The UK Department for Transport (DfT) has strong views on its priorities for capital spending, but perhaps less so on value for money and return on investment. We take a look at some recent proposals.
One of the phrases that the DfT repeats as part of its standard response to any suggestions for a change to metric road signs is, “Our position is that we do not consider that diverting funding from high priority areas for the metrication of traffic signs is justified.” However, the recent publicity about the soaring cost estimates of the proposed High Speed 2 rail project (HS2), and proposals for a new airport in the Thames Estuary (“Boris Island” after London mayor Boris Johnson) or on the Isle of Grain (“Foster Island” after architect Lord Foster) involve tens of billions of pounds of public expenditure without apparently diverting funds from “high priority areas”. For such projects, it seems, money is no object.
Compare that to the claim that it is too expensive to change British road signs. Cost is now given as the main reason for postponing the conversion of road traffic signs. Yet cost does not seem to matter for the proponents of HS2 and new airports, despite the tens of billions of pounds of public spending they would require. And the estimates are still rising.
In June 2013, Danny Alexander, Chief Secretary to the Treasury, announced plans for £70 billion of investment in transport, including funding for HS2 (Sources: https://www.gov.uk/government/news/government-prioritises-long-term-investment-in-infrastructure-spending and https://www.gov.uk/government/speeches/speech-by-chief-secretary-to-the-treasury-danny-alexander-investing-in-britains-future). He has allocated £42.6 billion for building HS2 and another £7.5 billion for HS2 rolling stock [at 2011 prices], a total of £50 billion to be spent on HS2 alone. The cost estimate for HS2 has soared by £10 billion, MPs were told, compared to previous DfT estimates. (Source: http://www.guardian.co.uk/uk/2013/jun/26/hs2-costs-escalate-mps-told) Danny Alexander allocated £28 billion in enhancements and maintenance of national and local roads, including £10 billion to repair the national and local road network.
Sir Howard Davies and his colleagues at the Airports Commission have been looking at proposals to deal with the shortage of capacity at Heathrow, which include new airports or new runways at existing airports. The deadline for submissions to the Commission was Friday 19 July 2013 (Source: “Heathrow bosses detail three options for third airport runway”, on-line edition of Independent report published on 17 July 2013, link at http://www.independent.co.uk/news/uk/home-news/heathrow-bosses-detail-three-options-for-third-airport-runway-8713616.html?origin=internalSearch). This report gave the following cost estimates for the seven proposals:
Heathrow North: £14 billion
Heathrow North-West: £17 billion
Heathrow South-West: £18 billion
Total if all three projects were carried out at Heathrow: £49 billion
Gatwick with an additional runway: £10 billion
Stansted with three additional runways: £30 billion
Isle of Grain – “Foster Island”: £50 billion
Thames estuary – “Boris Island”: £80 billion
These proposals are, of course, alternatives.
A recent addition to the list of possible transport projects, not included in Mr Alexander’s June announcement, is Crossrail 2 in London at £12 billion.
Obviously, these figures are proposed costs of transport projects over a number of years. The DfT’s own grossly inflated cost estimate of £0.7 billion for the conversion of road signs to metric units, which would also be spread over several years, is just one per cent of the £70 billion that Danny Alexander proposed to spend on transport. Given the vast sums for major transport projects, it looks ridiculous for the DfT to imply that other projects will be put at risk by the metrication of road signs. Relatively speaking, the metrication of road signs costs pennies in the grand scheme of things.
Furthermore, unlike these mega transport projects, the cost of the conversion of road signs includes an allowance for “optimism bias”, without which it would be below £0.4 billion. Interestingly, this is still greatly in excess of the actual cost per sign of comparable projects in Ireland and elsewhere.
For such a modest investment, all road users will benefit from the use of a single, simple, rational and consistent measurement system but the biggest benefit will go to society as a whole as Britons will no longer need to be familiar with two systems of measurement. It will also benefit tourists and other Europeans, who will not be faced with or compelled to learn an unfamiliar system of measurement, given that the metric system is used around the world. Which other major transport project provides these universal benefits for such a modest investment?
(Note: in this article, we have used the now commonly accepted meaning of ‘billion’ as one thousand million.)