Guidance

Small scheme appraisal toolkit user guide

Updated 11 June 2021

This guidance was withdrawn on 14 June 2022

This page is no longer current and information on Round 2 of the Levelling Up Fund can be found in the prospectus, tech note, application guidance and/or FAQs.

Introduction

The small scheme appraisal toolkit has been created to provide a proportionate method to monetise the impacts of small highway and bus improvement schemes. The toolkit should only be used for schemes where there is likely to be limited routing or variable demand impacts. Where there are expected to be sizeable routing or demand impacts it is recommended that an appropriate model together with TUBA are used to assess the scheme impacts in line with the guidance in TAG.

The toolkit can provide, for a scheme based on the forecast impacts in the scheme opening year, an estimate of the:

1. Present value of benefits (PVB).
2. Present value of costs (PVC)
3. Benefit cost ratio (BCR).

The impacts of the scheme, in terms of changes to journey times and journey distances, and level of user demand will need to be estimated outside the toolkit using observed and modelled demand information and outputs from assessment models or bespoke calculations. These can then be entered into the toolkit where they will be monetised and converted to appraisal period benefits.

Depending on the scheme type and the inputs provided, the toolkit will produce a monetised assessment of the impacts of:

• highway journey time
• highway vehicle operating cost
• bus journey time
• bus journey quality
• noise
• accidents
• air quality
• greenhouse gases
• indirect tax

Scheme costs can be included in the toolkit, and the PVC will be calculated for the scheme and used in a BCR calculation.

What schemes can the toolkit be used for?

The toolkit can be used to support the assessment of:

• small highway schemes, where the scheme impact has been assessed using operational assessment tools (such as Junctions 9, LinSig and so on) or models with limited spatial coverage
• small bus infrastructure schemes: where a simple assessment has been made of the impact on bus journey times (noting the toolkit captures the resultant impact on highway users at a high level).
• schemes to improve the environment for bus travellers (for example new bus shelters, CCTV and so on)

Schemes with multiple elements

Where the scheme is made up of multiple discrete elements which have been assessed separately, then multiple versions of the toolkit will need to be run (noting there will need to be aggregation of benefits and by costs across scheme elements in order to obtain the total BCR). However if multiple scheme impacts are assessed in a single model these can be assessed in a single version of the toolkit.

Inputs

The toolkit can be used to monetise the impacts of a scheme, however the impact of the scheme on demand, journey times and travel distance will need to be estimated outside of the toolkit then input on the proforma sheets of the toolkit. The inputs to the toolkit can be based on modelled outputs, including operational assessment models and simple spreadsheet models, or observed data.

To estimate scheme benefits, the toolkit requires inputs for both the “Do-Minimum (DM)” and “Do-Something (DS)” scenarios of demand, plus depending on the scheme type, inputs may also include:

• total travel time or by total delay
• total travel distance
• changes to bus infrastructure

All inputs are required for the scheme opening year, or a proxy year that is as close to the scheme opening year as possible, preferably within 3 years, or if unavailable adjusted to reflect the opening year.

All inputs to the sheets “I- Impacts Proforma” and “I- Cost Proforma” should be provided where possible, noting that for some schemes or modelling platforms it will not be possible to obtain all inputs. Within the proforma users should complete, where possible, all yellow cells and select from the dropdown in the green cells. User instructions and notes are supplied in green text within the proformas.

The tables detail the proforma inputs plus some guidance notes.

Proforma inputs

I- Impacts proforma input	I- Impacts notes
Scheme details	Scheme details should be input including scheme name, scheme promoter and scheme type (highway, bus, both)
Scheme opening year	The scheme opening year must be provided. It should be noted that Levelling Up Fund (LUF) funds must be spent by 31 March 2024
Model base year	If a model has been used to inform the inputs to I- Impacts Proforma, then the base year should be stated.
Modelled year used	If a model has been used to inform the inputs to I- Impacts Proforma, then the modelled year used should be stated.
Area type	The area type should be selected (London, inner and outer conurbations, other urban, rural). This can be found by looking up the scheme area on the sheet “I- Area Lookup”, and should then be entered on “I- Impacts Proforma”.
Time period	The time periods for which inputs are provided should be specified (for most applications these are expected to be hour long periods – alternative period lengths can be defined but this should be reflected in the ‘Peak period adjustment factor’). Night, Saturday and Sunday inputs can be provided, however these should be left blank where there is not the information available.
Peak period expansion factor	This should reflect the factor that the peak hour demand (for most applications) should be multiplied by to give the whole peak period demand. For example, if the AM peak hour is 0700 - 0800 and this represents an average hour in the peak period (say 0700 - 1000), then the factor would be 3. If demand inputs cover a longer time period, for example the whole of the AM peak, this should be specified in the ‘Time period’ row above, and the factor in this example would be 1.
DM and DS highway demand	This input should reflect the number of highway trips undertaken in the area of influence of the scheme in the specified time period (normally an hour) in the opening year, in the DM/DS scenarios.
DM and DS travel time or delay selection	Select whether the input is the total travel time or total delay in the DM/DS scenarios.
DM and DS highway travel time or delay time	This input should reflect the total travel time or delay across all vehicles in the area of influence of the scheme in the specified time period (normally an hour) in the opening year, in the DM and DS scenarios.
DM and DS highway distance	This input should reflect the total highway kilometres travelled in the area of influence of the scheme in the specified time period (normally an hour) in the opening year, in the DM/DS scenarios.
DM and DS bus demand	This input should reflect the number of bus trips undertaken in the area of influence of the scheme in the specified time period (normally an hour) in the opening year, in the DM/DS scenarios.
DM and DS bus travel time	This input should reflect the total travel time in the area of influence of the scheme in the specified time period (normally an hour) in the opening year, in the DM/DS scenarios.
Bus quality factors	The listed quality measures that will be introduced as a result of the scheme should be selected. For those quality measures being introduced, the estimated DM and DS daily passengers experiencing the benefit in the opening year should be input.
Bus quality benefits appraisal period	The appraisal period for the bus quality benefits should be input in line with TAG unit A1-1 cost benefit analysis, the appraisal period should reflect the lifetime of the infrastructure.

I- Cost proforma inputs	I- Cost proforma notes
Funding sought from the Levelling Up Fund	The funding ask sought in each year should be input. The LUF ask for small schemes should not exceed £20 million. All costs entered into I- Cost Proforma should be inclusive of inflation and any risk adjustments. Costs should not include optimism bias. All costs should be entered into I- Cost Proforma as positive numbers.
Costs to other funding sources	The cost to other funding sources in each year should be input. Whether the costs are incurred by the public or private sector must be selected in “column E”. All costs entered into I- Cost Proforma should be inclusive of inflation and any risk adjustments. Costs should not include optimism bias. All costs should be entered into I- Cost Proforma as positive numbers.
Optimism bias	The appropriate level of optimism bias to be applied to scheme costs should be input. The appropriate optimism bias should be considered in line with TAG unit A1.2.

There are a number of other assumptions used within the toolkit which cannot be changed by scheme promoters.

These assumptions are added in the table.

Toolkit inputs and assumptions

Toolkit inputs and assumptions input	Toolkit inputs and assumptions value and source
Appraisal period	Highway schemes: 60-years Bus schemes: 60-years Bus quality infrastructure: user input on “I- Impacts Proforma”
Appraisal base year	2010
Annualisation	AM Peak Period, PM Peak Period, Inter-Peak Period: 253 Night: 365
Weekend days: 52
Average length of bus trip	5.2 miles (National travel survey)
VOC rates dependent on speed	Highways England Scheme appraisal report (SAR) (2020)
Discount factors	3.5% Years 0 to 30 3.0% Years 31 to 75 TAG data book A1.1.1 (July 2020 v1.14 sensitivity)
Indirect tax adjustment factor	1.19 TAG data book A1.3.1 (July 2020 v1.14 sensitivity)
Bus quality factors in generalised minutes	TAG data book M3.2.1 (July 2020 v1.14 sensitivity)
Journey purpose split by vehicle type	TAG data book A1.3.1 (July 2020 v1.14 sensitivity) Proportion of person trips (all week average) for PSV Proportion of distance travelled by vehicles (all week average) for car, LGV or HGV
Vehicle type split	DfT road traffic statistics (vehicle miles by vehicle type in Great Britain, 2019)
Car diversion factor	24% TAG data book A5.4.6 (July 2020 v1.14 sensitivity)
Vehicle occupancies	TAG data book A1.3.3 (July 2020 v1.14 sensitivity) Occupancy per vehicle kilometre travelled
Gross Domestic Product deflator	TAG data book annual parameters (July 2020 v1.14 sensitivity)
Values of time	TAG data book A1.3.2 (July 2020 v1.14 sensitivity)
Marginal external cost rates	TAG data book A5.4.2 (July 2020 v1.14 sensitivity) Values for A-roads used for all area types Average congestion band used HGV rates calculated as 50% rigids and 50% artics
Capitalisation factors	Highways England scheme appraisal report (SAR) (2020)

Appraisal methodology

The table shows the methodology employed within the toolkit to monetise the various impacts listed previously.

The toolkit only calculates benefits for those time periods covered by inputs to the “I- Impacts Proforma”.

Appraisal methodology input	Appraisal methodology value and source
Highway journey times	The difference in travel time per user is calculated using the opening year demand and time inputs on “I- Impacts Proforma” . The annual journey time impacts are calculated using the rule of a half to account for new users. These impacts are monetised using the opening year values of time weighted by vehicle type and journey purpose. Opening year impacts are expanded to the full appraisal period using a capitalisation factor.
Highway VOCs	The distance travelled per user is calculated using the opening year demand and distance inputs on “I- Impacts Proforma”. The average travel speed by time period is calculated using the opening year distance and time inputs on I- Impacts Proforma, this drives the VOC rate (in pence per km). The annual VOC impacts are calculated using the change in distance and VOC rate and using the rule of a half to account for new users. Opening year impacts are expanded to the full appraisal period using a capitalisation factor.
Bus journey times	The difference in travel time per user is calculated using the opening year demand and time inputs on “I- Impacts Proforma”. The annual journey time benefits are calculated using the rule of a half to account for new users. These benefits are monetised using the opening year values of time weighted by journey purpose Opening year benefits are expanded to the full appraisal period using a capitalisation factor.
Bus quality	For those bus quality measures selected on “I- Impacts Proforma”, the value in generalised minutes is multiplied by the opening year value of time for bus users weighted by journey purpose to give the monetised benefit. Using the DM and DS opening year daily demand from I- Impacts Proforma, and the rule of a half, the annual benefit to users is calculated. Opening year benefits are expanded to the full appraisal period using a capitalisation factor.
Highway schemes: impacts of change in highway kilometres travelled: - infrastructure - noise - air quality - accidents - greenhouse gases - indirect tax	The impacts of changes in highway usage (outside of journey time and VOCs covered above) are calculated using the marginal external costs (MECs) approach. The change in distance travelled between DM and DS in the opening year is calculated using the inputs on “I- Impacts Proforma”. This is combined with the MECs rates for infrastructure, noise, air quality, accidents, greenhouse gases and indirect tax to provide a monetary assessment. Opening year benefits are expanded to the full appraisal period using a capitalisation factor.
Bus schemes: impacts of change in highway kilometres travelled: - congestion - infrastructure - noise - air quality - accidents - greenhouse gases - indirect tax	The impact of changes in bus usage on remaining highway users is captured within the Toolkit using the MECs approach. The impact on congestion is also included (where it wasn’t for highway scheme MECs), as these impacts are not captured elsewhere in the appraisal. The change in bus person trips between the DM and DS in the opening year is calculated using the inputs on “I- Impacts Proforma.” This is converted to a change in the number of highway trips using a diversion factor and an average vehicle occupancy. Using the average length of a bus trip, the change in vehicle km in the opening year is calculated. This is combined with the MECs rates for congestion, infrastructure, noise, air quality, accidents, greenhouse gases and indirect tax to provide a monetary assessment. Opening year benefits are expanded to the full appraisal period using a capitalisation factor.
Scheme costs	Within the toolkit, the costs are converted to 2010 present values. The costs input on “I- Cost Proforma” are adjusted for optimism bias, which is input on the same tab. The costs are then deflated to 2010 prices, discounted to 2010 values and adjusted to market prices.

Outputs

The toolkit has an output summary sheet “O- Summary” which presents each of the impacts and costs in 2010 present values. These outputs then feed through into the 3 standard appraisal output tables of the:

• transport economic efficiency (TEE) table
• public accounts (PA) table
• analysis of monetised costs and benefits (AMCB) table