The National Audit Office (NAO) is the UK’s independent public spending watchdog, they support Parliament in holding government to account. Their ‘Road enhancements: progress with the second road investment strategy 2020-2025‘ report, published in Nov 2022 has voiced concerns about value for money issues on projects such as the proposed Lower Thames Crossing (LTC).
The report covers the second road investment strategy RIS2 which runs from 2020-25. It states that some level of change is to be expected with large projects such as those in the road investment programme, but that the level of change in RIS2 had been more than anticipated. Also that National Highways and DfT could have done more to plan for and manage the potential risks.
On the topic of the proposed LTC specifically the report details that the estimated cost had risen by around £1.9bn since March 2020. The estimated cost is now officially detailed as being £9bn, although host Local Authorities, some MPs, and others estimate the cost to be £10bn or more.
LTC value for money rating
The report also highlights that in September 2022, there were four projects on the watchlist rated as poor value for money and four as low value for money. This included the LTC which rated as low value for money. Projects that remain on the portfolio below the required value-for-money threshold are agreed with DfT.
In the 2022 LTC DCO application document ‘Combined Modelling and Appraisal Report‘ the Initial Benefit Cost Ratio (BCR) is listed as 0.48 which registers as ‘poor’ on the DfT’s Value for Money ratings. The Adjusted BCR is listed as 1.22 which registers a ‘low’ value for money.
The BCR has dropped since the withdrawn DCO application of Oct/Nov 2020, when the Initial Benefit Cost Ratio (BCR) was 0.68, and when wider economic benefits were added, the adjusted BCR was 1.44.
What have the NAO said?
Gareth Davies, head of the NAO has said,
“DfT and National Highways must now fully address the rising cost of its revised portfolio of projects, undertaking a review of all road plans that it plans to move into the time period of its third road strategy (2025-2030).
“This review must consider if these projects remain feasible and provide optimal value for money.”
What will happen as a result of this report?
Well of course that remains to be seen, but the Transport Select Committee have already launched a new inquiry into RIS2 and RIS3. TCAG will be submitting evidence to this inquiry since it is so relevant to the LTC. You can find out more about the inquiry and how you can submit your own evidence if you wish here. The deadline is Mon 6th February 2023.
It is expected that the inquiry evidence will be reviewed and then decisions will be made. How long that will take is unknown at this stage. We can only hope that those carrying out the inquiry, and the ultimate decision makers will see what we already know, that the proposed LTC would be a complete waste of £10bn+ of taxpayers’ money.
National Audit Office update and info on the report – click here
Road enhancements: progress with the second road investment strategy 2020-2025′ report (Nov 2022) – click here
ITV – A303 Stonehenge tunnel and Lower Thames Crossing billions over budget, report finds (Nov 2022) – click here
NCE – National Highways monitors Lower Thames Crossing and Stonehenge Tunnel ‘value for money issues’ (Nov 2022) – click here
Highways – Low value RIS 3 could worsen north-south divide (Nov 2022) – click here
Cost of the proposed LTC – click here