Question to the Department for Transport:

To ask Her Majesty's Government what plans they have to revise the algorithms used to assess the benefits of transport investment schemes in order to support their levelling-up agenda.

Transport business cases follow the HM Treasury five case business case model. Decisions are informed by the assessment of the scheme in relation to strategic fit, value for money, deliverability, commercial and financial considerations. The appraisal framework set out in the Department’s Transport Analysis Guidance (TAG) is intended to support scheme promoters to capture the full range of impacts associated with transport investment (economic, social and environmental) as part of the economic case.

The Department is planning to publish an initial response to the HM Treasury Green Book Review this Spring as part of a wider update to business case guidance. This will set out work in progress to support the appraisal of schemes which meet Government’s strategic priorities, and how we plan to implement other changes required by the Review. This includes ensuring that existing tools and flexibilities in current strategic and economic case guidance are used fully in making the case for investment which supports levelling up. The Department’s Rebalancing Toolkit provides guidance to describe how a transport investment scheme fits with the objective of spreading growth across the UK and can be used to assess the impact and identify the benefits that a transport scheme may have on local and regional economic performance.

The Green Book Review found that existing appraisal practice may lead to a focus on boosting benefit-cost ratios at the expense of analysis which illuminates the impacts of a proposed investment. The Department plans to review the existing culture and processes around the development of transport business cases to address behaviour and incentives which may be obstacles to supporting the delivery of Government’s objectives.