Research and analysis

Transforming Cities Fund: the co-development process – national evaluation case study 1: government response

Published 26 September 2024

The Department for Transport (DfT) commissioned a study to learn lessons from the use of a co-development process. The co-development process involved greater collaboration between DfT and local areas during competitive bidding for the Transforming Cities Fund (TCF).

DfT is grateful to its contractors (Transport for Quality of Life, with Sustrans and University of the West of England) for their work. We welcome the findings of their report.

As an initial trial of a new approach to bidding, both the strengths and limitations identified represent valuable knowledge. Where possible, the lessons learned will be used to inform future policy.

DfT welcomes the conclusion that the co-development process was a successful pilot, presenting a viable approach for future funds. The main strengths of co-development are:

• aligning government strategic objectives with local solutions
• developing larger, longer-term, multi-modal programmes
• maintaining an ongoing dialogue and building relationships between DfT and local areas

DfT will consider these strengths when developing similar schemes where appropriate. This includes the design of the City Region Sustainable Transport Settlements (CRSTS) available to some mayoral combined authorities between 2022 to 2023 and 2026 to 2027.

DfT also acknowledges the limitations identified in this report and aims to learn from them. Some of the main learning points are:

• ‘supported bidding’ may be a more accurate term than ‘co-development’
• challenges around timescales, costs and resource requirements of supported bidding should be considered if such an approach is used in the future
• a ‘funding envelope’ should be indicated to set and manage expectations – this approach has already been implemented in the CRSTS bidding process
• local authorities should be further supported in bidding for and using funding – DfT has provided capacity funding to support the development of CRSTS prospectuses and will offer free training to local authorities on implementing Local transport note 1/20

DfT recognises the challenges that scheme promoters may have in developing business cases for schemes that are developed in support of wider government objectives.

HM Treasury’s findings of the Green Book Review reiterated that, while benefit-cost ratios are an important appraisal metric, they need to be considered alongside the wider value for money assessment and the other 4 dimensions of the business case, including the strategic case.

To embed the Green Book Review’s recommendations, DfT will be reviewing and updating Transport analysis guidance (TAG). We will also review the existing value for money framework to ensure it provides guidance on the assessment and presentation of value for money in line with the updated Green Book.

While maintaining TAG principles, DfT will work with local authorities to develop innovative ways of assessing the impact of:

• sustainable transport
• transformational schemes

We have already put some of the report’s recommendations into practice, including proactive stakeholder engagement, management of change and knowledge sharing. DfT has also established a TCF community of practice, providing local areas with the opportunity to meet regularly, exchange best practice and learn from one another.

To maximise the benefits of the TCF co-development pilot, DfT will circulate the findings of this report more widely among its policy and delivery teams. We will learn lessons from our evaluations and look forward to publishing further TCF case study reports in due course.