DfT Guidance to calculate Wider Impacts Alex Macfarlane Department - - PowerPoint PPT Presentation

DfT Guidance to calculate Wider Impacts

Alex Macfarlane Department for Transport Wider Impacts of Transport, Friday 19 June

History: Wider Impacts and Transport Appraisal

• 1999 SACTRA – Transport & the Economy

Imperfect competition in transport and transport user markets

• 2005 DfT WEBs Paper

Optional – used in some major schemes

• 2006 Eddington Report

Importance of WEBs paper

• 2009 Wider Impacts Guidance

For consultation

Wider Impacts: what are they?

• 1. Agglomeration – cities are more productive

Sharing – public goods Learning – spill-over benefits Matching – labour and product markets

• 2. Output changes in imperfectly competitive

markets

• 3. Labour market effects
• Transport affects overall labour supply
• Transport can change composition of the labour market

What does an assessment of wider impacts involve?

Additions to conventionally measured benefits

Agglomeration Imperfect Competition Labour market Sum additional benefits

Rail Crossrail 19% 3% 22% 44% Road Leeds to Bradford Improved Highways 21% 4% 21% 37% Road Leeds Urban Area Improved Highways 22% 4% 7% 33% PT Leeds to Bradford PT Improvements 15% 2% 4% 21% Bus Intra Leeds bus subsidy 11% 2% 6% 19% Road Leeds to Sheffield Improved Highway 19% 5%

• 6%

17% Road M6 Shoulder 12% 5% 0% 17% Bus West Yorkshire County bus subsidy 9% 2% 6% 17% PT Leeds Urban Area Major PT investment 9% 3% 6% 17% Bus South & West Yorkshire Bus subsidy 7% 2% 5% 17%

• Average

13% 3% 5% 22%

How much do wider impacts matter?

Where does agglomeration matter?

• Calculate agglomeration

impacts if in or linking a Functional Urban Region:

• Core (high job density)
• Commuting field
• Impacts may not be high for

all schemes covering a blue area

• You can calculate

agglomeration benefits

• utside of FURs

Functional Urban Regions

When to calculate wider impacts

• If cost >£20m calculate:

– Labour supply effect; and – Imperfect competition And

• If in a FUR

– Agglomeration impacts WIs will be required for all schemes which satisfy these conditions from April 2010

What’s in it for regions and scheme promoters?

• Collectively we all prioritise better transport schemes by

including import impacts we previously missed

• It could help secure more public investment in transport in

general (investment in transport compares favourably to spending elsewhere across government, wider impacts could add to that)

• In particular it could help prioritise and secure resources

for urban schemes. Flip side is it could de-prioritise some rural schemes.

What’s DfT doing next?

• 2 WEBTAG units for consultation – 2.8 (project

managers) and 3.5.14 (practitioners guidance)

• In draft guidance to be issued by end year
• Becomes mandatory guidance in April 2010
• Economic data set to be released shortly
• Software to calculate WIs from WEBTAG compliant

transport model has been written

• To be issued with draft guidance in Dec
• Testing software is now underway
• Contact WiderImpacts@dft.gsi.gov.uk

Issues for discussion

• Does the theory add up?
• What evidence would be helpful for those using

the guidance?

• Are the demands on modellers manageable?
• Are the conditions under which Wider Impacts

should be calculated unambiguous?

• Is the treatment of other associated impacts –

congestion, carbon etc - consistent?