Exaggerated economic benefits of the A38 expansion
Recently, Conservative Councilors in Derby have claimed the £250 million A38 expansion would relieve congestion and benefit the local economy while branding critics of the scheme as “anti-business”.
What about all the businesses and commuters that will be disrupted by 4 years of construction work?
What about the economic damage caused by biodiversity loss and climate breakdown?
What about all the evidence that public transport and active travel infrastructure are a better return on investment than more road schemes?
Have the Conservatives done a good job with the economy and helping SME businesses recently?
When these Conservatives talk about being “pro-business”, do they mean the business interests of their party donors?
National Highways published a report in 2017 that found that congestion was made worse on dozens of major roads in England by a project to tackle bottlenecks.
The pinch-point programme was started in 2011 to relieve congestion, stimulate growth in local economies and improve safety but their own report showed most schemes had failed to do this.
The negative impacts of the A38 expansion on local people and the environment far outweigh any claimed benefits but with National Highways predicting an increase in traffic and a minimum of 11,000 new developments surrounding the A38, can we really believe their claims?
“It is not clear that investment in roads increases economic activity or spreads opportunity across the UK or that these benefits could not be achieved by other means.
Road investment is not the best way to support local economies, and the evidence about the effect of road schemes on economic growth is less strong than is sometimes assumed by policy makers.”
Reasons why the A38 expansion is a waste of money
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This is one of the grounds of the second legal challenge.
Benefit-cost ratios (BCRs) are most often used in capital budgeting to analyze the overall value for money of undertaking a new project.
National Highways claims predicted journey time savings will amount to hundreds of millions.
Yet they haven’t updated their BCR with the latest carbon emission prices or any costs for biodiversity damage.
They also haven’t included the latest construction, labour and material costs in their analysis.
A government reports show that benefits arising from journey time savings are only moderately accurate for most schemes. 28% of schemes have journey time benefits within 15% of that forecast and 74% of schemes are within 50%. So the claimed monetary benefits from journey saving times of the A38 could be 50% less than calculated.
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The biodiversity damage and losses caused by the A38 expansion, which includes felling thousands of trees, have not been included in National Highways figures.
The huge value of trees standing alone and in small groups in the UK has been revealed in a new report, which found they provide billions of pounds worth of benefits to people every year. The trees capture climate-heating CO2, reduce toxic air pollution and slow the flow of rainwater, cutting flood risks.
There are millions of such trees across the country, covering a combined 750,000 hectares, and making up 20% of all the nation’s trees. The value of woodland has already been estimated but the report is the first to calculate a value for trees in gardens, parks, fields and along streets across the UK.
It found the value of the services from non-woodland trees ranges from £1.4bn to £3.8bn a year, depending on the methodology used. The researchers said the estimates were conservative, as many benefits were hard to quantify, such as the boost to wildlife and to people’s mental health.
A large individual tree, with a canopy diameter of 30 metres, provides hundreds of pounds of benefits a year, the report found. It also estimated separately the average replacement cost of a tree at £2,500, although the largest trees can be valued at more than £100,000. In total, the report valued non-woodland trees at £429bn. The researchers said their work could be used by local authorities to justify the costs of protecting and planting trees at a time when budgets are hard-pressed.
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The A38 expansion will increase carbon emissions and alongside other predicted UK carbon emissions, risks the UK breaching legally binding carbon budget targets. This is one of the second legal challenge grounds.
The UK faces more deaths, higher costs and greater disruption if preparations to adapt to climate change aren't taken now, the government's climate advisors have warned.
Biodiversity loss, extreme heat and power failure are among the serious risks the country faces this century from rising temperatures, which will grow more serious the longer action is delayed.
The risks of climate change to the UK are growing, the government's climate advisors have said, as they call for action to adapt to a warmer future.
The Climate Change Committee said that found 61 ways that the UK will be impacted by rising temperatures in the coming decades, with eight set to cost over £1 billion a year each by 2050.
By 2045, the costs of climate change could reach around 1% of the UK's total economy by 2045, almost double the current size of the entire agricultural sector. In total.
Source: https://www.nhm.ac.uk/discover/news/2022/january/uk-must-adapt-to-climate-change-now-report-warns.html -
Many of the climate change impacts that the UK faces have the potential to create serious socioeconomic consequences.
However when weighing up damages from climate change against the costs of climate action, the action will result in a net-benefit.The A38 expansion and other road building schemes are not compatible with UK net-zero plans as they will increase carbon emissions through both construction and increased traffic.
The Government’s own Climate Change Committee (CCC) has strongly recommended a Welsh-style roads review for England, which means not building any road schemes that would increase traffic and carbon emissions.
What will climate change cost the UK? Risks, impacts and mitigation for the net-zero transition: https://www.lse.ac.uk/granthaminstitute/publication/what-will-climate-change-cost-the-uk/Costs and benefits of the UK reaching net zero emissions by 2050: the evidence:
https://www.lse.ac.uk/granthaminstitute/news/costs-and-benefits-of-the-uk-reaching-net-zero-emissions-by-2050-the-evidence/?ref=pmp-magazine.com -
When the Conservatives talk about being “pro-business”, they're talking about the developers who want to the extra A38 road capacity to build a minimum of 11,000 developments.
Page 5 of Secretary of State Decision Letter: “The Secretary of State has had further regard to the DCCS that makes a provision for a minimum of 11,000 new homes and 199ha (gross) of new employment land. Without the additional highway capacity provided to these areas the Secretary of State notes that the planned growth would be adversely affected”.
Property tycoons donated more than £60m to the Conservative Party over ten years. The sector was responsible for 20% of all donations taken by Boris Johnson’s party between January 2010 and March 2020, with several big spenders handing out millions. The findings were published in a report by Transparency International, which warned that Tory “dependence” on money from the property sector created a risk of “aggregative corruption".
The Mickleover Conservative councilors know excessive house building which is adding strain to local services in their ward is unpopular but support the A38 without telling the residents about the minimum of 11,000 developments the scheme will facilitate. These developments mean there will be an increase in traffic so the claims it will reduce congestion for local traffic doesn't hold up. Also there will be 4 years of disruptive construction work and there's no traffic mitigation plan yet.
So the Conservative councilors are concerned with protecting the interests of their party donors rather than local residents who will suffer 4 years of disruptive construction work, increased traffic, more strain on local services and loss of green space to developments.
Here's some related news article on the A38 and property developers.
From examining road-building over the past 20 years, researchers found clear evidence that road schemes:
● induce traffic, often far above background trends over the longer term
● lead to permanent and significant environmental and landscape damage
● show little evidence of economic benefit to local economies.
The roads failed to create the sustainable employment and economic growth we need. Instead, they encourage a new kind of infill ‘ribbon development’ of homes and industry along transport corridors, killing investment and regeneration in local town centres, while damaging the countryside.
The present economic development model of roads ➞ car-based development ➞ traffic growth ➞ more roads is unsustainable and ineffective.
Above all, it damages the vitality of town centres and our precious countryside. Provision of more road capacity does not deliver a stable situation – the more capacity is increased, the more capacity increases are ‘needed’, leading to the cycle illustrated in Figure 4.
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In a comprehensive meta-analysis, the What Works Centre for Local Economic Growth reviewed around 2,300 evaluations of the local economic impact of transport projects from the UK and other OECD countries, and found only 17 robust studies of the effect of road schemes on the local economy.
There was only one study from the UK, with 11 from the USA and the remainder evaluating programmes in Spain, Portugal, Hungary and EU-wide. Key findings of the review were that:
(a) roads can positively impact local employment, but effects are not always positive and a majority of evaluations show no (or mixed) effects on employment;
(b) road projects may increase firm entry, although not necessarily the overall number of businesses (as new entrants may displace existing firms).This leads us to the view that road investment is not necessarily a particularly effective means to support local economies, and the evidence about the effect of road schemes on economic growth is perhaps less strong than is sometimes assumed by policy makers.
To the extent that the road investment programme reduces the funding available for other priorities, it may not be the best way of achieving government policy priorities with regard to economic growth.
(Source: Transport for Quality of Life Transport Select Committee response) -
Increased productivity is often used as a rationale for new roads. Although there are a lot of theoretical studies on this, there is relatively limited empirical evidence that road investment increases productivity in countries with well-developed road networks, such as the UK. National Highways does not evaluate the effect of road schemes on productivity within its post-opening project evaluations..
A review of the economic benefits of strategic road investment by Frontier Economics for DfT acknowledged that “One of the strongest conclusions that can be drawn from the review of existing case studies is that there is a limited amount of robust evaluation evidence on the economic impacts of specific roads investment projects. While the study of traffic, safety and other transport-specific outcomes is very well developed (such as in Highways England POPE studies), most evaluations make no attempt to robustly and quantitatively assess the impact of projects on employment, productivity, trade, or other economic outcomes”
The same study concluded that “Across the wider evidence base, a particular gap relates to the lack of evaluation evidence on the mpacts on economic performance of long-distance intercity road investments. This is of course particularly important given the context for this study to inform the Road Investment Strategy.”
A study by Onward, which used a different measure of connectivity to official sources, found that access to jobs by car is not at all related to income (and productivity) and that differences in income are better explained by qualification levels and the mix of occupations and industries. They conclude that “further transport investments won't do much to improve incomes and living standards in a place without addressing other economic fundamentals like education and the quality of jobs available.”
While some studies have identified some productivity benefits in areas in Britain with better road networks relative to others, they acknowledge these effects are ‘quite trivial’ compared to the impacts found in developing countries with less developed road networks. They also conclude that there are decreasing returns on investment in road infrastructure as the stock of infrastructure increases.
(Source: Transport for Quality of Life Transport Select Committee response) -
In 2017, Transport for Quality of Life reviewed National Highways (then Highways England) own Post Opening Project Evaluation (POPE) reports to understand whether road schemes that had been justified prior to construction on the basis of their expected impact on growth of the economy had delivered the anticipated benefits.
They concluded on the basis of the post-opening project evaluation that there was either no evidence of economic impact, weak negative evidence, or anecdotal evidence.
Even schemes with moderate evidence, the economic effects may have arisen from changes incidental to the road scheme, or involved development in an inappropriate location, or involved changes that were as likely to suck money out of the local area as to bring it in.Where a road scheme was justified on the basis that it would support regeneration of an area with a struggling economy, it was common for economic development following completion of the road scheme to be slower than expected, or not to materialise at all, or to be of a type which offered little benefit to the area concerned. For example, this was the case for schemes such as A249 Iwade – Queenborough Improvement; A63 Melton Grade Separated Junction; A63 Selby Bypass; M1 J25-28 Widening; and A500 City Road and Stoke Road Junction Improvement.
Where a road scheme was justified on the basis that it was needed to cater for current and future traffic in a ‘pressure cooker’ area with a buoyant economy, it was common for the scheme to be followed by much development in car-dependent locations, causing rapid traffic growth and congestion on both the road scheme and the pre-existing road network.
Some road schemes were justified on the basis that by reducing journey times, they would increase the number of jobs that were accessible to local people, or increase the potential workforce able to access major employment sites, or create thousands of new jobs. There was no evidence of measurable economic benefit from these schemes.
Thus, the evidence from post-opening project evaluations that past road schemes have supported economic growth is limited and weak.
(Source: Transport for Quality of Life Transport Select Committee response)
Cleaner, sustainable transport is a better investment
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In our view, the case for investment in public transport to boost productivity is stronger. Evidence from the Centre for Cities, cited in the Levelling Up White Paper, suggests that “[poor] public transport in UK cities may limit productivity by reducing effective density and, as a result, agglomeration.” If this is the case, targeting investment to tackle the deficiencies in city transport systems might be expected to have significant benefits for productivity.
While any improvement in transport that moves people more easily to a given place could provide agglomeration benefits, public transport is likely to be particularly effective because it moves people so efficiently i.e. it requires less land-take than road investment to move a given number of people. In particular, the reduced need for parking creates more space for productive uses. If the main means of access to an employment centre is by car, induced traffic will eventually cause congestion and hinder growth. But if the employment centre is near to a train station, light rail stop or bus station, more people will be able to access it, promoting clustering and ultimately increases in productivity.
Evidence pointing to the agglomeration benefits of public transport investment includes:
A study of Crossrail in London, which suggested the agglomeration benefits of the scheme added 25% to the benefits of the project.
Investment in light rail was reported to be instrumental in the relocation of the BBC to Salford, which catalysed the successful regeneration of Salford Quays, which is now a key cluster for media and digital industries.
A 2014 study which found that a 10% increase in public transport in US cities, by adding rail or bus seats or rail miles, was associated with an increase in average wages for city centre workers equivalent to a 1-2% increase in Gross Metropolitan Product (GMP) per capita. Scaled up by population the benefits of public transport could be worth anywhere from $1.5 million to $1.8 billion (roughly £1.3 million to £1.6 billion) a year per city.
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The study by Onward found that “weak connectivity may be holding back growth in specific parts of the UK” and more specifically that “several second-tier cities are badly let down by their internal public transport infrastructure”. It suggests that some areas, particularly in the north, would benefit from public transport investment.
In large developed countries, bigger cities are generally more productive than smaller cities due to agglomeration, but this does not seem to be the case in the UK.
Data analyst Tom Forth suggests that poor public transport in Birmingham and many other UK cities makes their effective size smaller, and reduces the agglomeration benefits that would be expected from their population.
Unlike many European cities which have extensive rail and light rail networks as well as better bus services, the UK’s cities outside London are poorly served by public transport. For example there are only 9 light rail/tram networks in Britain (7 outside London) compared with 49 in Germany, 28 in France, and 15 in Poland.
Forth’s analysis looked at the public transport journey times on buses and trams into central Birmingham at peak times. He used 30 minutes as the travel time by bus or tram to mark the boundary of the Birmingham agglomeration (which doesn’t include walking or waiting time). At off-peak times a person 5 miles from Birmingham is part of the Birmingham agglomeration, while at peak times, this reduces to just 3.5 miles. He suggests this reduces the effective population of Birmingham by nearly half and may explain why Birmingham and other British cities seem to lag behind the productivity of similarly sized European cities.
Forth’s paper concludes “If we assume that agglomeration benefits in the UK are as significant as in France, this would lead to an increase in GDP/capita of 7%.”
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Public transport offers opportunities for lowering travel costs and reducing the UK’s reliance on oil in the context of the current cost of living crisis.
The rail industry is estimated to generate around £43 billion of GVA a year.
For every £1 worth of work on the railway system itself, £2.50 of income was generated elsewhere in the economy.
The wider rail industry generated an estimated £14.1 billion in tax revenue in 2019 which would cover almost 80% total public expenditure on rail.
The economic return for each £1 spent on bus networks and services ranges from £2.50 to £3.80 for revenue expenditure and £5.00 and £6.80 for capital expenditure.
Out of a sample of 150 small bus and rail schemes the median benefit cost ratio was 3.58 (i.e. the benefits were nearly four times the costs).
Much improved and more rapid public transport connections could deliver an increase in GDP in England (not including London) and in Wales of over £50 billion a year through agglomeration effects.
Public transport is vital for many people to access employment, education or training. It is the only way that many employers can get the employees they need to the workplace with over 2.5 million regular bus commuters pre-Covid. An estimated one in ten bus commuters would be forced to look for another job or give up work altogether if they could no longer travel to work by bus.
A 10% improvement in local bus service connectivity is associated with a 3.6% reduction in deprivation.
Fact sources: Handout from workshop on Campaigning for better public transport
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Investing in active travel can bring environmental, health and economic benefits:
Walking and cycling can contribute towards economic performance by reducing congestion, supporting local businesses and more. The benefit to cost ratio of investments in walking and cycling are estimated at 5.62:1 (or ‘very high’ value for money).
Source: https://commonslibrary.parliament.uk/research-briefings/cbp-8615/
This report for the Bicycle Association gives the economic benefits of cycling (business benefits are pp13-16): https://www.bicycleassociation.org.uk/wp-content/uploads/2023/09/2023-The-UK-cycle-industry-economic-and-employment-benefits-1-1.pdf
Living Streets Pedestrian Pound gives the retail/business benefits of public realm improvements: https://www.livingstreets.org.uk/media/3890/pedestrian-pound-2018.pdf
Infographic by the Government on the co-benefits of sustainable transport.
The Government’s own 2021 Transport Decarbonisation plan highlights the economic benefits of sustainable transport.
Local businesses up to 40% increase in shopping footfall by well-planned improvements in the walking environment
Decarbonising transport will lead to thousands of jobs being created in transport related green industries. The production of zero emission road transport vehicles has the potential to support 72,000 jobs, worth up to £9.7 billion GVA in 2050.
Physical inactivity costs the NHS up to £1 billion per annum, with further indirect costs of £8.2 billion – active travel can reduce that.
Projections in this Plan will deliver signifcant benefts from improving air quality. These have been estimated at up to £9 billion over the period 2020 to 2050.
It’s estimated that the annual social cost of urban road noise in England is £7 to 10 billion.
The Stern review estimated the overall costs of unmitigated climate change to be equivalent to 5-20% of global GDP each year.
Air pollution costs to health and social care could reach £5.3 billion by 2035.
The UK-wide NHS costs attributable to overweight and obesity are projected to reach £9.7 billion by 2050.
The current transport system places wider costs on society estimated to reach £49.9 billion per year.
Current transport system costs on wider society.