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Proportionality


Before setting out the proposed way forward in more detail it is important to understand that the costs of appraisal should not over burden scheme design and preparation. This principle is clear in DfT guidance, for example:


“The amount of effort devoted to the analysis of such schemes should be proportional to the scale of the project.”


No precise guidance is given but, for example, recent major highways schemes of about £50-100million would need, for the forecasting, modelling and appraisal alone, about £1-2million in addition to scheme design and other preparation costs (1-2%).


While this may rise for small schemes as a proportion, it seems reasonable to aim for no more (and hopefully less) than 5% for smaller schemes, of say less than £250,000. The basis of this therefore is that the scheme description and justifi cation should contain the data needed for the appraisal, and that a simple but effective means of calculating a conventional BCR (almost certainly spreadsheet based) is the way forward.


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