strategy, whether of a particular sector or of transport provision as a whole, are:

  • the switch to zero-emission vehicles for surface transport;
  • employment of digital technologies to optimise network operations;
  • and financial support for public transport.

Alongside these, any investment in new capacity should now be specifically justified case by case to support economic development, such decisions being taken jointly with planners and developers, and schemes funded in part by the developers, as beneficiaries.

Active travel is not included in my key elements of strategy, although it is a good thing in many respects, including health and environmental benefits – I myself am a cyclist. But I see limited scope for getting people out of cars onto bikes. Copenhagen is a city famous for cycling, but car mode share is only slightly less than in London, while public transport is half that in London. So you can get people off buses onto bikes, but harder to get them out of cars, even in a small, flat city with excellent cycling infrastructure and a strong cycling culture.

One reason is that in Britain 80% of carbon emissions from car journeys arise from trip of more than 5 miles, and 95% from trips of more than 2 miles, so only limited opportunity to get switch to cycling and walking respectively. I don’t therefore see promotion of active travel as a central
element of a national transport strategy, although in cities with crowded public transport it may have more attractions, as in London, albeit with some loss of farebox revenue.

POSTSCRIPT

The new government’s policies: do they meet the need?

The manuscript of my book was completed before the General Election, which has led to a new focus on the basis of transport decision-making and the sources and allocation of funding. The new Labour Chancellor Rachel Reeves soon cancelled the proposed Arundel Bypass on the A27 and the tunnel adjacent to Stonehenge on the A303, as well as some minor rail schemes, laying the blame at the budget deficit.

Louise Haigh, the new Transport Secretary, has meanwhile been required to undertake a review of £800m of unfunded commitments in her department and a basis of prioritisation of projects, suggesting shortcomings in its system of controls. A new Office of Value for Money is to be established to identify areas where the government can reduce or stop such problems or improve the value of spending.

The government also intends to establish a National Infrastructure and Service Transformation Authority (NISTA), comprising the National Infrastructure Commission and the Infrastructure and Projects Authority, to drive more effective delivery of infrastructure across the country and support a 10-year infrastructure strategy. A seasoned transport and railway professional, Lord Hendy, has been given the rail policy brief, and a junior minister at the Department for Transport, Lilian Greenwood, the title ‘Minister for the Future of Roads’. All this suggests that there may be changes from past policies in the offing, in a direction that could be consistent with the arguments I have been making.

Such new approaches inevitably raise questions about the competence of the Department for Transport that cannot just be attributed to misjudgements by past Conservative ministers. A point of comparison is Transport for London, which is generally agreed to be a world leading planner and provider of regional public transport and major roads. TfL has a good vision of how London’s transport system needs to develop, aiming to implement the Mayor’s Transport Strategy and consistent with his responsibilities for housing, the environment and for London’s economy. This vision involves major investments in rail, low-cost investments in active travel, plus operational improvements across the board. Such a vision requires validation of individual investments – the ‘vision and validate’ approach.

But here it is important to recognise that decision makers do not simply bring an open mind to consider a portfolio of potential investments from which they might choose. Generally, those in charge – senior and experienced people – will have a pretty good idea of what investments they would like to make, and can justify. They seek validation from analysts – modellers, planners, economists, engineers. Validation includes securing good value for money and complying with all legal requirements. It is thus not often that major misjudgements occur in the choice of projects pursued. The popularity of the new Elizabeth Line, formerly known as Crossrail, is a good example of what has been achieved, despite overruns of construction time and budget. Other successful projects have been the introduction of the Congestion Charge and the upgrade of erstwhile ‘Cinderella’ rail lines into the London Overground.

In contrast to TfL, the Department for Transport has had neither a vision nor a strategy, nor has been a ‘driving force’ in the proposal/selection and delivery of the potential ‘best’ schemes, or the promulgation of effective ‘system management’ concepts. What it has had are problems with the major sectoral ‘wish list’ expenditure programmes for road and rail, the economic benefits of which it has found difficult to convincingly justify, both at programme level and for individual projects, but creating huge pre-emptive budget requirements. It has overseen serious cost overruns on HS2, had many setbacks and criticisms in the courts in the face of litigation by those objecting to road schemes. And it has struggled to reconcile the impacts of a large road investment programme with the Net Zero climate change objective, having its overall decarbonisation plans for transport twice rejected in the courts.

My book discusses many of the proposed investments supported by the Department as case studies in the application of a defective appraisal methodology, including the virtually impossible to justify Stonehenge A303 tunnel, questionable smart motorway schemes (a programme cancelled by the previous government as the result of public anxieties about safety, but falling well short of expectations economically), HS2 (now truncated), and the extended saga of a third runway at Heathrow. In some cases, the analysis was forced to comply with a prior policy decision, in others key strategic economic benefits were poorly treated or disregarded.

There is now surely a good case for an independent review of transport investment appraisal and modelling to identify a fit for purpose methodology for an era in which the high-level strategic priority is decarbonisation. I hope my book might provide useful evidence and argument were such a review to take place.

My new book is available at https://uclpress.co.uk/book/travel-behaviour-reconsidered-in-an-era-of-decarbonisation/ free to download as a PDF.

This blog post was the basis of an article in Local Transport Today of 5 September 2024.

Car useTransportTravel

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

EconomicsTransport

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.

EconomicsTransport

The Department for Transport has issued a draft National Networks National Policy Statement (NNNPS) for consultation . It covers major investments on the road and rail networks in England. The draft is intended to replace the version issued in 2015, before the government’s commitment to Net Zero and publication of the Transport Decarbonisation Plan. The House of Commons Transport Committee has announced an inquiry into this draft.

The DfT states that the 2015 NNNPS shall apply to projects already selected for public examination, so the new NNNPS will apply only to applications accepted after it is implemented, following the consultation. It therefore looks as though the Lower Thames Crossing tunnel, which has been accepted by the Planning Inspectorate for consideration, will be subject to the old guidance, despite construction being deferred by two years as announced in the recent Budget, which seems odd.

The purpose of such National Policy Statements is to provide guidance for decision-makers on the application of government policy when determining development consent for major infrastructure. The intention is to remove the need for consideration of fundamental national policy questions at planning inquiries. Those subject to this guidance are the scheme promoters (National Highways for most road proposals), planning inspectors, and the Secretary of State when granting Development Consent Orders.

The important question is how investment in new road capacity could be reconciled with the government’s legal commitments to achieve Net Zero greenhouse gas emissions by 2050, meeting the requirements of both the Climate Change Committee’s Sixth Carbon Budget that has been agreed by the government and the intentions of the DfT’s Transport Decarbonisation Plan. (Rail, already substantially electrified, is less of a problem.)

The draft opens by rolling the pitch, stating that the government sees a compelling need for the development of national networks (para 3.22), such that there is a presumption in favour of granting Development Consent Orders (para 4.2), while at the same time recognising the need to move away from ‘predict and provide’ (para 3.44). This is very different from the new approach of the Welsh government, which does not see a compelling need to develop its national road network.

Scheme proposals are to be supported by assessments of whole life carbon emissions, to ensure minimisation as far as possible (para 5.29). The draft states that, in reaching a decision, the ‘Secretary of State should be content that the applicant has taken all reasonable steps to reduce the total greenhouse gas emissions from a whole life carbon perspective. However, given the important role national network infrastructure plays in supporting the process of economy wide decarbonisation, the Secretary of State accepts that there are likely to be some residual emissions from construction of national network infrastructure’ (para 5.36). Moreover, a net increase in operational greenhouse gas emissions [from more traffic] is not, of itself, reason to prohibit the consenting of national network projects or to impose more restrictions on them in the planning policy framework (para 5.37). So in policy terms, additional road capacity is more important than decarbonisation.

Importantly, the application for development consent orders applies to individual schemes. There appears to be no requirement to estimate the impact on carbon emissions from an investment programme, such as the planned five-year Road Investment Strategy 3 (RIS3) due to start in 2026. Accountability scheme by scheme is not so very different from the present practice whereby National Highways argues that each individual scheme makes only a de minimus contribution to national carbon emissions, which can therefore be disregarded.

The DfT’s Transport Decarbonisation Plan made broad-brush estimates of carbon reduction from policies and programmes, for instance 1-6 MtCO2e from increased active travel over the period 2020 to 2050, and 620-850 MtCO2e for electrification of cars and vans over the same period. It is inconsistent not to recognise offsetting carbon increases from investment in new road capacity, likely to fall somewhere between the above ranges, and certainly not de minimis for the programme as a whole.

There is also a problem of modelling future carbon emissions arising from road investment. Transport models are complex and opaque, with many parameters, the value of which requires expert judgement. In consequence, the are two types of protagonist: experts who have a good working understanding of transport models because they earn their living from building and running such models; and non-experts, who are interested in the output of models but are not able to understand the assumptions, simplifications and judgements that the experts must make. Non-experts include decision makers in national and local government who have prior expectations of the economic value of particular road schemes, and whose test of a good model is that it delivers outputs, comparing with- and without-investment cases, consistent with these expectations. Other non-experts are those opposing road schemes at public inquiries, who are faced with modelled outputs as part of the promoter’s proposal that are not open to detailed scrutiny. Inspectors at planning inquiries are also non-expert in this sense.

The NNNPS requires projects to be supported by a local transport model, but planning inspectors and the Secretary of State do not need to be concerned with the national methodology and national assumptions around the key drivers of transport demand (para 4.7). In practice, most schemes on the Strategic Road Network employ local versions of a set generic traffic and economic models, typically SATURN for network traffic modelling, the outputs of which are inputs to the TUBA economic model. So, as it appears, consideration of the predictive validity of these models for projecting carbon emissions need not be considered either at a public inquiry or by the Secretary of State. One can understand why a planning inspector should not be burdened with a task for which they are not professionally trained. Nevertheless, the question is where in the decision-making process the validity of the supporting modelling might be assessed.

The need to assess the predictive validity of transport models is pointed up by the failure of standard models to project fairly short-run traffic flows in two cases of motorway widening, on the M25 and the M1, as I have recorded previously. This does not increase confidence in the ability of such models to project economic benefits and carbon emissions out to sixty years.

One particular problem of transport models is that they are largely used to justify new investment, in which context the saving of travel time is supposed to be the main economic benefit. Yet average travel time, as estimated by the National Travel Survey, has changed very little over fifty years, excepting the period of the coronavirus pandemic. The implication is that people take the benefit of faster travel as enhanced access to desired destinations, people, places, activities and services, for the opportunities and choices on offer. Travelling further, rather than using travel time savings for more productive work or agreeable leisure, means more externalities related to vehicle-miles travelled, carbon emissions in particular.

Modellers who aimed to model such access benefits, and the resulting changes in land use and value, would not be appreciated by the economists who are wedded to travel time saving as the main economic benefit of investment, nor by decision-makers who are well used to conventional economic investment appraisal. So modellers must fix their assumptions, simplifications and parameters to get outcomes that satisfy a ‘realism test’ of prior expectations, subject to conformity with unspecified standards of professional respectability.

The upshot is that the modelling of the impact of new road investments will systematically underestimate carbon emissions from the additional (induced) traffic. This makes it easier to appear to comply with the pathway to Net Zero, but means that the outcome is likely to fall short of that pathway.

Some further light is shed on this matter by the cost-benefit analysis the DfT has published in support of options to implement the Zero Emissions Vehicle Mandate, the legislative framework to fulfil the government’s objective to phase out the sale of internal combustion engine cars and vans by 2030. The need for this cost-benefit analysis is not stated, since the timing of the phase out is largely for negotiation between the government and the motor manufacturers. Perhaps the Treasury wish to be assured that this route to decarbonisation represents good value compared with other possible decarbonisation measures. Or perhaps the DfT economists wish to parade their competences after cost-benefit analysis failed to be supportive of a number of major rail and road investments.

The modelling assumes that that the switch to ZEVs could result in increased mileage per ZEV driver because electricity as fuel is cheaper than petrol or diesel (which begs the question of whether some new charge for EVs might be introduced, as I have suggested). This extra driving, a ‘rebound effect’, is supposed to lead to more congestion delays, with a very substantial cost impact: for a central sensitivity case of the preferred policy option, the abatement cost of the ZEV Mandate for cars and vans estimated as £12/tCO2e excluding the rebound effect, and £100/tCO2e including it (Tables 61 and 62).

So, the DfT thinks it would be much more costly to reduce CO2 emissions by means of the Mandate if the lower operating cost of EVs led to greater distances travelled. However, in my view, rebound of the magnitude modelled is unlikely, quite apart from the possibility of a road user charge for EVs. The per capita distance travelled by car depends on three main factors: speed of travel, time available for travel, and household car ownership. None of these are affected by the switch to electric propulsion. Vehicle operating costs have a second order impact at best, witness the growth of SUV ownership despite higher fuel use.

Paradoxically, the DfT modellers postulate additional traffic from reduced vehicle operating costs arising from electrification (mistakenly, in my view), while being in denial about the additional traffic arising from road users taking the benefit of investment in increased capacity as enhanced access involving more travel (again mistakenly).

The ZEV Mandate cost-benefit analysis states that the preferred policy option is expected to achieve emission savings of 415 MtCO2e in the period 2020-2050 (Table 29). This is substantially less than the savings from switch to electric propulsion of car and vans of 620-850 MtCO2e projected in the Transport Decarbonisation Plan, mentioned above. No clear explanation for this discrepancy is given; it may be because the present Mandate is for the period to 2030, with a further Mandate promised for 2031-35; or it may reflect the sensitivity of model outputs to input assumptions.

More generally, modelling for the ZEV Mandate exemplifies how modelling outputs can be very sensitive to input assumptions that are made in the absence of firm evidence of future travel behaviour. This is a caution that applies to most transport modelling, not least to the projections of transport sector carbon emissions to support decisions necessary to achieve reductions required by the legislative framework to achieve Net Zero.

We have been before in a situation in which there have been doubts about approaches to transport economic analysis endorsed by the DfT. Good work was done by SACTRA – the Standing Advisory Committee on Trunk Road Assessment – an independent body created by the DfT, that issued two influential reports in the 1990s. One confirmed the importance of induced traffic arising from new road construction, a view that had been resisted by the DfT since such traffic added to congested and reduced travel time savings. The other report recognised the wider economic impacts of investment, beyond the conventional time saving, vehicles operating costs and those externalities to which monetary values could be attached; estimation of such wider impacts, such as agglomeration effects, now forms part of the standard approach to investment appraisal.

Although SACTRA, by its very name, was intended to remain in existence, at least until formally stood down, it seems to have fallen into that state by not receiving new commissions. There is a need, in my view, to reconstitute it, or some similar body of independent experts, to look at the suitability of the current body of official guidance on transport economic analysis and modelling in an era when decarbonisation is a national policy priority. As it is, however, the people in DfT and their consultants, who naturally wish to please their clients, are talking to each other in an echo chamber, from which interested outsiders are excluded.

Other departments do better. The Treasury’s model of the UK economy has long been available to independent forecasters. The Energy Department collaborates with academic energy modellers and makes available the online Mackay Carbon Calculator that allows users to explore the options for reducing carbon emissions. Modelling of the coronavirus pandemic was largely carried out collaboratively by academic groups whose models and outputs were public for all to debate. And the modelling of climate change is carried out openly, collaboratively and internationally as input to the reports of the Intergovernmental Panel on Climate Change.

Th DfT instigated a move to update the National Transport Model to generate a new version, NTMV5, intended to be open to other users, but this seems not to have worked out in that the National Road Traffic Projections 2022 employed the previous version (as I have noted). The DfT should explain what went wrong, and should engage openly with those beyond the Department and its immediate advisers on how best to model the decarbonisation of the transport sector.

This blog post is the basis for an article in Local Transport Today 23 May 2023.

My written evidence to the House of Commons Transport Committee inquiry into the National Networks National Policy Statement is based on this blog.