Implications for Delivery
When considering economic appraisals and benefits realisation, practitioners and policy-makers should:
Use robust economic appraisal for safety investments – Apply the Scottish Public Finance Manual and UK Treasury Green Book principles to assess costs and benefits, including the Value of Prevention (VoP) for road injuries and wider social, environmental, and health impacts.
Maximise Benefit:Cost Ratios (BCRs) – Extend appraisal periods (e.g., 20–60 years) and consider grouping related measures so the combined scheme meets cost-effectiveness thresholds, even if individual elements do not.
Incorporate wider impacts – Where BCRs are marginal, include additional factors such as air quality, noise, fuel efficiency, climate risks, and biodiversity to strengthen the case for investment.
Explore alternative appraisal models – Consider public health-oriented approaches, such as cost-utility analysis using quality-adjusted life years (QALYs), to capture broader societal benefits and support innovation.
Recognise moral and legal responsibility – In cases where authorities have clear accountability for safety risks, act beyond strict economic thresholds when it is ethically or legally “the right thing to do,” as exemplified in Sweden’s Vision Zero approach.
Background
Economic appraisal is a process of systematically analysing the potential costs and benefits of a programme, project or policy, so that officials can make a decision about whether to proceed. The aim is to ensure that resources (particularly public finances) can be allocated effectively and that the chosen option delivers the best value for money, when both monetary and non-monetary factors have been considered.
The Scottish Public Finance Manual (SPFM) is issued by the Scottish Ministers to provide guidance on the proper handling and reporting of public funds, while the Scottish approach to economic appraisal and evaluation is based on the approach adopted by the UK government in HM Treasury’s Green Book (2022).
What the Research Shows
The basic principles of economic appraisal for safety have not changed significantly for decades. The safety benefit of a making an investment is calculated, by working out the value of prevention (VoP) using standard figures for the cost to society of a road traffic injury. These costs include emergency response, medical care, rehabilitation, lost output and something called ‘willingness to pay’ – an economic measure that puts a value on intangible costs such as personal grief. The cumulative value of prevention (benefits) can then be weighed against the costs of improvements to see whether they offer a worthwhile return on investment in the form of a benefit:cost ratio (BCR). A BCR will typically need to be higher than 1, to demonstrate that the benefit exceeds the cost.
For larger schemes, the appraisal process will be more complex as other factors are included in the calculations. Standard measures for changes in journey time are systematically calculated and updated. The Green Book also includes guidance on ‘non‑market valuation and unmonetisable values’ (Annex 1) which includes air quality, noise, recreational activity, biodiversity, climate risks and loss of amenity.
As road authorities improve safety performance across their networks, addressing the highest risk sites, making the economic case for continued investment will inevitably become harder. Leading road authorities around the world are having to grapple with more sophisticated economic modelling or changes to the appraisal process to ensure that they continue to prioritise strengthening the road network with a goal of achieving Vision Zero. Here are some of the considerations that may need to be considered:
Appraisal period
Elongating appraisal periods can have a significant effect on the outcome BCR. The UK Department for Transport’s ‘Safer Roads Fund’ calculated returns over a 20-year period, offering a BCR of 4.4. The Green Book recommends that new road schemes should be evaluated over 60 years and that there is justification for considering some major renovations over a 30-year horizon. The other consideration that can be made is grouping a series of investments together so that their cumulative BCR meets an acceptable threshold. For example some individual measures on a route treatment might not produce a BCR of greater than 1, but when the whole treatment plan is put together, the aggregate BCR for the whole scheme makes economic sense.
Consider additional factors
The guidance makes clear that the economic appraisal should be proportionate to the scale of the scheme, but for marginal cases, the opportunity to consider other factors might tip the balance. With standard metrics for impacts such as air quality, noise and fuel or operating costs, some additional calculations might help to make the economic case stack up.
Take a new approach
In contrast to the approach taken in typical transport assessments, for policy making relating to health, the Scottish Intercollegiate Guidelines Network (SIGN) recommend a different approach. ‘Cost-utility analysis’ with quality-adjusted life years (QALYs) are used to assess incremental health gains which can then be compared with incremental costs as a ratio. Relatively little work has been done on evaluating the effect of using a new approach, but as we move towards a more public health approach to safety mobility, this may support different schemes and promote greater innovation.
‘The right thing to do’
Even where we have standardised approaches to the evaluation of expenditure, this doesn’t always mean that we are unwilling to act. For example, government expenditure in response to the COVID pandemic exceeded all normal boundaries for the value of prevention or quality adjusted life years. When it is clear that the prevailing authority has liability for the risks that have been created, it becomes about taking responsibility because it is the right thing to do. This is recognised as the key policy innovation in the Swedish journey towards Vision Zero – that road authorities and the Swedish Government could no longer ignore their responsibility for designing and operating a system that was resulting in harm to citizens.
Sources
Carney, M. (2021) Value(s). William Collins
HM Treasury. (2024). The Green Book: Appraisal and evaluation in central government. https://www.gov.uk/government/publications/the-green-book-appraisal-and-evaluation-in-central-government/the-green-book-2020
Kleeman, J. (2024) The Price of Life: In Search of What We’re Worth and Who Decides. Picador.
O’Reilly, D., Hopkin, J., Loomes, G., Jones-Lee, M., Philips, P., McMahon, K., Ives, D., Soby, B., Ball, D., & Kemp, R. (1994). The value of road safety: UK research on the valuation of preventing non-fatal injuries. Journal of Transport Economics and Policy, 28(1), 45–59. University of Bath. https://www.jstor.org/stable/20053023