Economic, Environmental and Social Impacts of Changes in Maintenance Spend on Local Roads in Scotland

Executive summary

This study assessed the economic, environmental and social impacts of cuts to the roads maintenance budgets for local roads in Scotland. It describes the methodologies adopted, the results from the analyses and the conclusions from the investigation. This study and the associated study for the assessment of impacts of reductions in maintenance funding for trunk roads in Scotland provided evidence for the National Road Maintenance Review for Scotland initiated by the Scottish Government in 2011.

The study showed that the economic and social disbenefits to Scotland are greater than the savings in maintenance budgets. The net effects of the reduced budgets were decreases in economic welfare of £524m and £974m (Net Present Value at 2002 prices) for the overall maintenance funding reductions of 20% and 40% respectively.

The study examined the economic, environmental and social effects of reductions in the level of maintenance funding for local roads in Scotland between 2010 and 2030. In addition to a quantitative assessment of the impacts of reductions in maintenance funding, a literature review and a workshop with a wide range of stakeholders were used to better understand the qualitative effects that could not be monetised.

The literature review found few reports that contained quantified evidence of the consequences of reduced road maintenance funding particularly on the impacts for cycle-tracks and drainage. There was a great deal of qualitative evidence of the effect of low maintenance much of which did not fit directly with the current Scottish Transport Appraisal Guidance (STAG) criteria.

The literature review showed the user group most affected by a reduction in road maintenance would be pedestrians, especially those with mobility and visual impairments. Pedestrians would see the impact in terms of noise and vibration, global air quality, visual amenity, cultural and landscape, physical fitness, accidents, security, community and comparative accessibility.

The qualitative analysis identified key impacts of reduced road maintenance funding that, although not quantified, further supported the overall conclusion from the study that the wider impacts of reduced maintenance exceed the direct savings made by Local Authorities from reduced maintenance budgets. The review highlighted the links between road maintenance and other Government and local activities (e.g. cycling initiatives, links to health service costs and effects on housing and retail developments). The indirect effects of a road network in poor condition include the further deterioration of the neighbourhood and the deterrent to travel, particularly by pedestrians and those with visual and mobility impairments. Evidence was found that showed the benefits of an improved street-scene lead to higher commercial activity (and increased retail rents) and higher house prices.

Examples of studies into customer satisfaction by Local Authorities were used to assess the importance given to network condition by road users. Local Authority customer surveys cover the full range of services provided by Authorities but part of the results from the surveys available showed the public are aware of changes in the level of service provided by the road network and take a strong view of effects of levels of maintenance of the road network.

To quantify those impacts for Local Authorities that could be monetised, a sample of eight Local Authorities was selected for the detailed quantitative analysis. Sample Authorities were chosen for four Authority types (i.e. urban, semi-urban, rural and city) and were considered representative of the whole local road network. The results from the sample Authorities were then scaled to represent the impact on the road network in all 32 Local Authorities.

The three funding scenarios considered in the study for the 8 sample Authorities were the same as used for the trunk road network for the 20 years analysis period. These all considered constant levels of spend through the first 10 years of the period. The first assumed the spending level in 2010/11 continued and the other scenarios assumed the 2010/11 level of funding was reduced by 20 percent and 40 percent. The first scenario assumed the constant (2010/11) funding also continued for the last 10 years of the analysis period. For the two scenarios with reduced funding, during years 10 to 15 of the analysis period, the funding was restored uniformly to the 2010/11 level and from years 15 to 20, the funding was assumed to increase by 2.5% per year. In line with the Scottish Transport Appraisal Guidance (STAG) requirements, the results of all the analyses given in this report are given in 2002 prices.

Real increases were assumed for the costs of vehicle fuel and road user time in line with standard UK guidance, costs of maintenance works and carbon emissions. The effects of discounting all future costs at the annual Treasury Test Discount Rate were considered. The study examined the amount of maintenance undertaken on the local road network, assuming standard national growth rates in traffic flow, and assessed the impacts of reducing the current maintenance funding in terms of changes in network condition, accident rates, vehicle operating costs, road user journey time and global (i.e. CO2) emissions.

The change in the level of overall maintenance funding was specified for each Scenario but it was recognised that the overall reductions may not affect all aspects of maintenance equally. A subjective assessment was made of the likely distribution of the overall budget reductions across Local Authority maintenance activities. The results of the assessment were applied to each of the sample Authorities. This analysis showed that pavement maintenance would suffer a bigger share of the budget reduction than other maintenance areas. An investigation into the likely effects on different maintenance activities suggested the pavement maintenance budget would be reduced by 35% and 69% for reductions in the overall maintenance budgets of 20 percent and 40 percent respectively.

The future condition of the road network was predicted using the WDM pavement network model, used for similar analyses on behalf of Local Authorities in Scotland in 2010, with network data for each of the sample Authorities. For all 3 Scenarios and all sample Authorities there is a worsening in network pavement condition for the principal aspects of condition used in the analysis (i.e. 3m Longitudinal Profile Variance and rut depth).

The ISOHDM model, HDM-4, was used to assess the effects on vehicle operating costs, including vehicle depreciation, of changes in network condition resulting from the reduction in maintenance funding. Using typical UK vehicle types in HDM-4, it was estimated that in 2030 there will be an increase in undiscounted vehicle operating costs of more than £5 billion per year compared with the 2010 level, for the scenario which retains the current level of maintenance spend (i.e. Scenario 1). Bigger increases were predicted following cuts in the maintenance budget. With a 40 percent overall budget reduction, the undiscounted vehicle operating costs were predicted to be £5.3 billion per year more in 2030 than in 2010.

The effect of changing vehicle speeds as the carriageway deteriorates was assessed for A roads using the results of a brief study carried out some years ago into the effects of pavement condition on traffic speed. The annual undiscounted costs of increased travel time, by 2030, resulting from the worsening in pavement condition, were estimated to be £105m, £120m and £127m for the constant level of spend, 20 percent and 40 percent overall budget reduction scenarios respectively.

QUADRO analyses were used to assess the impacts on road users from changes in the number of maintenance schemes with the reduced maintenance funding. Typical schemes, based on the results of the network condition predictions, showed an increase in the undiscounted costs of traffic delays to road users at roadworks of £50m, £93m and £124m for the constant level of spend, 20 percent and 40 percent overall budget reduction scenarios respectively.

Maintenance operations contribute to the carbon footprint of the road network in a number of ways. This study considered the changes in levels of carbon dioxide emissions from production and use of asphalt materials, the change in the level of disruption to road users caused by road maintenance and the change in CO2 from increased fuel consumption on rougher pavement surfaces. The analysis showed a predicted increase in the undiscounted costs of carbon emissions of £296m per year in 2030 if the current level of maintenance funding is retained. With the 20 percent and 40 percent cuts in maintenance funding, that increase was predicted to be further increased by £6m and £10m respectively. For all scenarios the cost of the emissions due to vehicles travelling on poorer road surfaces was predicted to contribute more than 95 per cent of the total increase.

The reductions in maintenance funding were expected to have a lesser effect on the level of funding for structures maintenance. For structures and other assets the reduction in maintenance may impact on route security (i.e. the level of risk of keeping a route open to road traffic and other users) caused by environmental (e.g. flood defences), safety (e.g. increased accidents), quantifiable economic issues (e.g. disrupted journeys) or social issues (e.g. community severance). The study showed evidence of the costs of repair and economic impacts of closures and failures on road networks but it was not possible to adopt a traditional cost benefit analysis methodology to predict the change in whole life economic cost of different funding scenarios.

A brief analysis of the likely effects on levels of street lighting following maintenance budget reductions assessed the changes in the number of night-time accidents on the road network. The analysis assumed the reductions to the lighting budgets would be smaller than the 20 percent and 40 percent reductions to the overall budget. Nevertheless, the reductions in Authority costs were expected to exceed the cost of the increased number of accidents. It was also recognised that street lighting also provides benefits of security and accessibility but these were not quantified in this study.

The outcome from the quantified analysis in this study was that with the overall deterioration in network condition the undiscounted total non-works costs were predicted to increase by between £1,335m and £1,390m per year by 2030 for the three funding scenarios. These showed the cumulative effect was that the undiscounted non-works costs, compared with the constant level of funding Scenario, were predicted to be £1,976m and £3,976m for the 20 percent and 40 percent overall maintenance funding reductions respectively. When discounted back to the base year, the increases were £1,212m and £2,423m for the two Scenarios respectively. Those increases exceeded the savings to Local Authorities from reduced maintenance costs over the analysis period so the net effect of reduced maintenance budgets was an increase in the total transport costs of £524m and £974m for the two Scenarios with overall maintenance funding reductions.

Condition data from Local Authority databases was used in an asset valuation model to estimate the change in value of the local road network over the analysis period for the three funding scenarios. That analysis showed that at the end of the analysis period, compared to the value when the 2010 level of spend was retained, the reduction in the asset value was predicted to be £118m for the 20 percent reduction in overall maintenance funding and a reduction of £234m in the undiscounted asset value with the 40 percent overall maintenance funding reduction. With the 40 percent overall maintenance funding reduction, the decrease in undiscounted asset value in 2030, compared with 2010, was predicted to be more than £960m but the decreases in asset value for the two reduced budget scenarios were less than the savings in maintenance budgets over the analysis period, compared with the constant funding scenario.

The analysis showed the different contributions made to the wider effects examined and the importance of vehicle operating costs as road network condition deteriorates. Also, for this study, to assess the effect of maintenance funding reductions, the impacts were considered for 8 sample Local Authorities and the results from that sample were scaled to represent to effect for the whole local road network. The key assumptions in these two aspects of the study were examined to assess the sensitivity of the overall results to assumptions made. The results of the sensitivity tests did not change the overall conclusions from the study but did show the potential for variability in the results from the analyses.