1. Assessing the value and viability of transport schemes
Transport-Led Development in the Midlands 2016
Dave Jevons
Partner
19 October 2016

2. Overview The Midlands economy Transport as a stimulus Five case model
19 October 2016

3. The Midlands economy GVA per head (current prices)
19 October 2016

4. The Midlands economy Employment rate (%)
19 October 2016

5. The Midlands economy Long term economic plan
Announced in 2015, six aims:
raise the long term growth rate of the Midlands to at least the forecast long term growth rate of the whole UK
to create 300,000 extra jobs in the Midlands
put skills at the heart of the economic revival of the Midlands
deliver £5.2 billion of investment into new transport infrastructure in the Midlands
back science and innovation in the Midlands
improve the quality of life in the Midlands
19 October 2016

6. Transport infrastructure as a potential stimulus
New transport project
Connectivity: availability of transport links
Increased labour supply
Increased labour productivity
More international trade
Cost of transport
More investment
Higher efficiency
More innovation
Enhanced competition
GVA
GVA/person
Employment
Changes to structure of the economy
19 October 2016

7. Transport infrastructure as a potential stimulus
Existing infrastructure
Investment options
Growth mechanisms
Demand multiplier
Productivity
Configuration effects
Innovation
Direct
New networks
Increases growth potential
Benefit to economic growth
Enhancements
Maintenance
Stock level, quality,
spare capacity
Indirect
19 October 2016

8. The Five case model Green Book-compliant assessment
The Green Book is a set of guidelines published by the UK Treasury for appraisal of central government projects
With regard to a project, the purpose of the tool is to answer these two questions:
are there better ways to achieve this objective?
are there better uses for these resources?
These are answered by identifying relevant options, attributing monetary values to impacts, and assessing the costs and benefits of each option
The principles could be applied to any assessment; not UK-specific
19 October 2016

9. Five case model Overview
That the intervention is supported by a compelling case for change that provides holistic fit with other parts of the organisation and public sector – the “strategic case”
That the intervention represent best public value – the “economic case”
The that proposed Deal is attractive to the market place, can be procured and is commercially viable – the “commercial case”
That the proposed spend is affordable – the “financial case”
That what is required from all parties is achievable – the “management case”
19 October 2016

10. Five case model The process
Market failure
Objective
Options
Appraisal
Decision
19 October 2016

11. Five case model Economic case
User
benefits
Financial cost
of scheme
Environmental
impact
Social
impact
Wider economic impacts
- agglomeration
- competition
- labour supply
Benefits
= BCR
Costs
Benefits
+ WEI =
BCR (including
WEI)
Costs
Note: BCR, benefit–cost ratio. Source: Oxera.
19 October 2016

12. Contact: David Jevons david.jevons@oxera.com +44 (0) 7725 240904
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