Alliance against road building

PRESS RELEASE – 27th July 2006

SOARING ROADS COSTS SAVAGED BY MP'S

Reacting today to the scathing report into the rising cost of the Highways Agency roads programme by the influential Transport Select Committee [1], Road Block said that the roads programme must be scrapped, warning roadbuilders were lying to gain approval for schemes, and that costs were only going to go higher. Highways Agency road schemes are currently rising an average of 67 per cent from approval to the most recent estimates. The alliance against road building said the fault lay with the Department for Transport for clearly not scrutinising the justification for road schemes adequately before granting approval.

Findings of the report:

• "the cost overruns on these projects could be in excess of £1 billion" (para 107),
• "The Highways Agency has lost budgetary control" (para 104)
• "it appears inevitable that costs will rise" (para 103)
• "yet-to-be-completed road projects would be 50 per cent higher than originally estimated" (para 104)
• "Such an increase would be an irresponsible and unacceptable waste of public money" (para 104).

The National Audit Office is currently conducting an investigation into the reasons behind the cost increases and is due to report in the Autumn. Road Block is contributing evidence for the investigation. Road Block also contributed to the Select Committee's inquiry. Road Block has discovered that national road schemes are rising an average of 67 per cent, whilst road schemes are averaging 47 per cent [2]. This year the Highway Agency's annual roadbuilding budget almost doubled from £589 million to £1046 million to cover up for the massive cost increases.

Road Block coordinator Rebecca Lush said:

"Road schemes are not only bad for climate change, but are also very bad value for money. It is time the Department for Transport culled its bloated and expensive roads programme. Rising road costs are not just down to inflation and oil prices, but a deliberate underestimating of costs in order to gain approval for schemes. The blame lays squarely with the Department for Transport who approve every single one of these roads schemes, turning a blind eye to dodgy appraisal. This is a scandal, and results in billions of pounds being wasted. As the Committee acknowledged, things are only going to get worse with costs only going to rise further."

The Select Committee's report into the Department for Transport's Agencies also criticised the arrogance of the Highways Agency who did not respond to requests for information on cost over runs by the Committee, despite many reminders.

The Treasury introduced 'optimism bias' in 2003 in order to deal with the tendency of road builders to exaggerate the benefits of their schemes and downplay the costs. However, schemes approved by the Department since the 2003 guidance are still experiencing rising costs. The hugely controversial Weymouth Relief Road [3] has just leapt in cost to £77 million - an increase of 41 per cent since approval just two and half years ago. The devastating High and Low Newton road in the Lake District leapt by 60 per cent when fully approved. Both schemes were approved after the introduction of optimism bias.

Last week on 20 July the Secretary of State for Transport announced he was 'minded to' approve the A3 Hindhead scheme, after first holding a consultation on the significant cost increase. The scheme was approved into the Highways Agency's road programme (Targeted Programme of Improvements - TPI) in 2001 at a cost of £107 million. In a Written Answer of 24 May Road Minister Stephen Ladyman admitted costs had risen to £239 million [2]. The latest increase announced on 20 July takes the scheme up to £370.9 million - an increase of 247 per cent since first approval.

The alliance against roadbuilding warned of other schemes with huge cost increases.

• The A127/A1159 Priory Crescent, Southend on Sea scheme has risen an astonishing 745 per cent since approval in 2000 - from £3.5 million to £29.567 million. The DfT are currently deciding whether to approve the cost increase.
• The extremely controversial A628 Mottram to Tintwistle Bypass through the Peak District National Park has leapt 9 per cent to £103 million, with more increases predicted
• The controversial Bexhill to Hastings Relief Road, approved only in 2004 has already started to experience creeping costs, with a recent rise to £51.56 million.

The Department for Transport have recently approved cost increases for:

• A590 High & Low Newton Bypass on 11 April, despite a 59 per cent increase since approval in 2003 [4]
• A419 Blunsdon Bypass on 9 March despite a 124% increase in cost since it was first approved in April 2002 [5]
• M6 Extension from Carlisle to Guards Mill on 23 March despite a whopping 280% cost increase since it was first approved in 2000 [6]
• Connecting Derby road scheme was approved in 2000 at a cost of £11.268 million but had its approval withdrawn due to cost escalation, but was re-approved at £33.5 million in April 2006, a 197 per cent increase [7]

Notes to Editors:

[1] The Ninth Report of the Transport Committee can be found here:
http://www.publications.parliament.uk/pa/cm/cmtran.htm

[2] Written Answer by Stephen Ladyman to Parliamentary Question by Chris Grayling on 24 May 2006. http://www.publications.parliament.uk/pa/cm200506/cmhansrd/cm060524/text/60524w0554.htm
Tables are here (http://www.roadblock.org.uk/roadschemes.htm) showing the latest figures.

[3] The Weymouth Relief Road was approved in Dec 2003, at a cost of £54.546 million. In a Written Answer by Stephen Ladyman of 24 May 2006 Roads Minister Stephen Ladyman provided the most recent costs of road schemes which showed the scheme had leapt to £77 million - an increase of 41 per cent.
http://www.publications.parliament.uk/pa/cm200506/cmhansrd/cm060524/text/60524w0554.htm

[4] http://www.highways.gov.uk/roads/projects/5066.aspx

[5] http://www.roadblock.org.uk/press_releases/2006-03-09.htm

[6] http://www.roadblock.org.uk/press_releases/2006-03-23.htm

[7] There is no link for this information, as the DfT have kept the approval and increase secret.