UK Department for Transport Cost Benefit Analysis Tools

This page discusses three tools used by the UK's Department for Transport (DfT) for evaluating the costs and benefits of new transport developments in the UK.

COBA (Cost Benefit Analysis)
COBA focuses on each link of the proposed development separately. It identifies the main benefits in terms of time savings, and the value of reduced accidents. These benefits are compared against costs of construction and maintenance. Consideration is also given to the ‘do nothing’ approach.

Costs
COBA considers two main forms of costs, capital costs and maintenance costs.

Capital Costs: Capital costs include the construction costs including land purchase, design etc. Estimates are also included for traffic delays caused by construction.
Maintenance Costs: These include the annual costs of maintaining the new road. This is divided into non-traffic-related and traffic-related costs. Non-traffic maintenance costs include drainage and lighting, while traffic related costs include resurfacing and patching.

Benefits
COBA considers three main categories of benefits. These are journey time-savings, vehicle operating cost savings, and reductions in accidents.

Journey time-savings:
This is calculated by investigating the time reductions for road travel obtained through projects which reduce traffic congestion, for example, the M1 road-widening. Time-savings are categorised into:

Working Time: This considers the average hourly wage rate.
Commuting Time.
Other Time.

Both two and three adopt the willingness-to-pay approach. Estimates are taken from empirical studies of the commuters willingness-to-pay for increased speed of travel.

Criticisms of COBA

A number of criticisms exist with the current form of COBA used by the Department for Transport in the UK. Firstly COBA suffers from many of the usual problems associated with CBA including quantification, and the appropriateness of applying monetary valuations to certain costs/benefits such as life. However, COBA is also criticised for its narrow focus on user-costs and benefits.

Some analysts, and particularly environmentalists, argue that COBA does not adequate consider the wider implications and effects of projects. These include the environmental impacts of new roads or road widening, and the potential social impacts associated with projects, such as taking the flow of traffic away from areas which may impact businesses in an area e.g. hotels, cafes, pubs, petrol stations etc. Since 1998, though, COBA has been used not alone, but as part of wider appraisal method which does provide some consideration of these factors. However, this wider appraisal method is not without criticism. It uses a 7 point scale for appraising these environmental and social factors, which some argue is too simplistic and does not give due consideration to the wider impacts of certain projects.

TUBA (Transport Users Benefit Analysis)

Since 2012, the TUBA software package has been used in the economic appraisal of transport schemes, to conform to the Department for Transport's guidance on Cost-Benefit Analysis.

"The software implements a 'willingness to pay' approach to economic appraisal for multi-modal schemes with fixed or variable demand."

COBALT (Cost and Benefit to Accidents - Light Touch)

COBALT is a software system that attempts "to quantify and monetise various social impacts in transport appraisals",

"Social impacts cover the human experience of the transport system and its impact on social factors, not considered as part of economic or environmental impacts. There are eight social impacts, namely:"

Accidents
Physical Activity
Security
Severance
Journey Quality
Option and Non-Use Values
Accessibility
Personal Affordability

Next: Economic Impact Assessment