National Roads Maintenance Review - Phase 2 Report

2 Economic, Social and Environmental Impacts of Road Maintenance

2.1 Why roads are important

Transport infrastructure is critical in enabling and securing sustainable economic growth. The Eddington^[11] study for the Department for Transport highlighted a number of drivers influenced by transport, including:

improved business efficiency, arising from time savings and journey time reliability for business travellers and freight;
increased business investment, supported by economies of scale; and,
more efficient functioning of the labour market.

The study also highlights the importance of effective prioritisation when finances are scarce, and the value in maintaining and making better use of current network assets. Given the pivotal role the road network plays in supporting economic growth, timely and effective maintenance is essential.

2.2 The economic, social and environmental effects of reducing spending on road maintenance

TRL's analysis^[12], commissioned as part of this Review, of the impacts of reducing road maintenance spending across the Scottish road network provides compelling evidence of the negative effects this would have on roads users, communities and the environment.

Some of this evidence is quantifiable, but in addition there are clear impacts that have not been given an economic value. This does not diminish their importance.

TRL gathered evidence, not only from a comprehensive literature review, but also undertook a quantitative appraisal of three separate spending scenarios:

maintaining Scotland's total roads maintenance spending at 2010/11 levels in real terms (this is the base case)
reducing this 2010/11 baseline by 20% over the next 10 years
reducing this 2010/11 baseline by 40% over the next 10 years.

The base case scenario still results in an increase in the maintenance backlog, as current levels of expenditure are not sufficient to address the needs of the road network. It should also be noted that the base case only applies if roads authorities can actually maintain their 2010/11 spending levels in real terms over the next 10 years.

The report assesses road maintenance in terms of the standard STAG^[13] criteria. In doing so, it highlights the potential effects of these budget scenarios on the five key areas of:

the environment,
safety,
economy,
integration and
social inclusion and accessibility.

The quantitative analysis is based on a net present value appraisal of the additional costs and benefits arising from each scenario. The following were assessed:

(a) vehicle operating costs - if roads deteriorate in condition due to reduced funding, vehicles incur more costs for example through increased fuel consumption and wear and tear.

(b) travel time costs -if roads deteriorate in condition, vehicles will also travel more slowly and so journey times will increase.

(c) skid related accident costs:- Transport Scotland and some local authorities monitor skid resistance and apply skid resistance management policies. The justification of these is that skidding accidents increase on lower quality road surfaces in wet conditions.

(d) delay costs at roadworks - roadworks cause disruption to travel and so reductions in roadworks due to funding constraints will generate less disruption. However, these effects are negligible in the overall travel costs.

(e) lighting related accident costs- the economic justification for provision of streetlights is a reduction in night-time accidents on well lit roads.

The summary results of the quantifiable aspect of the appraisal are shown in Table 1. Under scenarios 2 and 3 (ie, either a 20% or a 40% reduction in roads maintenance spending) there is a negative net present value (NPV). Scenario 1 is the base case and therefore has no positive or negative NPV.

Table 1 reflects that social, economic and environmental costs outweigh the financial cost savings.
Incremental impact compared to base case £m, 2002 prices
Present value of savings in maintenance spend Present value of total costs arising from the reduction in maintenance spend NPV^[14]	Trunk road network		Local road network		All roads
	Scenario 2	Scenario 3	Scenario 2	Scenario 3	Scenario 2	Scenario 3
	266	568	688	1,459	954	2,027
	-373	-647	-1,212	-2,433	-1,585	-3,080
	-107	-79	-524	-974	-631	-1,053

Source: TRL

Table 1: NPV analysis of quantifiable impacts of roads maintenance spending under two spending scenarios

Table 1 shows that for scenarios 2 and 3 the savings on road maintenance are significantly outweighed by the wider additional costs. This conclusion applies to trunk roads and, to an even greater extent, the local road network. This point is reinforced when the non-quantifiable impacts are considered.

Under Scenario 3, there are savings of £2.027 billion by reducing all road maintenance investment by 40% over ten years. However these savings are significantly outweighed by additional costs to Scotland's road users and communities of over £3 billion.

The overall dis-benefit to society of Scenario 3 is therefore estimated at £1.053 billion. This suggests that a £1 reduction in road maintenance results in a £1.50 cost to the wider Scottish economy and society. Spending on road maintenance clearly delivers economic and social benefits to Scotland.

If budgets are maintained at today's prices, current inflationary pressures continuing in future will mean that Scottish road authorities will be able to buy less maintenance work than they can today.

The STAG analysis by TRL also showed there is a wide array of largely non-quantifiable effects, which may be equally significant, that suggest lower levels of roads maintenance will have negative impacts for Scotland. In particular:

Economy

Journey reliability and quality will both deteriorate
Increasing road condition deterioration caused by delays in maintenance will mean a rise in temporary repairs and the final costs of roadworks
Local economies may be disproportionately affected should there be an increase in emergency incidents (eg, A83 Rest and Be Thankful landslip)
There is also an increased risk of emergency incidents on strategic infrastructure. Responding to these would likely divert further resources from maintenance budgets.

Safety

Lower levels of spending on key structures are likely to increase the frequency of emergency incidents leading to, at a minimum, local economy disruptions and increased journey times.
The balance of evidence suggests lower levels of street lighting increases accidents, increases the public's fear of crime and reduces the public's use of footpaths and cycle-tracks.
Deterioration in footways and cycle-tracks will cause increased safety risk to pedestrians and cyclists

Accessibility and Social Inclusion

Remote communities likely to suffer as priorities for spending a reduced budgets focus on where risks and traffic are most significant
Community accessibility will face greatest challenges in the event of emergency closures where alternative access routes are limited or non-existent
Vulnerable groups particularly those with a visual or mobility impairment are most likely to be affected from increased defects on footpaths
Vulnerable groups are most likely to be affected by increased perceptions of crime caused by poorer levels of street lighting
Pedestrians and residents will experience poorer amenity from increased roadside noise and reduced local air quality
Cyclists are likely to face poorer cycling conditions

Integration

Lower quality footways and cycleways will act as disincentives to physical fitness aimed at increasing improved health outcomes

Environment

Landscape, visual amenity and cultural effects will be significantly affected - poorly maintained streets and public spaces have a negative effect on quality of life
Poor walking environments and transport links leave areas isolated and damage community cohesion
Noise and vibration effects will worsen
Lower levels of street cleaning lead to increased environmental pollution (dust levels), local flooding along with reduced amenity.
Lower levels of street lighting make commercial areas less attractive to businesses
Biodiversity will be negatively affected if vegetation control is reduced and weeds spread
Global and local air quality may benefit from less planned maintenance activity, but this may then be countered by increased emissions arising from a greater number of unplanned interventions.

2.3 Conclusions drawn from the evidence

Engineers report that reducing budgets results in not only a deterioration of the infrastructure^[15] , but also an acceleration of that decline. This aligns with the recommendations of the Christie Commission on the benefits of preventative spending.

The assessment by TRL supports this and can demonstrate:

there are considerable wider social effects , including detrimental impacts on non-motorised users, if road maintenance spending declines.
reducing budgets results in significant negative economic and social impacts for Scotland.
rising cost inflation means delaying spending increasingly reduces the real spending power of any roads budget.

The status quo of continued decline in asset condition does not provide value for Scotland's communities, road users and the economy. Given the severe budget pressures, both nationally and locally, continuing with the current approach to road maintenance is not sustainable and change is required.