Planes, Trains and Automobiles

1st July, 2015

On a day in which another large infrastructure story dominates headlines it’s important to remember that most transport spending goes on projects that are far less visible but (at least in aggregate) equally as important.

Our latest evidence review focuses on what the evaluation evidence tells us about the local economic impact of these projects. The first point to note is that there is very little high quality evaluation evidence out there. This is disappointing, given the amounts we are talking about – and the fact that large amounts of money goes on ex-ante appraisals pre-decision. One central finding of our report is that we must do better in future. We need to think about embedding evaluation into the appraisal process and we also need to think how to subject claims made about economic growth in the economic and strategic cases to more scrutiny. We’ll be working with local and central government to help develop our proposals for how to do this.

The findings themselves paint a mixed picture. The clearest evidence actually concerns the impact on property prices. Both road and rail projects have a positive impact on residential property prices (although these effects vary by distance and time). We also have some evidence on employment effects – at least for roads. These evaluations show that road projects can positively impact local employment. But effects are not always positive and a majority of evaluations show no (or mixed) effects on employment. For road projects we also have a limited amount of evidence for positive effects on wages and productivity. In contrast, we found no evaluations that looked at the impact that rail has on employment, wages or productivity. Similarly, we found no high quality evaluations that provide evidence on the impacts of trams, buses, cycling and walking schemes on any economic outcomes.

While it is understandable that political debate focuses on expenditure figures across different parts of the UK, they do not help answer the question of what would happen if expenditure was distributed differently. Arguments for spending more in areas that are less economically successful hinge on the hope that new transport is a cost-effective way to stimulate new economic activity. As this review shows, we do not yet have clear and definitive evidence to support that claim. This raises fundamental questions about scheme appraisal and prioritization, and about the role of impact evaluation in improving decision-making around transport investment.

Ultimately, as the debate around the Davies Commission demonstrates, the allocation of transport spending remains a political decision. But better evaluation and appraisal has a role to play in informing those decisions. Our report emphasises the importance of improving the inputs into the decision making process, even if political debate still drives many of the major decisions.

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