Road and Rail Safety
85. The evidence we received suggests that the
practical application of cost-benefit analysis and the use of
willingness-to-pay-based values of safety by decision-making and
regulatory agencies in the UK in their assessment of proposed
public and private sector safety improvements have not always
been consistent.
86. Prominent amongst the apparent inconsistencies
was the treatment, until recently, of road and rail safety. Thus,
while in assessing the prevention of single-fatality accidents
in which the victim has a degree of control, the rail industry
uses the same willingness-to-pay-based Value of Preventing a Statistical
Fatality (VPF) as is applied to road safety by the Department
for Transport (DfT), until 2003 a figure equal to about three
times the roads VPF was used in the assessment of projects aimed
at preventing multiple-fatality rail accidents. This was in spite
of the fact that empirical studies have indicated that members
of the public do not regard the loss of several lives in a single
accident as being markedly worse than the loss of the same number
of lives in separate accidents. In addition, according to evidence
presented to the Inquiry by Professor Andrew Evans, the sort of
level at which the VPF would need to be set in order to justify
the installation of the Train Protection and Warning System (TPWS)
is even higher (though this has already been undertaken by Network
Rail following the recommendations of the Cullen-Uff Inquiry)[56].
87. The application of a differential valuation
of safety on the two main modes of surface transport in the UK
would imply a potentially serious misallocation of resources.
Fortunately, as noted above, following widespread criticism of
the differential valuation, since 2003 the rail industry and the
Rail Safety and Standards Board (RSSB) in particular have now
abandoned the use of the two distinct VPFs and have instead elected
to apply a common baseline VPF equal to the Department for Transport
roads figure. For example, in its recent document, Valuing
Safety, the RSSB notes that:
"The term 'gross disproportion' was used by
some people in the past to describe the concept of using a higher
VPF for multi-fatality accidents. We can see no justification,
either in the Edwards judgement or in the balancing approach of
risk against sacrifice, for this interpretation"[57].
88. We welcome this move towards uniformity
of treatment of road and rail safety and we would encourage agencies
working in other relevant areas, such as the Department of Health,
the NHS and NICE, to follow in the same direction.
89. A second source of inconsistency—again
pointed out by Professor Evans—relates to the values of
safety that are implied by the actual levels of expenditure on
road safety undertaken in particular by local authorities and
subject ultimately to their budget constraints. Thus, Professor
Evans noted that in 1997 the Department for Environment, Transport
and the Regions (DETR) stated that:
"The Department has monitored the introduction
of recent local safety schemes and this is one of the few areas
where expenditure is underpinned by a considerable amount of knowledge
about costs and benefits. Clear benefits can be shown, with the
first-year rate of return of these schemes typically in excess
of 150%".
Professor Evans commented that:
"Such returns imply that, even if the average
project produced benefits over a period of only six or seven years,
the value of the accident savings would be 10 times the cost"[58].
90. This suggests that, based on the DfT willingness-to-pay
VPF, local authority road expenditure budget constraints are binding
well before the level of expenditure justified by cost-benefit
analysis can be reached.
91. Turning to centrally-funded expenditure on
road safety, while the DfT has set targets for road safety improvement
which involve, inter alia, a reduction in the number of
road fatalities by 40% by 2010[59],
there are indications that expenditure on trunk road safety may,
like local authority expenditure, fall short of the level that
would be justified on pure cost-benefit grounds. In practice,
it is difficult to extract information concerning the rate of
return on centrally-funded trunk road safety expenditure per
se (since safety expenditure and benefits constitute only
a relatively small fraction of the overall cost and benefit figures
concerned, and are also to some degree inextricable from the overall
figures). However, according to the Highways Agency[60],
overall trunk road investment benefit-cost ratios are in the region
of 3:1. If a similar benefit-cost ratio applies in the case of
safety expenditure, it would indicate a potential shortfall in
road safety expenditure.
92. Overall, there are encouraging signs that
the decision-making procedures employed in road and rail safety
expenditure planning are now generally well-founded, from both
a conceptual and practical point of view, and that the decision-making
agencies concerned are moving in the direction of consistency
of application between the two modes of transport. However, the
evidence also indicates that the actual levels of expenditure
undertaken on road and rail safety differ substantially in
the extent to which they actually reach the "ideal"
levels implied by the planning procedures concerned. Thus, while
even on the least demanding interpretation of the HSE's "gross
disproportion" prescription, the rail industry is required
to undertake all safety improvements for which benefits, appropriately
defined, exceed costs, there is clear evidence that local and
central government budget constraints impose a cut-off on road
safety expenditure well before all safety projects for which benefits
exceed costs have been undertaken.
93. It appears that project appraisal procedures
used in rail safety decision-making are now broadly consistent
with those applied to road safety. However, the evidence suggests
that government, in particular local government, expenditure on
road safety still falls short of the level that would be justified
by current safety project appraisal procedures. There is, therefore,
still a need for government to ensure that road safety expenditure
is set at an appropriate level, consistent with expenditures on
rail safety.
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