Closed consultation

Analysis to inform RIS3

Published 18 May 2023

Applies to England

A message from the Chief Analyst

Through our third Road Investment Strategy, the Department for Transport will be spending billions of pounds on vital infrastructure that millions of people use each day. Our strategic road network also transports the vast majority of goods, including essential food supplies, across the country including to shops, factories, hospitals, and schools. The infrastructure that we invest in now will be serving this country for many decades, shaping our national landscape and the way we live our lives.

It is crucial, therefore, that we make investment decisions using the best evidence possible. This demands a process of continuous improvement in analysis and our analytical models. We are working hard to do that, responding to the advice of users, stakeholders, and technical experts. This paper sets out DfT and National Highways’ analytical approach for the third Road Investment Strategy (RIS3), working alongside Transport Focus and the Office of Rail and Road. It sits alongside the core consultation document.

We have been developing our analytical approach, methods, and tools in a number of areas building on the sound approach developed for RIS2.

RIS3 analysis will aim to:

• provide a more detailed assessment of the benefits and costs of operations, maintenance and renewals
• better consider the impact of interventions on DfT’s RIS3 strategic objectives (such as growing and levelling up the economy and reducing our environmental impact) and on people through objective impact analysis
• deepen our understanding of environmental impacts (such as greenhouse gas emissions and air quality)

Beyond that, RIS3 analysis will aim to ensure decision making is more resilient to uncertainty through the use of DfT’s new common analytical scenarios. This approach ensures that we are keeping pace with changing user needs and taking forward the advances in DfT appraisal development strategy.

As part of the consultation, you are invited to comment on the degree to which these aims are achieved by the analysis. Your comments will play an important role in the shaping and structure of future work, and I would welcome your contribution.

Executive summary

This document outlines the approach being taken by DfT and National Highways, working with our partner organisations Transport Focus and the Office of Rail and Road (ORR), to develop the analysis that will inform the third Road Investment Strategy (RIS3).

RIS3 will set out investment in the strategic road network (SRN) during the third road period (2025 to 2030). It will build on the work taken forward in RIS2 on investing in the network and improving the way it is operated and maintained. It will set out the performance specification that we will expect National Highways to adhere to during that period.

Alongside this, it will set out a strategic vision for the future of the SRN looking towards 2050 that will help DfT to achieve its strategic priorities. We will assess that information using DfT’s 5-case business case framework to support refinement of options:

• strategic
• economic
• financial
• management
• commercial cases

Within that process analysis plays a key role involving the creation and application of a range of technical methods and tools to produce evidence. In this context, that covers territory familiar from the first Road Investment Strategy and second Road Investment Strategy, such as:

• statistics measuring the performance of the road network
• understanding what matters to road users
• road demand forecasts
• the likely economic, social and environmental impacts from potential road improvements

But we will also consider more innovative work, such as developing our approach to understanding uncertainty, undertaking objective impact analysis, better assessing the benefits of operations, maintenance and renewals, and deepening our understanding of environmental impacts.

Analysis therefore has an important role to play in informing RIS3, and we aim for it to be relevant, robust and trusted. We intend our approach to:

• build on the sound approach developed to inform RIS1 and RIS2
• continue to develop our analysis to better understand user needs
• advance as part of delivering the overarching developments in DfT appraisal guidance

We and our partner organisations have therefore been developing our analytical approach, methods, and tools in a number of areas including:

• building on the analytical platform set up as part of RIS2
• improving how we assess the benefits of operations, maintenance and looking at the impact of the interventions on DfT’s RIS3 strategic objectives and whether they are cost effective in achieving these objectives through Objective Impact Analysis. In doing so, this puts a greater focus on outcomes across strategic themes, for example economic, safety, carbon, and people-centred analysis
• updating our traffic demand forecasts to ensure analysis is based on the latest assumptions
• continuing to update and improve how we assess environmental impacts including air quality, greenhouse gas emissions, and biodiversity in our analysis
• ensuring we better understand the interactions between potential RIS3 schemes
• improving our approach to understanding and communicating the uncertainty around analysis

We believe the approach we have developed builds upon that used in RIS2. It advances analysis for RIS3 in line with the DfT appraisal development strategy.

We are now inviting views from a wider audience. This document accompanies DfT’s consultation on National Highways SRN Initial Report, in which we ask:

What, if any, comments do you have on the analytical approach?

The easiest way to respond to this question is via the online questionnaire. You can find a link to the questionnaire in the Ways to respond section of the GOV.UK home page for this consultation

We will use your responses to inform the development of our analysis, both for RIS3 and beyond.

Analytical approach

This document sets out a strategic outline of the approach being taken on analysis for the third Road Investment Strategy (RIS3) by DfT and National Highways, working with Transport Focus and the Office of Rail and Road (ORR). It forms a key part of the RIS3 consultation linking to the main consultation document and National Highways’ SRN Initial Report.

It also explains how:

• we are engaging with stakeholders and experts to make sure our analysis takes into account their views
• the analysis is evolving in line compared to RIS2
• we will build confidence that the analysis is robust
• we aim to develop the analysis post RIS3 consultation
• you can comment on the analysis for the consultation

RIS3 will set out investment in the SRN during the third road period (2025 to 2030) and will build on the work taken forward in RIS2 on investing in the network and improving the way it is operated and maintained. Key decisions will need to be taken about how much to invest, what to invest in and what the time profile of investment should be.

It will be based on a strategic vision for the future of the SRN looking towards 2050 and a revised performance specification for National Highways to adhere to between 2025 and 2030. RIS3 will be supported by a new statement of funds available (SOFA) setting out annual funding across the 5-year period.

The approach we have adopted builds directly on the principles established for RIS2.

Analysis is playing a key role in informing the debate

Analysis is informing all parts of RIS3, including the:

• strategic vision – examining what the future might look like, developing scenarios and tackling emerging issues like the role and impact of technology
• investment plan – analysis will be used to examine the impacts of packages of investment, to support the identification of a high performing investment plan
• performance specification – by identifying the impact of investment, analysis will inform targets and be used to develop the metrics that are key to assessing performance
• statement of funds available – analysis is being used to assess future funding scenarios for RIS3

In line with our general approach to RIS3, the analysis involves working in partnership across all 4 RIS3 partner organisations: Department for Transport, National Highways, Transport Focus and ORR.

Our analytical objectives

The ambition for RIS3 analysis is to successfully inform decisions through creating relevant, robust, and trusted analysis.

By relevant we mean that it should support decision making for RIS3.

Robust means that it provides sound information which can be relied upon when forming decisions.

Trusted means that we are building consensus amongst policy makers, analysts and key stakeholders on the methods and results.

We intend our approach to build on the approach developed to inform RIS2. It will evolve to keep pace with changing user needs and advance as part of delivering the overarching DfT appraisal development strategy.

Going forward we aim to develop the analysis for RIS3 further. We will create tailored analysis to inform each element of RIS3:

• strategic vision
• investment plan
• statement of funds available (SOFA)
• performance specification

Finally, we will develop our analytical tools in each area so that they are even better at informing key decisions.

We believe this approach will achieve relevant, robust and trusted analysis. In the next section we explain our approach to understanding users and how we have engaged with stakeholders.

Understanding user needs and engaging with stakeholders

We have undertaken a number of activities to understand users’ needs including:

• route strategies
• strategic studies
• national stakeholder events
• developing strategic objectives based on feedback by sub national transport bodies and insights from road users

More detail on these activities is set out in the main RIS3 consultation document.

Each of these activities has allowed us to inform analytical work on identifying issues and potential options on the SRN.

We are working closely with Transport Focus to ensure we are building the user perspective into everything we do.

We are working closely with Transport Focus to ensure that the recommendations it made in Road users’ priorities for the Road Investment Strategy, 2025 to 2030 have been acted on as far as possible, and built into our analytical framework. In particular:

In RIS2 we committed to develop new metrics or refine existing metrics for potential inclusion in RIS3. This includes a number of metrics where Transport Focus’s insight is particularly important, for instance:

• a measure of journey time reliability which reflects more accurately road users’ understanding of reliability
• delay from roadworks
• an improved ride quality metric which reflects road users’ experience of the network

Our approach to developing the RIS3 pipeline of schemes in development announced in RIS2 places greater emphasis on the strategic case for the scheme ensuring alignment with DfT’s strategic priorities (for example in terms of growing the economy and levelling up, safety, network performance, resilience and the natural environment), alongside value for money considerations. This analytical approach will be expanded and applied consistently across other elements of network improvement focussed on better understanding outcomes and making the most of the network we’ve got.

We will continue to engage on our approach as we continue to refine it.

Our aim is to improve and refine the approach we take, building up the evidence base over the remainder of RIS2 and RIS3.

DfT’s consultation on National Highways’ SRN Initial Report will form the next step of our engagement process. As part of the consultation you have the chance to comment on our analytical approach and feed into further work on the analysis.

Going forward we will continue to work with national stakeholder groups and analytical experts through the decision-making phase to ensure that RIS3 is well-informed by analysis which strikes the right balance between robustness and proportionality.

We are therefore confident that the analysis that we are carrying out will meet our core aims for the analysis for RIS3. The next section talks in more detail about how our analysis informs different parts of RIS3.

Analysis to inform the key elements of RIS3

This section outlines our analytical approach for informing each element of RIS3.

The strategic vision – we need to refresh our vision of the future, understanding new challenges like technology and the environment.

The investment plan – to understand where to invest we want to improve our understanding compared to RIS2 of:

• how the network performs, as a result of individual improvements and the overall programme
• the impacts of interventions on road users and the quality of their journeys
• the opportunities and impacts on the economy of road interventions

The performance specification – use the outcome models to inform target setting for RIS3.

The SOFA – working with ORR we want to improve our understanding of the efficiency of National Highways operations so that budgets can represent best VfM for the taxpayer.

The strategic vision

For the strategic vision we have worked hard to improve our understanding of both the future requirements the SRN, which includes understanding future demand for road travel and the uncertainties around it through the use of scenarios, and how RIS3 can contribute to DfT and wider government objectives.

DfT has 5 strategic priorities, of which the most relevant for RIS3 are:

• grow and level up the economy
• improve transport for the user
• reduce environmental impacts

In recognition of the more specific purpose of the SRN, we have come up with 6 strategic objectives for RIS3 which develop these priorities further and for which our analysis will be framed:

• growing the economy (including levelling up)
• improving safety for all
• network performance to meet customer needs
• a technology-enabled and enabling network
• managing and planning the SRN for the future
• improved environmental outcomes (including carbon)

The strategic vision will set out the policy narrative of what RIS3 will seek to achieve and how it will look to achieve it, trial any new policy commitments and some high-level performance aspirations. It will also include feedback from the SRN initial report.

The investment plan and performance specification

Overview of analytical approach for RIS3

Analysis across the RIS3 business case and decision-making process will aim to look at 2 elements.

Objective impact analysis

This looks at the impact of the interventions on the DfT’s RIS3 strategic objectives and whether they are cost effective in achieving these objectives. This analysis is complementary to the value for money analysis. It is designed to help the decision maker understand the intervention’s alignment to the strategic case for RIS3, aligning with the recent 2020 Green Book Review and 2020 Green Book. In doing so, this puts a greater focus on outcomes across strategic themes, e.g. economic growth and levelling up, safety, carbon, and people-centred analysis.

Value for money analysis

This will be carried out in line with HMT’s Green Book and DfT’s transport analysis guidance (TAG). This analysis looks at the impact on all individuals in the UK (positive and negative) and assess whether the benefits outweigh the costs. It is this analysis that will underpin the economic case in the business case.

RIS3 analysis will be based on the sound application of the DfT’s comprehensive appraisal framework for assessing economic, social and environmental impacts to RIS2 schemes.

The different elements of appraisal covered by TAG

Economic impacts

TAG element	Explanation
Transport user benefits	The value to transport users of cost and time saved on journeys.
Wider economic impacts	Economic impacts over and above those measured by user benefits.
Scheme costs.	The expected cost of delivering a scheme, accounting for optimism bias.
Reliability	The value of public transport punctuality and alleviating delays on highways.

Environmental impacts

TAG element	Explanation
Greenhouse gases	The cost of offsetting additional greenhouse gas emissions due to transport schemes.
Air quality	The human health costs of transport pollutant emissions (PM10 and NOx).
Noise	The human health and annoyance costs of transport noise.
Landscape	The value of the natural environment.
Biodiversity	The environmental capital of biodiversity and earth heritage.
Water environment	The environmental capital of natural water features.
Townscape	The physical and social characteristics of the built and non-built urban environment.
Historic environment	The value of man-made historic resources and assets.

Social impacts

TAG element	Explanation
Physical activity	The value to public health of decreased mortality risk through physical activity.
Journey quality	The value of the journey experience, such as comfort, crowding and information.
Accidents	The value of reducing fatalities and injuries on the transport network.
Accessibility	The value of social inclusion and equity to access to other people, places and services.
Security	The real and perceived value of safety and security for transport users.
Community severance	The cost of decreased community cohesion where divided by physical infrastructure.
Personal affordability	The ability of transport users to afford transport services.
Option and non-use values	The value of a transport service over and above its expected use or the altruistic value plated on its existence.

Analytical platform to support RIS3

Following on from RIS2, we have an analytical platform in place to assess the impacts of different investment packages and support target setting. The analytical platform includes the following key elements.

Regional traffic models

As part of RIS2, National Highways used their newly developed 5 regional traffic models (RTMs) covering the full SRN to forecast how traffic flows and speeds change following major road enhancements. These have been updated and will be used again as part of RIS3 – this time to inform carbon analysis and the safety outcome model.

The second-generation RTMs are amongst the largest and most complex traffic models of their kind in the world. Between them they cover all of England, focussing on the Strategic Road Network and incorporating our diversion routes and the Major Road Network. The models replicate travel patterns in 2019 and have been developed to allow decisions to be made using a sound, up-to-date evidence base.

Outcome models

National Highways aim to use outputs from the RTMs to assess the economic, social, and environmental impacts of RIS3 interventions on outcomes and inform target setting of metrics and key performance indicators (KPI) as part of the performance specification. Specific examples of outcome models include:

• a national safety model which predicts the number of people killed and seriously injured in road accidents per year
• a delay outcome model
• an environmental outcome model

Models will be reviewed, updated, or renewed for existing KPIs with appropriate models developed for new KPIs.

Our analysis will include understanding what performance would be delivered in the absence of additional funding (baselining) in key areas, e.g. safety, delay and carbon amongst others.

Objective impact analysis tool

To support the development of RIS3 National Highways have developed an Objective Impact Tool, which records the objective contributions of each planned National Highways scheme. It outlines the impact of each scheme, or a set of schemes, on achieving a set of strategic objectives. The tool enables decision-makers to identify cost effective ways of achieving specific objectives and to prioritise schemes whilst maintaining awareness of the trade-offs on other areas.

A wider economy model

The National Highways economy model will allow assessment of key economy impacts including how transport impacts on GDP, jobs, land use change, and economic welfare and will provide regional disaggregated impacts.

Operations, maintenance and renewals

The operations, maintenance and renewals (OMR) case will take into account key challenges for RIS3 and beyond. These challenges include the fact that the existing network is changing – it is aging, and increased levels of usage are accelerating deterioration. In addition, National Highways will assume the operations and maintenance responsibilities for a number of design build finance operate (DBFO) schemes.

The volume of technology assets and dependency on their functions will increase through RIS2, into RIS3 and beyond. National Highways has an important role to play in meeting the country’s green ambitions through improving biodiversity and sequestering carbon in National Highway’s soft estate and through reducing the carbon impact of our network, operations and from road use. This is critical in keeping the country moving as the impact of climate change increases.

The OMR case for RIS3 will seek to deliver the following, based on available data, and agreed approach.

Value for money - in line with the Green Book we will be using a whole life costing approach to assess the value for money of our spending in this area. In addition, we will move towards using a service value framework to look at the impact these areas of spend have on customers. These impacts will cover network performance such as road user delay (using the updated Traffic Impact Assessment model), reliability, safety and carbon, but in future road periods will expand to cover all the impacts of our spending. This will be a substantial step forward from the approach taken in RIS2.

Narrative informed by risk appetite - risk and uncertainty are important considerations in appraisal of all RIS3 investments, and OMR is no exception. This will mean demonstrating the implications of different levels of funding – e.g. understanding the long-term implications of short-term funding decisions for outcomes such as safety and network performance.

Create a line of sight between investment and outcomes that customers care about – this will demonstrate what investment is required to achieve performance outcomes, and what performance outcomes can be achieved for a certain level of investment.

Where there are gaps, we will develop a process to gather these data for future RIS.

Major projects

Analysis of major projects will look at 2 aspects:

• those schemes committed in previous road investment strategies that will still require funding in road period 3
• new RIS3 enhancements

For appraisal of both these aspects we will carry out an appraisal of the individual schemes considered in line with TAG. This will allow us to compare schemes on a value for money basis. As well as the standard value for money analysis carried out for the economic case, we will also be looking at objective impact analysis (see above) to see how the schemes compare in their contribution to the RIS3 strategic objectives as well as understanding interactions between potential schemes.

In addition to this analysis, we will for the complete portfolio of major projects look to see if there are additional portfolio wider economic impacts (over and above those included in the individual scheme assessment) as a result of land use changes. This will be undertaken in National Highway’s wider economy model.

Designated funds

Analysis of the impact of our designated funds will use analysis of our historical spending. We will be combining analysis of previous appraisals, alongside evaluation evidence to understand both the value for money of this spending and also the impact on strategic objectives.

Portfolio analysis

In addition to the analysis of individual RIS3 funding streams, we will also pull together all the analysis covered above and present the total value for money of the portfolio and the total impact of the portfolio on the strategic objectives. As part of this, we will also consider the use of place-based analysis. This will be used to present and assess different options to inform the final RIS3 settlement.

Distributional impacts and equality impact assessment

DfT will produce an equalities impact assessment of RIS3 to demonstrate how the Public sector equality duty will be met through the delivery of the strategy. This will be informed by analysis, including distributional impact analysis (in line with TAG) undertaken for committed schemes as well as new RIS3 enhancements.

The SOFA - understanding financial needs

Work is underway to improve the assessment of National Highways’ financial needs and develop the approach to efficiency.

National Highways and ORR are working together to understand the current and future condition of National Highways’ assets, and the cost implications this will have in RIS3 and beyond.

ORR, working with National Highways, is carrying out capability reviews of the level of efficiencies that could be delivered in RIS3 – these will examine National Highways’ approach to asset management and its procurement and project management.

National Highways will be commissioning external advice on the appropriate inflation assumptions to underpin the RIS, grounded in consideration of the relationship between inflation, risk, and efficiency.

Developing our appraisal

In addition to the objective impact analysis, improvements in assessing OMR and development of models to support the performance specification, we are looking to develop our understanding of methods and models in a number of other areas to ensure we fully consider the economic, social and environmental benefits of RIS3. This includes:

• ensuring we better understand the interactions between potential RIS3 schemes
• updating our traffic demand forecasts to ensure analysis is based on the latest assumptions
• improving our approach to understanding and communicating the uncertainty around analysis
• continuing to update and improve how we assess environmental impacts including air quality, greenhouse gas emissions, and biodiversity in our analysis

This section outlines how we are developing our methods and models in the areas set out above for RIS3.

Traffic demand forecasts

RIS3 will aim to use updated demand forecasts from the DfT’s National Trip End Model (NTEM) as well as the latest National Road Traffic Projections (NRTP) from the DfT’s National Transport Model (NTM).

They (NTEM and NRTP) feed into the forecast traffic models used for our scheme analysis, the regional traffic models used for carbon analysis and the safety outcome tool, as well as other performance models such as the delay outcome model. Beyond this, RIS3 will aim use a set of common analytical scenarios to ensure decision making is resilient to uncertainty.

Environmental impacts

As part of RIS3, environmental impacts such as air quality, greenhouse gas emissions, biodiversity, landscape, townscape and the historical environment will be assessed in line with the latest TAG guidance.

DfT and National Highways are also working together to ensure that the environmental appraisal methods used take account of the recent Environment Bill and the new environment targets in order that we fully understand the proposals impact on these new areas. For example, considering how our assessment of air quality aligns with PM2.5 targets.

One area, where we have done a lot of work since RIS2, relates to better understanding greenhouse gas (GHG) emissions - also commonly referred to carbon emissions. In particular as part of RIS3, our analysis will seek to further improve our understanding of the impact of the current SRN on carbon as well as the impact of any additional spend on the network as part of RIS3.

We will aim to include assessments of the impact of both tailpipe, embedded and operational carbon. Tailpipe carbon will be assessed using National Highway’s regional transport models (for the SRN baseline) and scheme specific models (e.g. for RIS3 schemes). Embedded and operational carbon will be assessed using National Highways carbon tool. GHG emissions will be estimated by carbon budget period.

Interactions between RIS3 schemes

We have developed a scheme interaction assessment technique (SINAT) to help assess and better understand the potential interactions between schemes being considered as part of RIS3. SINAT, which uses advanced processing of select link analysis results and matrix manipulation to assess scheme interactions, will help us prioritise which schemes to include in the RIS3 programme.

Uncertainty

There is considerable uncertainty about how the transport system will evolve in the future, particularly with the potential for emerging trends in behaviour and technology to drive significant change over time. To ensure decision making around RIS3 is resilient to future uncertainty, it is important that our analysis recognises this.

Our analytical approach will follow the guidance set out in the TAG uncertainty toolkitand will intend to make use of the common analytical scenarios alongside other relevant scenarios and sensitivity tests. These common analytical scenarios, developed by DfT, cover key areas of national transport uncertainty, including:

• growth in the population and the economy
• distribution of economic activity across the regions
• technological advances and uptake
• social and behavioural change
• level of decarbonisation and fleet mix ambition

Analysis robust enough to inform decisions

We have sought to adopt a balanced approach, targeting our analysis to those areas where it is most important to have it.

Alongside this we have put in place a carefully considered approach to assuring the analysis, tailoring the level of assurance based on the complexity of the analysis and the decision it will inform. Our approach covers all RIS3 analysis including by DfT, National Highways, Transport Focus and ORR.

Our analytical assurance processes are in line with DfT strength in numbers guidance. This involves tiered assurance:

• tier 1 - at the level of the analysis, within organisations
• tier 2 – within organisations
• tier 3 – across organisations
• tier 4 – independent external experts

This approach to analytical assurance is embedded in the overall assurance approach for RIS3.

Next steps

This report has outlined our approach to using analysis to inform RIS3. The accompanying SRN Initial Report by National Highways sets out the challenges being faced by the SRN and early investment priorities.

Following the consultation on National Highways’ Initial Report, we aim to continue to refine and update our analysis so that it is current and robust through to the publication of RIS3 in 2024. The results from the consultation will help inform this.

Once we have published RIS3 in 2024, we move into the mobilisation and delivery phases. This will involve enhancement projects going through each of National Highways Project Control Framework (PCF) stages. To meet the requirements of the PCF process, the analysis around the costs and benefits of schemes will be updated. Consequently, the analysis for RIS3 should not be seen as final but as a point on a trajectory of improving evidence.

DfT and National Highways will continue to work in partnership with ORR, and Transport Focus to deliver the analysis, and engage with stakeholders to ensure it is robust, that we are keeping pace keep pace with changing user needs and that we lead the delivery of advances in DfT’s appraisal development strategy.

The consultation

In conclusion our aim is to produce analysis that is:

• relevant to the decisions that need to be made in all the key RIS3 areas
• robust enough to be relied upon for the decisions at hand
• trusted by stakeholders

We believe the approach we have developed builds upon that used in RIS2. It advances analysis for RIS3 in line with the DfT appraisal development strategy.

We are now inviting views from a wider audience. This document accompanies DfT’s consultation on National Highways SRN Initial Report, in which we ask

What, if any, comments do you have on the analytical approach?

The easiest way to respond to this question is via the online questionnaire. You can find a link to the questionnaire in the Ways to respond section of the GOV.UK home page for this consultation

We will use your responses to inform the development of our analysis, both for RIS3 and beyond.