Transparency data

Value for money indicator 2019

Updated 19 December 2022

Publication date: December 2020

Geographical coverage: United Kingdom

Scope: Projects that received final ministerial approval in the 2019 calendar year[footnote 1]

The value for money (VfM) indicator reports the proportion of project spending that is assessed to be high or very high value for money, for projects that receive final ministerial approval in a given year.

Main objectives

DfT has invested and continues to invest in a wide portfolio of projects. As part of our transparency agenda we routinely publish data on VfM. This indicator is intended to provide transparency over the expected VfM – to taxpayers and society as a whole – of these projects. VfM is one factor considered in making decisions about schemes.

Note: This indicator is an ex ante assessment of VfM. That is, it reports the VfM that projects are expected to deliver at the time the decision to invest in them is taken.

This assessment necessarily makes assumptions about the future, which is inherently uncertain. Though we mitigate this as far as possible in the analysis, the VfM of each project reported here may differ to that achieved in reality for example once implemented. An evaluation of the VfM achieved by the projects included within this indicator is not within the scope of this report[footnote 2].

The value for money indicator

In 2019, 19 projects were approved with a total expected cost of £638 million – 80% of this approved spending was assessed to be high or very high VfM. These projects are expected to return the equivalent of at least £2 in benefits for every £1 invested.

The breakdown of approved project spending that falls within each VfM category, as a percentage of total project spending, is shown in Table 1.

Table 1. value for money indicator 2019

VfM category Poor Low Medium High Very high VfM indicator (sum of high and very high VfM) Total
Approved spending 1% 6% 13% 70% 10% 80% 100%

The 2019 VfM indicator explained

All approved projects in 2019 are presented in Table 2, no projects were excluded for this calculation.

Table 2. VfM of Department for Transport (DfT) approved projects in 2019 (calendar year)

Project name Project PVC(£m) VfM category
Preston Western distributor road 135 High
Transforming cities fund 67 High
Gatwick station 61 Medium
Nexus fleet replacement 48 High
Sunderland strategic transport corridor phase 3 55 High
Worcester Southern link road phase 4 (Carrington Bridge) 44 Very high
Exeter St Davids to Newton Abbot eesilience improvement (Dawlish) - phase 1 and 2 38 Low
Forder Valley link road 37 High
Stubbington bypass 29 High
A120 Little Hadham bypass and flood alleviation scheme 22 High
Arborfield Cross relief road 22 Medium
White Hart junction 21 Very high
Wichelstowe Southern access road 20 High
National cycle network (NCN) 14 High
Kings Lynn to Cambridge 8 car 11 High
PSO London to Derry 2019 4 Poor
Cycle rail round 5 4 High
PSO Newquay to Gatwick/Heathrow 4 High
PSO London to Dundee 2019 2 Poor

Notes are:

  • present value costs (PVC) is rounded to the nearest £m
  • the business cases for some of these schemes are developed by the local authorities promoting them, rather than DfT. However, they are assessed by and receive final approval from DfT. The projects’ costs reported may also include a small proportion of local authority investment.

In 2019 the proportion of project spending that was high or very high VfM was 80%. In 2017 and 2018 the proportion of project spending that was high or very high VfM was 78% and 57% respectively. Emphasis should not be placed on the changes across years, because the indicator can be affected by the number and type of schemes and the size of the PVC for the individual projects approved in any given year. It is therefore not entirely appropriate to compare the individual years’ figures, but to look cumulatively across years. This shows that since 2015 (2015 to 2019), 76% of spend has been on projects set to deliver at least high VfM (which means providing benefits to the public worth £2 or more for every £1 invested).

The 2019 indicator is made up of 19 projects, with spend being spread relatively evenly between these projects.

Of the 19 projects 14 fall into the high and very high VfM categories.

Table 3 illustrates the difference in the spending per VfM category from 2015 to 2019. It gives an indication of how the size of the total PVC for different VfM categories affects the indicator.

Table 3. total PVC and proportion of spending per VfM category for projects approved 2015 to 2019

VfM category 2015 proportion of approved spending 2016 proportion of approved spending 2017 proportion of approved spending 2018 proportion of approved spending 2019 proportion of approved spending 2015 PVC (£m) 2016 PVC (£m) 2017 PVC (£m) 2018 PVC (£m) 2019 PVC (£m)
Poor 0% 0% 1% 0% 1% 0 1 5 0 6
Low 17% 0% 2% 0% 6% 196 0 15 5 38
Medium 3% 5% 19% 43% 13% 36 65 129 661 83
High 20% 86% 28% 57% 70% 233 1038 191 871 445
Very high 59% 9% 49% 0% 10% 681 103 332 0 66
High and very high 80% 95% 78% 57% 80% 914 1,141 523 871 511
Total 100% 100% 100% 100% 100% 1,146 1,207 672 1,533 638

Annex A: derivation of the VfM Indicator

The VfM indicator is derived by taking the number of approved projects that fall into each VfM category (as defined below, and weighting each project by its cost (approved spending).

This helps ensure the Indicator is relative; even if the majority of approved projects for any given year are high or very high VfM, the indicator will be lower if there are some projects with sizeable costs that are lower VfM (poor to medium).

Cost here is defined as the PVC to the broad transport budget, the public budget available to fund transport schemes.

This includes the operational and capital expenditure expected over the lifetime of each scheme, adjusted for inflation and discounted to reflect the tendency to prefer the receipt of goods and services now rather than later. It is net of any third-party expenditure (for example from the private sector) and revenues and also accounts for cost savings that may be realised to the broad transport budget[footnote 3].

PVC should only comprise public accounts impacts (costs borne by public bodies) that directly affect the budget available for transport. All other impacts, including operating costs and revenues for private sector transport providers and impacts on wider government finances, should be included in the present value of benefits (PVB).

Costs to both DfT and local authorities have been included in the indicator. This reflects all public money committed to the project and is consistent with how we measure a project’s cost in its VfM assessment.

The proportion of approved spending that falls within each VfM category is subsequently calculated, and presented in table 1 in the 2019 VfM indicator report. The proportion that is assessed to be high or very high VfM is then used as the VfM indicator.

Annex B: decision making and VfM assessment in DfT

Decision making in DfT

Value for money is an important consideration given DfT’s commitment to managing public money. It is not however the sole consideration when determining whether to approve a project.

In DfT, ministers take investment decisions based on the evidence presented in the “Transport business case”, which follows the ‘Five Case’ model of decision-making recommended by His Majesty’s Treasury. Before approving a project, ministers are thus presented with evidence on the extent to which the proposal:

  • is supported by a robust case for change that fits with wider public policy objectives (the ‘strategic case’)
  • demonstrates value for money – the ‘economic case’
  • is commercially viable – the ‘commercial case’
  • is financially affordable – the ‘financial case’
  • is achievable – the ‘management case’

Consideration is given to all five of these cases before reaching a final decision on whether to approve a project.

How VfM is assessed in DfT

Consistent with best practice across government, the following steps are taken in order to assess the VfM of a proposed investment in DfT:

  1. considering a wide-range of possible solutions to an investment requirement, before recommending a specific proposal to ensure that the preferred option offers the best VfM and achieves its wider objectives.
  2. development of the ‘without-scheme’ option against which the proposal (the ‘with-scheme’ option) is compared. This without-scheme case forecasts a state of the world in which the proposed investment does not take place. It does however include any hitherto committed proposals. This is so that the difference between the with- and without-scheme options measures the impacts of the proposed investment, and thus ensures that it is adding value.
  3. measurement of costs and impacts of the scheme. The department’s appraisal guidance (TAG)[footnote 4] provides a comprehensive and consistent approach for this, using the best available evidence and methodologies. It encourages consideration of a wide range of economic, environmental, and social impacts.

At this point a ‘VfM category’ can be assigned, taking all of the above into consideration. It is this VfM category that is presented to ministers when making investment decisions.

The VfM category is derived in the first instance from estimates of a scheme’s benefit cost ratio (BCR). For costs and impacts that can be monetised, the BCR measures how much benefit can be expected for each unit of cost (investment) for example for every £1 invested benefits:

  1. less than £1 indicate poor VfM
  2. between £1 and £1.50 indicate low VfM
  3. between £1.50 and £2 indicate medium VfM
  4. between £2 and £4 indicate high VfM
  5. greater than £4 indicate very high VfM

There may also be scheme impacts which, either because they cannot be monetised or because their monetary value is considered highly uncertain, do not form part of the BCR. These impacts are subsequently considered to ascertain whether they are likely to be sufficiently large to warrant placing the scheme in a different VfM category[footnote 5].

The VfM assessment also includes consideration of risks and uncertainties. Typically, this involves sensitivity analysis to test the impact of changes in the core assumptions and parameters used to derive the scheme’s BCR (for example different rates of population growth).

This is to provide confidence that the proposed scheme will deliver VfM under a range of scenarios (for example different levels of travel demand). Some scenarios may suggest a different VfM category, in which case a judgement of likelihood is taken to determine whether the scheme’s VfM category should be adjusted accordingly.

The final VfM category is assigned after this step to ensure that all the relevant impacts of a scheme are appropriately reflected in the overall VfM judgement.


As noted, in assessing the VfM of a proposed project, a comprehensive range of impacts are taken into account alongside the net costs to the public sector of the project. These impacts are listed.

The particular nature of a project – in terms of both the mode of transport to which it relates, and the type of investment being made – will determine the relative prevalence of these impacts in the overall VfM assessment.

For instance:

  • the VfM of a proposal to upgrade to a ‘smart’ motorway is largely driven by: time savings from reduced congestion; improved reliability; and fuel cost savings (due to driving at a more efficient speed)
  • the most significant impacts and VfM drivers of a typical walking and cycling scheme will be: improved journey quality; time savings from reduced congestion (for example through switching from car to bicycle travel); environmental (for example greenhouse gases and air quality) and health benefits from increased physical activity
  • a typical rail electrification scheme may entail significant benefits to direct users (for example through crowding relief) but its VfM will also be strongly influenced by its wider environmental benefits and reductions in operating costs

Impacts considered in the VfM assessment


The economic impacts are:

  • transport user benefits
  • wider economic impacts
  • regeneration
  • indirect tax

The social impacts are:

  • accidents
  • physical activity
  • security
  • severance
  • journey quality
  • option and non-use values
  • accessibility
  • personal affordability

The environmental impacts are:

  • noise
  • air quality
  • greenhouse gases
  • landscape
  • townscape
  • biodiversity
  • historic environment
  • water environment


  1. Transport investments where most or all of the cost is funded by DfT, and whose business case was subject to independent review prior to ministerial approval. These projects represent a sample of all DfT investment in 2019. Sample size may vary each year. 

  2. Separate work is undertaken in this area. For more information see the social research and evaluation collection

  3. The public budget available to fund transport schemes. Further information can be found in TAG unit A1-1

  4. This is the department’s ‘transport analysis guidance’, which provides detailed advice on how to conduct modelling and appraisal of transport proposals. 

  5. Further information on VfM categories can be found at DfT Value for money framework