Final LTP March 2006

This section illustrates the importance we place on obtaining value for money (VFM) from both Major Schemes and schemes within the Integrated Transport and Maintenance Blocks and the steps taken to achieve it.

At the strategic level, we have developed our programme to ensure a balance between VFM and delivering outcomes which support the Transport Shared Priority, Regional Spatial Strategy and LTP2 objectives.  VFM principles have been applied to both capital and supporting or associated revenue funding.  We have linked the outputs from these considerations with the overall Quality of Life objectives that are frequently identified in strategic and local partnership working.

Encouraging modal switch was identified by WMAMMS as the most cost effective approach for tackling transport problems.  As part of our strategy we have a significant programme to help people make 'Smarter Choices' to encourage modal transfer to more efficient forms of transport.

At the detailed level of scheme development and implementation, we have a substantial technical expertise resource across the Metropolitan Area on which we draw to ensure value for money is obtained.  This is explained in greater detail in Chapter ‘Opportunities’ (Analysis Methodologies) as well as later in this chapter.

Making the best of what we have - Influencing Travel Behaviour

WMAMMS identified that influencing travel behaviour was the most cost-effective means of tackling an increasing number of trips.  We have embarked on a range of initiatives to encourage modal transfer.  In addition to investigating road pricing, these for example also include building on our nationally recognised Company TravelWise scheme, enhancing central funding for school travel plan work from local resources, and developing communications to deliver positive news about the options available.  A new development 'Community TravelWise' will broaden the number of people targeted.

Persuading people to make 'Smarter Choices' about short journeys, leading to more walking and cycling, is one example of our strategic approach to achieving value for money.  If a modal shift of 15% to more physically active travel was achieved, this would improve personal health and could save 50 premature deaths a year in our Area.  Promoting more physically active modes of travel, together with better health, will help tackle the increasing obesity which costs the National Health Service some £500 million annually ('Tackling Obesity in England', National Audit Office, 2001).  Hence our support for encouraging more cycling and walking (as detailed in the Appendices).

We will initially pursue two areas of activity.  One is to build a better understanding of the travel network, in order to develop 'informed travellers'.  The second is to stimulate behaviour change amongst those for whom it is both practical and feasible.  This could include measures such as targeting people moving home and having to establish new travel patterns with information about the alternative travel choices available.

Secondly, significant modal transfer will only be achieved by 'improving the public transport offer', and making sure viable alternatives are seen to be in place.  We are making sure that improvements to the public transport network are communicated so that people can make 'Smarter Choices'.  Actions which intensify the use of capital investment will further improve VFM and enhance the value of our assets to the West Midlands.  These could be through the extensive marketing of public transport benefits, undertaken as part of scheme development together with subsequent campaigns.

Managing the Network

We must obtain VFM by 'making best use of the transport network'.  Immediate measures to obtain value for money will be taken by making better use of existing Integrated Transport Block funding.  This will be used to drive existing assets harder, such as network information and management systems, that provide immediate benefits to network management and complimentary measures to existing and proposed major schemes.  Analysis has identified potential efficiency increases from measures such as Red Routes and enhanced Urban Traffic Control (UTC) that also offer real VFM solutions.  In the longer term, the increasing use of demand management measures will also contribute to making best use of the network.

Regeneration Support

The third strand of our strategy, 'targeted investment to support regeneration', also delivers value for money.  Our investment complements that of other public bodies.  For example, the i54 Major Scheme on Wolverhampton's Wobaston Road supports Advantage West Midlands' investment and the Major Scheme on Birmingham's Chester Road complements Jaguar's investment in new manufacturing capacity.  We want to ensure that public and private investment contribute efficiently to regeneration of the local and regional economy.

Enhanced value for money is achieved from LTP funds by supplementing them with funds secured from non-LTP sources.  These sources include section 106 agreements related to new developments and partnership agreements.

Major Schemes

The overall shape of the Major Scheme programme reflects the Secretary of State's response to WMAMMS in 2003. 

Since the preparation of the Provisional LTP2, a rigorous prioritisation process has been developed in partnership with Regional Assembly, Government Office and Development Agency (AWM) representatives for assessing the priority of individual Schemes.  This process focuses on two key issues in respect of each proposal: VFM, reflected by the Benefit Cost Ratio (BCR) and contribution to achieving regional objectives as expressed in the RSS.

The BCR of each Scheme is a major determinant of the priority accorded to it.  Where full BCRs have not yet been produced, Schemes are only given provisional priorities, with a final priority only being given once a BCR is confirmed, again reflecting the importance attached to achieving VFM.

The prioritisation process also takes account of third party contributions and whether they will be at risk if Schemes are not programmed to commence within certain time scales.  The final step in the process will be considering how transport, housing and economic development proposals marry together to be mutually supportive and give best VFM across these three budget areas.  This final step occurs after the approval process for this LTP2 commences so there may be a need to review the programme in the future.

We also actively seek  to achieve VFM in our procurement and construction of Major Schemes.  New approaches, such as early contractor involvement and joint procurement of works for the Red Routes network, are being taken forward in a process led by Dudley Borough Council.  An important dimension of this is a full consideration of the risks associated with projects and responsibility for managing them.  The proposed Metro extensions are being procured through different contracts for design, build / maintain and operate to minimise risk and thereby maximise VFM.

Minor Schemes

Each Authority develops their own detailed programme within the framework of the LTP2 to ensure that differing local problems and opportunities are taken account of.  Individual authorities have their own internal procedures for ensuring proposals represent VFM.  Where programmes are funded jointly across the Metropolitan Area, a similar responsibility is taken on board by the Joint Planning & Transportation Sub-Committee.  The P&T Sub-Committee Members Monitoring Group has been given this role.

Supporting the individual internal processes there are well developed procedures for Peer Review across the Area to ensure we learn from each other and develop best practice approaches to ensure VFM.  A common theme is to ensure that when considering the costs of schemes, the ongoing revenue costs are properly taken into account and will be affordable in the future.  Examples include Birmingham City Council and Centro where reports seeking approval for schemes must include an analysis of future revenue costs and their impact on future budgets.

A further example of a process to ensure VFM in the ITB is the Transport Investment Model developed by Centro.  The principles of this are set out in Figure 6 ‘Centro Capital Evaluation Process’.  As this illustrates all schemes costing above £250,000 have a mini business case developed to ensure they represent VFM and contribute to meeting objectives.

With a multiplicity of small schemes it is not practical to examine low cost alternatives for every initiative.  However, adopting recognised best practice approaches to dealing with issues will help ensure VFM.  We have a number of officer working groups, covering a wide range of responsibilities, for example Road Safety, Maintenance, TravelWise, Monitoring, Safer Routes to School, Walking, Cycling and Powered Two Wheelers.  These groups are overseen by the Principal Engineers Group and have been identifying best practice and sharing experiences to improve the delivery of and outcomes from schemes, included in their Terms of Reference.  This includes benchmarking against each other and other Metropolitan Authorities and working jointly where appropriate to secure VFM, for example in the monitoring activities undertaken where a single Metropolitan approach gives better VFM than eight individual Authorities undertaking the work.

Table 1 ‘Return on Local Safety Schemes Completed in 2000/01’ illustrates the outcomes of road safety schemes.  Technical information as to which schemes achieve best VFM is exchanged between Authorities to help promote best practice.  At the bottom of the table is joint data for previous years.  We are a Centre of Excellence for Integrated Transport specialising in Road Safety.  Compared with other major urban areas, we have the lowest number of accidents per 1000 licensed vehicles and the second lowest casualty rate per head of population.

Where schemes are being undertaken across boundary, similar processes apply.  One example is Bus Showcase schemes where detailed assessments are undertaken before and after implementation and results monitored.  We have used the results to develop the Bus Showcase handbook, which is a good practice guide on ways to achieve VFM.  Table 2 ‘Increases in Patronage on Bus Showcase Routes’ and Table 3 ‘Showcase User Previous Modes’ illustrate increases in bus passenger numbers and transfer from other modes.  A strategic review of Bus Showcase is currently underway to reflect on experience to date and consider ways of strengthening the Showcase concept further.

Table 2 Increases in Patronage on Bus Showcase Routes

	On Route	In Corridor
Line 33	29%	5%
SuperLine	18%	8%
Prime Line	5%	5%
Route 67	38%	6%
Route 404	12%	12%
Route 559/560	7%	7%

Table 3 Showcase User Previous Modes

	Previous Mode
	Car	Walk	Did not Travel
Line 33	4%	2%	2%
SuperLine	13%	10%	2%
Prime Line	5%	1%	16%
Route 67	3%	1%	20%
Route 404	5%	<1%	23%
Route 559/560	5%	<1%	21%

VFM Monitoring

An enhanced monitoring regime has been introduced by the West Midlands Planning & Transportation Sub-Committee in response to the greatly increased programme we are now delivering.  This will ensure that we respond quickly to programme changes and continue to deliver VFM schemes that make best use of the resources available.  It also ensures that the balance of schemes and programmes are relevant  to delivery of  LTP2 targets.  This Monitoring Group, comprising of senior Members of the Sub Committee, meets monthly to review progress with schemes and review proposals for new schemes.  It instigates corrective action if schemes are not being delivered and/or not producing the outcomes we seek.  The VFM of schemes is also reviewed by them.

We have also monitored our Red Route Demonstration Project.  Surveys conducted soon after completion indicate improvements in safety, bus service speed and reliability, traffic speed and journey time reliability, and parking enforcement and compliance.

We have shared these lessons through workshops on Red Route implementation, through the maintenance of a web site of 'before and after' studies of safety schemes and through the Bus Showcase Handbook.  The Handbook features on the 'Bus Priority' web site (www.buspriority.org.uk) reflects our involvement in one of the DfT Bus Forum’s Task & Finish Groups.  Seminars have also been arranged to share our experience with metropolitan and shire authorities.

Highway Lighting and Structural Maintenance

A detailed description of the work of the District Maintenance Engineers activities is included in Chapter ‘Implementation’.  This identifies the variety of ways in which VFM is secured in this area of work.

Scrutiny

All authorities have active scrutiny processes in operation and transport related schemes and programmes have been subject to a variety of scrutiny processes.  A common theme of all scrutinys undertaken has been whether proposals or programmes offer value for money and deliver appropriate outcomes.

Private Finance Initiative

There are currently two proposals in the Area.  The more significant one is the £379 million Birmingham proposal that is focused on the maintenance and management of the highway network.  If this is successful it will deliver highway improvements substantially earlier than would otherwise have been possible.  It will also mean that the funding for maintenance and operational costs of the network is committed for 25 years.  It would be the largest PFI of its type in the country.

The second is the Walsall Integrated Transport proposal which covers a range of transport activities.  A decision on whether this will be granted PFI credits is awaited.

The Walsall Street Lighting PFI is progressing well, bringing about early improvements to lighting in the Borough. 

All these schemes have been pursued as they offer a VFM approach to bringing about early improvements.