Tees Valley Local Major Transport Schemes Assurance Framework

Tees Valley Local Major Transport Schemes - Assurance Framework – March 2014 Tees Valley Local Major Transport Schemes Assurance Framework 1. Purpos...
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Tees Valley Local Major Transport Schemes - Assurance Framework – March 2014

Tees Valley Local Major Transport Schemes Assurance Framework 1.

Purpose, Structure and Operating Principles Name

1.1.

The Local Transport Body (LTB) will simply be known as Tees Valley Unlimited (TVU).

1.2.

TVU is an unincorporated partnership of Local Authorities, business and other sectors acting in concert to support the economic development of the Tees Valley by facilitating the realisation of the Statement of Ambition and its supporting Investment Plan, which on 28 October 2010 was confirmed by the Secretary of State for Communities and Local Government as a Local Enterprise Partnership. Tees Valley Unlimited is driven by a private sector-led Leadership Board which builds on more than a decade of successful partnership work to lead and coordinate the development of the Tees Valley economy.

1.3.

The LTB will use the existing governance arrangements as set out within the March 2011 Joint Agreement (for the Governance of Tees Valley Unlimited), made between Darlington Borough Council, Hartlepool Borough Council, Middlesbrough Council, Redcar & Cleveland Borough Council and Stockton-on-Tees Borough Council. The LTB will be managed by the TVU Leadership Board as outlined below.

Geography 1.4.

The LTB will cover the Tees Valley, which is made up of the local authority areas of Darlington, Hartlepool, Middlesbrough, Redcar & Cleveland and Stockton-on-Tees.

1.5.

It is anticipated that the Tees Valley Local Major Scheme funding allocation will be predominantly spent on schemes within the Tees Valley. However, TVU will collaborate with neighbouring LTBs as and when required (e.g. rail devolution), and this may lead to the pooling of funding in the future.

Membership 1.6.

Membership of the LTB will mirror that of the TVU Leadership Board, which includes elected representatives from each of the five Tees Valley Local Authorities and key representatives from the private sector. Membership will change when the Leadership Board membership changes however it will always include the five local authority leaders or mayors. The structure of the LTB and the roles of each of the levels can be summarised as follows:

TVU Leadership Board (The LTB) Responsibility: Driving Forward Economic Growth

Transport & Infrastructure Group (TIG) Responsibility: TVU Infrastructure Plan and the Area Action Plan

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Transport Scrutiny Panel Responsibility: Annual review of LTB

Tees Valley Local Major Transport Schemes - Assurance Framework – March 2014

1.7.

The TVU Leadership Board meets on a quarterly basis to discuss a wide range of TVU business. The board includes the Leaders and Mayors from each of the five Tees Valley local authorities and key representatives of the local business, education and voluntary community as set out within the Joint Agreement. The current membership (as of 28th February 2013) is listed below. Member Sandy Anderson OBE

Organisation Chair – Teesside University

LTB Vote -

Chairman, Tees Valley Unlimited

1.8.

1.9.

Ray Mallon

Mayor – Middlesbrough Council

Yes

Cllr Christopher AkersBelcher

Leader – Hartlepool Borough Council

Alastair MacColl

Chief Executive – Business & Enterprise Group

Cllr Bill Dixon

Leader – Darlington Borough Council

David Robinson

Group Chief Executive – PD Ports

-

Alison Thain

Chief Executive – Fabrick Housing Group

-

Cllr Bob Cook

Leader – Stockton on Tees Borough Council

Yes

Cllr George Dunning

Leader – Redcar & Cleveland Borough Council

Yes

David Soley

Director – Cameron’s Brewery

-

Ian Kinnery

Director – Team Massive Results

-

Paul Booth

President – SABIC UK

-

Prof Graham Henderson

Vice Chancellor – Teesside University

-

Nigel Perry

Chief Executive – Centre for Process Innovation

Yes Yes

The board will discuss LTB business as an on-going item within their wider agenda. Within this they will be responsible for: 

Agreeing a shortlist of schemes, which meet the criteria of the Tees Valley Local Transport Major Scheme fund; and



Agreeing which schemes will be delivered once the shortlist has been prioritised and business cases have been submitted and approved.

Voting on all aspects of the transport funding allocation will be reserved for the 5 elected Local Authority Leaders and Mayors. However, the private sector members of the Leadership Board will be given ample opportunity to influence the direction of the LTB and will be, and have already been, fully involved in setting priorities, identifying funding opportunities and developing schemes to be put through the prioritisation process.

1.10. A Terms of Reference will be established for the LTB prior to its first official meeting.

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1.11. The Tees Valley Transport Scrutiny Panel will meet on an annual basis and will mirror similar arrangements currently in place for sectors such as health and social care. The panel includes the transport portfolio holders from each of the five Tees Valley local authorities and will be responsible for: 

Scrutinising the decisions made and the processes followed by the LTB.

1.12. The Transport and Infrastructure Group (TIG) meets on a monthly basis. The group is chaired by a nominated representative from the Leadership Board (currently the CEO of Teesport) and includes the senior officers who oversee transport at the five local authorities, Tees Valley Unlimited, the Highways Agency and Network Rail. The group will act as a steering group for the LTB and will be responsible for: 

The scheme shortlisting process and recommending a final shortlist of schemes to the Leadership Board;



The prioritisation process and recommending the schemes for which a full business case should be developed;



The development of Business Cases for the prioritised schemes; and



The delivery and monitoring of schemes.

Support and Administration Arrangements 1.13. TIG, as part of the core TVU organisational structure, will be the main source of professional advice for the LTB. The group will provide the Leadership Board with the information and evidence they require to make funding decisions. 1.14. The LTB will also receive professional advice and administrative support from TVU staff, as with the existing TVU Leadership Board. TVU currently have three members of staff within its Strategic Transport Team who will be devoting much of their time to the local major scheme process over the next 2 years. This includes the development and application of the Tees Valley’s Local Major Scheme methodology and the continued maintenance and development of the Tees Valley Strategic Transport Model. The model will be vital for the identification, shortlisting and prioritisation of schemes, and will be integral to the development of WebTAG compliant scheme business cases. 1.15. Consultancy support will also be utilised where the specific expertise or impartiality cannot be found within TVU. 1.16. The details of the tasks required to manage the Tees Valley Local Major Scheme Fund are presented elsewhere. The resources allocated to these tasks can be summarised as follows: 

Scheme identification –Local Authorities with support from TVU staff;



Sifting and prioritisation – TVU staff will produce the methodology and modelling outputs required within the process with support from the Local Authorities;



Tees Valley Strategic Transport Model maintenance and improvements – TVU staff with targeted specialist consultancy support;

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Independent scrutiny of the Tees Valley Strategic Transport Model to ensure its compliance with WebTAG – External Consultant(s);



Business Case development – Local Authorities with the support of TVU staff and consultancies where appropriate; and



Independent appraisal of business cases – External Consultant(s).

Gifts and Hospitality 1.17. The LTB will follow existing TVU gifts and hospitality procedures where any gift or hospitality over the value of £25 will be declared and documented.

Conflicts of Interest 1.18. The LTB will follow existing TVU conflicts of interest procedures: (i)

A standing item, regarding conflicts of interest, is included on each agenda at the start of TVU meetings. All members should declare the existence and nature of any interests at this point. Details of the declaration are recorded in the Board’s minutes. If members arrive part way through a meeting they should declare any interest at the start of the relevant item or as soon as it becomes apparent that they have an interest;

(ii)

TVU will maintain a publically available register of such declared interests, detailing the nature and extent of such an interest;

(iii)

Where a conflict of interest occurs, the Board member should withdraw from the meeting room whilst the relevant business is being considered / determined and, must not vote or otherwise improperly influence decisions on that business;

(iv)

In respect of collective decisions, such as partnership quarterly grant claims or the approval of annual delivery plans, partnership members should consider the issues in respect of the other elements of the schemes and not their own projects or interests. In practice, this means that within the context of an overall scheme decision, members should vet each other’s claim or submission.

1.19. All TVU Board Members are required to complete a TVU Member Notification of Personal Interest Form when joining the board, which is then repeated on an annual basis. This ensures that Board Members adhere to a Model Code of Conduct, issued under section 50 of the Local Government Act 2000. Elected TVU Board Members will also have signed an undertaking to adhere to a Model Code of Conduct, which has been adopted by their authority.

Status and Role of Accountable Body 1.20. Stockton-on-Tees Borough Council (SBC) will act as the accountable body for the LTB, assuming legal responsibility for LTB decisions. SBC will also hold the devolved major scheme funding and make payments to the scheme delivery bodies. This is an established process in the Tees Valley and is subject to the Joint Agreement. The arrangement has been used successfully to deliver joint major transport schemes in the past, such as elements of the Tees Valley Metro Scheme.

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1.21. The Local Devolved Major Scheme Funding will be allocated to its own unique cost centre within SBC’s financial system. Financial statements will be available upon request and will be presented at LTB meetings on a periodic basis. As funding will only be released as actuals in arrears, proof will be required that expenditure claimed is in accordance with an LTB decision. This will be overseen by SBC’s Finance (s151) Officer and pass through the TVU audit process. 1.22. Decisions and activities of the LTB will be monitored by TVU and SBC’s finance and legal teams. The Leadership Board will collectively be responsible for approving schemes and through SBC, any legal challenge that may arise. The transport scheme decisions will be based upon the objectives of the Tees Valley Statement of Transport Ambition, which have undergone a Strategic Environmental Assessment. Individual schemes will be required to have considered the relevant equality, environmental and EU requirements within their business plans and adhere to them if they reach the delivery stage. An Equality Framework has been established that covers the work and outputs of all of the TVU boards, panels and groups, which is updated on an annual basis. 1.23. Measures will be in place to ensure the DfT approved assurance framework is being adhered to. Much of the framework is based upon existing TVU arrangements, which have been agreed through committees at each of the five Tees Valley Local Authorities. The governance arrangements through the Leadership Board are already in place and active for a number of purposes, including transport. This will continue to be the case and the Scrutiny Panel will annually review the overall process to ensure it is still adhering to the governance, prioritisation and programme management arrangements set out within the framework. 1.24. TVU staff compile papers, agendas and minutes for each leadership board and TIG meeting. This will continue to occur and they will be made public through the TVU website.

Local Audit and Scrutiny 1.25. The functions of the LTB and the SBC cost centre assigned to the Local Major Scheme funding, will be independently audited on an annual basis as part of the external audit of SBC’s accounts. The reports will be made available to the DfT on an annual basis, the first of which will be available by the end of 2014. 1.26. The Scrutiny Panel will annually review the overall process to ensure that the LTB is still operating effectively within the terms of the Assurance Framework and adhering to the governance, prioritisation and programme management arrangements. Reports and minutes from this panel will be made available to the DfT on an annual basis.

Strategic Objectives and Purpose 1.27. The 2011 Tees Valley Statement of Transport Ambition sets out how key local authority, business and other public sector leaders in the Tees Valley prioritised three transport challenges, based on the national transport challenges in place prior to May 2010. The three challenges remain consistent with the Coalition Government’s primary goals for transport. 1.28. These commonly agreed challenges are: 

Improve the journey experience of transport users of urban, regional and local networks, including interfaces with national & international networks;

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Improve the connectivity and access to labour markets of key business centres; and



Deliver quantified reductions in greenhouse gas emissions within cities and regional networks, taking account of cross-network policy measures.

1.29. The evidence supporting these three challenges has been examined in detail within an earlier 2010 study programme and has identified a number of detailed issues, which in turn have influenced the identification of options to tackle the transport challenges within the Tees Valley. 1.30. The Coalition Government has also signalled that it wishes to see strong leadership and autonomy within local communities, led by local government, business and other key stakeholders. In transport, many issues that can be tackled at the local level emerge, and indeed the Coalition Government has identified that social justice and quality of life are important outcomes that improved transport can deliver. These local challenges include road safety, local network management, highway maintenance (including management of local infrastructure assets), and the delivery of local infrastructure that supports active travel such as walking and cycling. Tackling each of these challenges through local action will contribute to delivering outcomes that are important within each locality, and will help to enhance health and quality of life in local communities across the Tees Valley. 1.31. As the LTB is also the TVU Leadership Board, its strategic objectives and purpose will also match those already established within the Tees Valley. Decisions on scheme selection will be expected to contribute towards economic growth, an increase in employment opportunities and the main ambitions of the Tees Valley Statement of Economic and Regeneration Ambition: 

Driving the transition to a high value, low carbon economy; and



Creating a more diversified and inclusive economy.

1.32. The nature of the existing Leadership Board’s business will also mean that the LTB is involved in making decisions for other funding streams managed by TVU (such as Growing Places Funding and the Tees Valley Investment Fund, which has been established to utilise the income from the Tees Valley Enterprise Zone sites) and it will be a discussion forum for any strategic transport issues, even those not covered by local major scheme funding. Therefore this presents opportunities to consider TVU investment in transport schemes aligned with Local Major Transport Funding. 1.33. The LTB will be responsible for: 

Identifying a prioritised list of interventions;



Approving individual schemes, investment decisions and funding release;



Overseeing the scrutiny of individual scheme business cases;



Monitoring the progress of scheme delivery and managing programme changes;



Ensuring value for money is achieved; and



Local economic growth.

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Transparency and Local Engagement 1.34. Transparency will be maintained through existing TVU arrangements as set out in the Joint Agreement and by adhering to the Local Government Transparency Code. The Leadership Board will agree a diary of meetings during the year as soon as practicable after the Annual Meetings of the Local Authorities. There will be a minimum of a 5 day notice period with agenda and papers before any LTB meeting. LTB papers and minutes will be made available to LTB members within 7 days of the LTB meeting. They will also be made available to the public through the TVU website alongside scheme business cases, evaluation reports, funding decision letters and regular programme updates. 1.35. Individual scheme promoters will obtain agreement from the appropriate Local Authority Committee/Cabinet meeting, upon which schemes to put forward as Business Cases, from the prioritised list of schemes. The prioritised list of schemes and approved business cases will also be taken through the appropriate Local Authority Committee/Cabinet meetings before being signed off by the LTB. These meetings will ensure that the initial decision on the composition of the scheme programme and the individual scheme investment decisions are approved in a meeting open to the public, which has a minimum notification period. The leaders and mayors can then bring the delegated decision from these meetings to the Leadership Board/Local Transport Board, which is not open to the public, for final sign off. 1.36. The Tees Valley and Local Authority transport strategies and priorities upon which the major scheme funding shortlist will be based, will continue to go through the Local Authority consultation processes. 1.37. TVU, formerly listed as a public body, will be responsible for holding the official record of LTB proceedings and all LTB documents. Any information held by TVU will be supplied under the Freedom of Information Act 2000, unless subject to one of the 23 exceptions under the Act. Full details of TVU’s Freedom of Information requests procedures can be found on the TVU website.

Complaints and Whistleblowing 1.38. TVU has a dedicated complaints procedure which is followed upon receipt of a complaint. The details of which are published on the TVU website. In summary a complaint must be sent to TVU’s Office Manager in writing (fax and email also accepted). All complaints will be investigated and fully responded to within 10 working days of receipt. If the sender of the complaint is unhappy with the response or action taken a further response will be within 20 working days. If the sender is still unhappy the matter can be put to the Local Government Ombudsman.

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2.

Prioritisation

2.1.

Sifting and prioritisation will be undertaken using information derived from the Tees Valley Area Action Plan (AAP) and a Pro-forma based upon the DfT’s EAST methodology (Appendix 1). To ensure transparency, justification for scheme prioritisation, outlining how the following criteria have been applied, will be published alongside a draft list of prioritised schemes by the end of April 2013 and presented to the LTB. A final list of prioritised schemes will be published at the end of July 2013 and submitted to the DfT.

Scheme Identification 2.2.

Congestion hotspots are identified through the AAP and schemes are designed and tested by TVU within the Strategic Transport Model to find the most appropriate solution. The tests consider the role of non-highway schemes such as the Tees Valley Metro (local rail enhancements) and Bus Network Improvement Scheme as well as highway improvements. Testing schemes using the one model enables a consistent comparison of scheme benefits for schemes promoted across the Tees Valley. Tees Valley Area Action Plan The Tees Valley AAP is a collaboration between the Highways Agency, Tees Valley Unlimited, and the five Tees Valley local authorities. This partnership has been in place for around 5 years and is a constantly evolving transport planning response to the changing development aspirations of the Tees Valley. The AAP is strongly evidenced based, using outputs from sophisticated transport modelling and development assessment techniques to inform scheme identification and prioritisation. The AAP has been recently used successfully to prioritise the HCA’s Growth Point and the HA’s Pinch Point schemes within the Tees Valley. Growth Point led to the delivery of Ramp Metering schemes to provide additional capacity a 5 key junctions on A19 and A66 in the Tees Valley. Pinch Point will deliver further capacity enhancement at the A19/A174 and A19/A689 junctions, which are critical in unlocking development sites across the Tees Valley. In order to facilitate the economic growth that is being sought by TVU, it is vital that the strategic transport network is able to accommodate the traffic pressures that come with it. This will be achieved through the maintenance, adaptation and expansion of the existing network allied to measures to encourage the use of buses, trains, walking and cycling. This is summarised within the aim of the AAP as stated below: “Taking all of the predicted and aspirational future economic growth into consideration – develop a series of transport interventions and prioritise them by growth delivered, value for money, affordability, and timescale.” Within the AAP a development database has been created, which outlines all of the major developments expected to occur within the Tees Valley over the next twenty years and provides a common set of development assumptions for all modelling then undertaken. This has then been constrained to TEMPro growth forecasts and run through the Tees Valley Strategic Transport Model, the Highways Agency’s Traffic Impact Assessment Toolkit and the Highways Agency’s Meso-scopic Transport Model which covers the Tees Valley trunk road

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network. The outputs from the modelling provide an indication of where congestion is likely to occur on the road network in the future if development goes ahead as planned. The AAP as a tool is concerned primarily with the facilitation of economic growth and maintaining the stability of the strategic road network. To this end congestion measures have been used as a proxy for the quantity of growth and future development the existing Tees Valley transport networks can accommodate. The wider social and environmental impacts of scheme development will be considered when the AAP is applied within context, such as Local Transport Plans and Local Major Scheme prioritisation. 2.3.

Initially schemes will be added to a long-list for further consideration. The long-list will also include schemes derived from local requirements or previous studies. Due to the sifting process explained subsequently, there are no set criteria for what can be added to the longlist.

Scheme Sifting 2.4.

Using methodologies and modelling tools from the Tees Valley’s Area Action Plan, the following criteria will be applied to the long-list of transport schemes. These will be applied consistently across the long list of schemes using information supplied through a common scheme pro forma. The modelling input will also be applied consistently across all schemes by TVU, utilising a multimodal strategic model which will be tested for WebTAG compliance by an independent specialist.

2.5.

Exclusion by these criteria will not exclude a scheme from the Area Action Plan but a scheme may need to look to other funding sources or be revised / packaged to meet the Local Majors criteria in future revisions. Value for Money A Benefit Cost Ratio (BCR) greater than 1.5 for schemes below £10m (or greater than 2 for schemes above £10m).

2.6.

The BCR is a standard output from transport modelling that has traditionally been used to apply for Major Scheme funding. It offers a simple comparison between transport schemes based upon the cost of the scheme and the monetised benefits of the scheme (including time savings, accident savings, emission savings, etc).

2.7.

The HM Treasury Green Book outlines the following categories of value for money based upon the BCR of schemes:

2.8.



Poor – less than 1;



Low – 1 to 1.5;



Medium – 1.5 to 2;



High – 2 to 4;



Very High – greater than 4.

The Department for Transport followed these categories, generally only considering schemes in the ‘High’ and ‘Very High’ categories. The value used within the sifting process will be 9

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obtained from the Tees Valley’s Strategic Transport Model, which will provide a consistently derived comparable figure. Cost Between £1.5m and £20m. 2.9.

The scheme cost has will be obtained through the industry costing of a scheme (from a Local Authority, the Highways Agency or Network Rail.) or by using a comparable scheme which has already been delivered as an estimate. An optimism bias will be included within the scheme costs where appropriate to ensure that they account for risks and cost changes. Requirement Year Schemes which are required within 5 years of the end of the funding period will be shortlisted.

2.10. Modelling outputs and local authority development predictions will be used to estimate when transport interventions will be required to facilitate specific new jobs / homes. Deliverability Assurances will be required from a scheme promoter / partner (e.g. local authority, Highways Agency or Network Rail) that a scheme can be delivered within the timescales specified. This will include a review of key risks associated with a scheme’s delivery. 2.11. The deliverability of a scheme takes into account a number of factors beyond the issues around securing funding for a scheme. These include aspects such as what stage of design and consultation the scheme is at and whether there are any ownership constraints with the land required for the scheme. This will be developed in partnership with the Local Authorities and the HA.

Scheme Prioritisation 2.12. The Tees Valley transport priorities were established within Connecting the Tees Valley, the Tees Valley Statement of Transport Ambition, published in April 2011. This provided a Tees Valley transport perspective on the 2010 National Infrastructure Plan and a response to the Tees Valley’s Economic and Regeneration Statement of Ambition. The role of transport was summarised within three challenges, which were to:   

Improve the journey experience of transport users of urban, regional and local networks, including interfaces with national & international networks; Improve the connectivity and access to labour markets of key business centres; and Deliver quantified reductions in greenhouse gas emissions within cities and regional networks, taking account of cross-network policy measures.

2.13. These challenges have shaped the development of the Tees Valley Area Action Plan, which has led to the prioritisation of Local Major Schemes by their delivery of GVA (Gross Value Added), homes and carbon benefits. 2.14. The shortlisted schemes have then been indexed by their relative (to other schemes within the shortlist) GVA, homes delivered and carbon benefit per £1m spent. As well as meeting the Tees Valley’s value for money criteria to pass through the sifting process, the benefits per £1m

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spent will also favour higher value for money schemes in the prioritisation process. Weightings of 1, 2 and 3 have been applied to each index respectively to calculate a total score.

GVA 2.15. The GVA of a scheme has been derived from the number of jobs1 that could be facilitated by the extra road capacity generated by a scheme, as predicted by the Tees Valley Strategic Transport Model. The type of job generated is then determined using the Tees Valley Development Database and a GVA is generated from the direct jobs, indirect jobs and construction jobs. 2.16. The final GVA index is then calculated by dividing the GVA by the cost of the scheme and indexing it against the other shortlisted schemes. Homes Delivered 2.17. The number of homes1 delivered is estimated from the extra road capacity generated by a scheme, as predicted by the Tees Valley Strategic Transport Model. The final Homes Delivered index is then calculated by dividing the number of homes delivered by the cost of the scheme and indexing it against the other shortlisted schemes. Carbon Benefit 2.18. The carbon benefits of a scheme have been derived from the Tees Valley Strategic Transport Model, through TUBA analysis. In simple terms, a scheme which increases the average speed on the surrounding road network will improve fuel efficiency and therefore increase the carbon benefit. This is of course up to a certain speed threshold where a higher average speed will start to have a negative effect on fuel efficiency, thus a reduction in the carbon benefit. 2.19. The final Carbon Benefit index is then calculated by dividing the benefit by the cost of the scheme and indexing it against the other shortlisted schemes. Other Criteria 2.20. Local contributions, external funding and any income that could be generated from a scheme will be taken into consideration at a later stage, once scheme business cases have been developed. Noise, air quality, the physical environment, social and distributional impacts will also be considered at this time.

1

Taken from the Tees Valley Development Database

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3.

Programme Management and Investment Decisions The Transport Business Case

3.1.

3.2.

Business Cases will be developed for each shortlisted scheme by the promoting Local Authority, with support from TVU, the Highways Agency or Network Rail as required. These will be WebTAG compliant and based upon forecasts consistent with NTEM. They will be based upon transport business case best practice and will comprise of: 

The strategic case;



The economic case;



The commercial case;



The financial case; and



The management case.

A template is to be developed to ensure that all of the best practice elements are included within each scheme business case and that the elements required for business case scrutiny and prioritisation are clear and transparent. Modelling input will be available for business case development using the strategic transport model (managed by TVU). A decision on what additional modelling may be required will be made on a scheme by scheme basis.

Scheme Assessment and Approval 3.3.

Each individual business case will be assessed and scrutinised by an independent consultant based upon best practice and the priorities - GVA, homes and carbon reduction. The Tees Valley’s Strategic Transport Model will also need to undergo independent scrutiny to ensure it is WebTAG (The DfT’s web based Transport Analysis Guidance) compliant and fit for purpose for the business cases its outputs are to support. A rigorous procurement process will be followed for the commissioning of each of these consultants to ensure the quality of the business case and model approval. A summary report will be made available for the output of each approval and checked by the LTB.

3.4.

Following feedback from an independent consultant, approval recommendations will be put forward by the Transport and Infrastructure Group to the Leadership Board. The Leadership Board will then make a decision on whether to proceed with the scheme / funding recommendations.

3.5.

A two staged approval process will be used similar to the DfT’s where schemes can achieve programme entry but full approval will not being granted until costs have been contracted and legal requirements met.

Value for Money 3.6.

Value for Money (VfM) statements, produced by the scheme promoters in line with DfT guidance, will be included for each scheme put forward as a business case. These statements will require approval from the independent consultant and be reported to the LTB for

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agreement, before being signed off by the Accountable Body’s (SBC) Head of Finance and Assets. 3.7.

Stockton on Tees Borough Council have acted as the Accountable Body for Tees Valley Unlimited on many multi-million pounds projects including LSTF, Single Programme, RGF, Growing Places, etc. The Accountable Body’s Head of Finance will sign off the Tees Valley Local Major Transport Scheme’s Value for Money (VfM) statements only if the full scheme assessment and approval process, including the VfM statements have been properly completed and approved by the independent consultants and the LTB. Evidence of the full approval process must accompany all requests for sign-off of the VfM statements before the Head of Finance, acting independently as the Accountable Body for Tees Valley Unlimited, will sign off the statements on the basis that all necessary approvals have been obtained.

3.8.

The VfM statement will be reviewed, updated and reported alongside the economic case for each individual scheme at each approval stage. The content of the statement will include:

3.9.



The VfM category of the scheme, and any justification if it is not high;



A summary of the present value of benefits, present value of costs and the BCR;



An assessment of non-monetised impacts; and



Identification of key risks, sensitivities and uncertainties.

As outlined in paragraph 2.6, each scheme costing less than £10m will be required to have a BCR above 1.5 and any scheme greater than or equal to £10m will require a BCR above 2. For schemes costing less than £10m, the BCR threshold has been set below DfT’s ‘high’ BCR criteria (which is above 2) to account for the focus on GVA, delivery of homes and carbon reduction within the prioritisation methodology. The ability to deliver GVA/jobs is fundamental in assessing the value for money of a scheme within the Tees Valley in order to assess a scheme’s contribution to delivering the Tees Valley’s target of creating 25,000 jobs by 2025. Again, the calculation of the indices for GVA, homes and carbon (as described in paragraphs 2.15 to 2.19) will be scrutinised as part of the independent model sign off and within the overall independent assessment of each scheme.

External views on business cases 3.10. Business Cases will be published on the TVU website, alongside meeting papers, minutes, etc and any external views will be made available to the LTB. A sufficient period will be available between when business cases are first published and when a final decision is made by the LTB upon which schemes to fund.

Release of Funding, cost control and approval conditions 3.11. A mechanism for managing funding has already been established in the Tees Valley for the Tees Valley Bus Network Improvements Major Scheme as detailed within the TVBNI Project Execution Plan (supplied on request). This has proved successful for the management up to £60m worth of funding including approximately £40m worth of funds obtained from the DfT, therefore it is deemed appropriate to follow similar protocols for the management of the smaller Tees Valley Local Major Scheme Fund.

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3.12. A plan following a similar format to the TVBNI Project Execution Plan will be developed for the Tees Valley Local Major Scheme Fund as detailed within this assurance framework and will comprise of: 

Project Governance;



Procurement;



Financial Control;



Change Management;



Risk Management;



Progress Reporting; and



Benefits Realisation.

3.13. For each separate scheme being delivered using local major scheme funding, every quarter, a formal application will be required to be made to the LTB for a drawdown of funds. A requirement of the application will be the provision of evidence of the total expenditure in the quarter. 3.14. Each scheme’s project manager shall be responsible for the collection of the necessary evidence to justify all expenditure. At the month end the evidence shall be sent to the LTB and the nominated Finance Officer at Stockton-on-Tees Borough Council. 3.15. In summary, the LTB will ensure that: 

Agreed LTB financial contribution profiles will be set for each scheme;



The promoting local authority will be responsible for any cost increases; and



Payments will be made from the central LTB budget for actuals in arrears as per the current DfT system. Therefore the scheme promoter will only receive funding once they have provided evidence of progress and spending towards the scheme they are promoting.

Programme and Risk Management 3.16. A Risk Register will be developed for each individual scheme and any scheme with substantial risks will be ruled out at the scheme sifting stage. As with the Tees Valley Bus Network Improvements major scheme the LTB will provide payment in arrears. The promoting local authority will be expected to cover cost increases, which will minimise the risk on the central LTB budget. 3.17. Significant scheme risks will be reported monthly by the scheme project managers. From this an update will be provided to the LTB. At quarterly intervals there will be a review to capture current key risks. The focus will be on reviewing what has changed and ensuring the current risks are up-to-date. 3.18. A local major scheme fund risk register will summarise the main risks to the successful delivery of the LTB schemes, as well as highlighting common risks and interface risks across all schemes Knowledge of the interface risks will enable the LTB to manage risks more efficiently across

14

Tees Valley Local Major Transport Schemes - Assurance Framework – March 2014

the programme. Most importantly the process will provide an assurance process to demonstrate that potential causes of loss are being managed and controlled.

Monitoring and Evaluation 3.19. Scheme promoters will be required to monitor and evaluate their schemes in accordance with DfT guidance. This will be required at the delivery phase in order for the scheme promoter to obtain payment from the central LTB budget. This will consist of a quarterly summary of scheme spend to date and a summary of delivery progress on the ground. Post scheme opening data will also be collected. This will be presented to the Leadership Board and made available to the public online through the Leadership Board minutes. 3.20. As set out in DfT Major Scheme monitoring guidance, the following measures (covering inputs, outputs, outcomes and impacts) will be monitored for all schemes: 

Scheme build;



Delivered scheme;



Costs;



Scheme Objectives;



Travel demand;



Travel times and reliability of travel times;



Impacts on the economy; and



Carbon

Impacts.

15

Tees Valley Local Major Schemes

Appendix A Local Major Transport Scheme Prioritisation This note sets out the priority list which was developed for the Tees Valley’s 2015/16-2018/19 local major transport scheme budget, which has now been incorporated within the Tees Valley’s Local Growth Fund Ask within its Strategic Economic Plan. The processes followed for the transport element of the SEP will broadly follow those originally set out in the Tees Valley Assurance Framework as summarised below:

16

Tees Valley Local Major Schemes

Scheme Identification and Sifting Scheme Identification A long list of highway and public transport schemes has been identified through the Tees Valley Area Action Plan (AAP). This has been achieved within the AAP by identifying congestion hotspots using the Tees Valley Multimodal Model. The model helps to predict where development and growth, specified within the Development Database, will contribute to future congestion on the Tees Valley’s Strategic Road Network. Numerous schemes are then tested within the model to identify which will mitigate these congestion hotspots and appropriate schemes are added to the long list. The long list of schemes has also been supplement by schemes identified by local authorities through work they have undertaken on a site by site basis. The model provides an assessment of each scheme and produces outputs that can be used within the sifting and prioritisation process.

Sifting The sifting criteria have been selected so that any scheme that reaches the prioritisation phase would most likely be able to be developed into a WebTAG compliant business case with further work. The sifting criteria are:   

Value for Money: A Benefit Cost Ratio (BCR) of greater than 1.5 Total Scheme Cost: Between £1.5m and £20m Timescale: A scheme would be deliverable within the funding period (2015-19) and would provide sufficient benefits to offset its costs within 5 years of the end of the period. The full long list of schemes is shown below. Those highlighted in yellow meet all of the sifting criteria and have been taken forward in the Local Major Scheme process for prioritisation. Schemes which do not make it past the sifting process will continue to be considered within the AAP. The AAP accounts for schemes that would only be required longer term or would be better suited to other funding sources, where schemes may have to meet different criteria than those specified for Local Major Scheme funding.

17

Tees Valley Local Major Schemes

Scheme A174 Extension Dual West Park Link A66(T) Yarm Road [Grade Separation] Portrack Relief Road A66(T) Elton Interchange Middlehaven Dock Bridge Yarm Back Lane/Darlington Lane Nunthorpe Parkway A66(T) Yarm Road Inner Ring - Northgate A1(M)/A68 (J58) UTMC* Tees Valley Metro - Darlington Station A66(T) Great Burdon Inner Ring - Feethams E Middlesbrough to Prissick Stainton Way Western Extension Main Line - Darlington Station A66(M)/A1(M) (J57) Inner Ring - Russell Street A19/A174 (Option 6) A66(T) Blands Corner Central Park Southern Access Inner Ring - Freemans Place North Burn Access Greystones Teesside Park Second Access Wynyard/Wolviston Oakesway-Port Access Dockside Road Extension Swans Corner/Ormesby BankA174 A174 Dual Redcar - Saltburn Rail: Nunthorpe - Guisborough

In Timescale YES YES

Cost £m 3.28 1.075

12.786 24.438

Benefit Year* 2015 2015

2015-19 Position Assessment ADVANCE - prioritisation Alternative Funding (Cost)

YES

12

21.050

2018

ADVANCE - prioritisation

YES YES YES

9.832 7 4.5

22.331 13.844 4.262

2019 2020 2021

ADVANCE - prioritisation ADVANCE - prioritisation ADVANCE - prioritisation

YES

2

1.542

2031

Later Delivery

YES YES YES YES YES

5 4.307 4 1.5 2

0.000 0.000 0.000 0.000 n/a

n/a n/a n/a n/a n/a

Alternative (Benefit) Alternative (Benefit) Alternative (Benefit) Alternative (Benefit) Later Delivery

NO

18

3.114

2016

Later Delivery

NO NO NO

2.706 5.5 11

15.167 0.000 28.093

2033 n/a n/a

Later Delivery Alternative (Benefit) Later Delivery

NO

8

3.797

n/a

Later Delivery

NO NO NO NO NO NO NO NO NO NO NO NO NO

70 7.5 7 6 4.56 3.05 2.83 n/a n/a n/a n/a n/a n/a

n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a

n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a

Later Delivery Later Delivery Later Delivery Later Delivery Later Delivery Later Delivery Later Delivery Later Delivery Later Delivery Later Delivery Later Delivery Later Delivery Later Delivery

NO

n/a

n/a

n/a

Later Delivery

NO NO

n/a n/a

n/a n/a

n/a n/a

Later Delivery Later Delivery

BCR

*Benefit Year relates to when a scheme begins to have a positive benefit and starts to pay back its costs.

18

Tees Valley Local Major Schemes

Scheme Prioritisation The Tees Valley transport priorities were established within Connecting the Tees Valley, the Tees Valley Statement of Transport Ambition, published in April 2011. This provided a Tees Valley transport perspective on the 2010 National Infrastructure Plan and a response to the Tees Valley’s Economic and Regeneration Statement of Ambition. The role of transport was summarised within three challenges, which were to: 

Improve the journey experience of transport users of urban, regional and local networks, including interfaces with national & international networks;  Improve the connectivity and access to labour markets of key business centres; and  Deliver quantified reductions in greenhouse gas emissions within cities and regional networks, taking account of cross-network policy measures. These challenges have shaped the development of the Tees Valley Area Action Plan, which has led to the prioritisation of Local Major Schemes by their delivery of GVA (Gross Value Added), homes and carbon benefits. The shortlisted schemes have then been indexed by their relative (to other schemes within the shortlist) GVA, homes delivered and carbon benefit per £1m spent. As well as meeting the Tees Valley’s value for money criteria to pass through the sifting process, the benefits per £1m spent will also favour higher value for money schemes in the prioritisation process. Weightings of 1, 2 and 3 have been applied to each index respectively to calculate a total score.

GVA The GVA of a scheme has been derived from the number of jobs2 that could be facilitated by the extra road capacity generated by a scheme, as predicted by the Tees Valley Strategic Transport Model. The type of job generated is then determined using the Tees Valley Development Database and a GVA is generated from the direct jobs, indirect jobs and construction jobs. The final GVA index is then calculated by dividing the GVA by the cost of the scheme and indexing it against the other shortlisted schemes. Homes Delivered The number of homes1 delivered is estimated from the extra road capacity generated by a scheme, as predicted by the Tees Valley Strategic Transport Model. The final Homes Delivered index is then calculated by dividing the number of homes delivered by the cost of the scheme and indexing it against the other shortlisted schemes. Carbon Benefit The carbon benefits of a scheme have been derived from the Tees Valley Strategic Transport Model, through TUBA analysis. In simple terms, a scheme which increases the average speed on the surrounding road network will improve fuel efficiency and therefore increase the carbon benefit.

2

Taken from the Tees Valley Development Database

19

Tees Valley Local Major Schemes This is of course up to a certain speed threshold where a higher average speed will start to have a negative effect on fuel efficiency, thus a reduction in the carbon benefit. The final Carbon Benefit index is then calculated by dividing the benefit by the cost of the scheme and indexing it against the other shortlisted schemes. Other Criteria Local contributions, external funding and any income that could be generated from a scheme will be taken into consideration at a later stage, once scheme business cases have been developed. Noise, air quality, the physical environment, social and distributional impacts will also be considered at this time.

20

Scheme Prioritisation Scheme Middlehaven Dock Bridge Portrack Relief Road

Promoting Authority Middlesbrough

Scheme Cost

Local Contribution

£m

£m

4.5

1.35

GVA

VFM

Homes

Carbon Benefits

Total

Risks Alternative Funding

Index

Weighting

Score

Index

Weighting

Score

Index

Weighting

Score

4.262

1.00

3

3.00

0.16

2

0.31

0.35

1

0.35

3.66

22.331

0.68

3

2.03

0.38

2

0.76

0.21

1

0.21

3.01

12.786

0.35

3

1.05

0.43

2

0.85

1.00

1

1.00

2.90

Stockton-on-Tees

9.832

A174 Extension Dual

Stockton-on-Tees

3.28

A66(T) Elton Interchange

Stockton-on-Tees

7

13.844

0.25

3

0.74

1.00

2

2.00

0.06

1

0.06

2.80

A66(T) Yarm Road [Grade Separation]

Darlington

12

21.050

0.42

3

1.25

0.13

2

0.26

-0.26

1

-0.26

1.25

1.538

Note The numbers provided above are indicative. The model is to be rebuilt and scenarios rerun for the final business case production.

Alternative Funding Scheme under development Scheme under development

A174 Extension Dualling

Tees Valley Local Major Schemes

* Delivered as DfT Local Pinch Point Scheme * A174 Extension Dualling Scheme Promoter: Stockton-on-Tees Borough Council Description: Dualling of the A174 Extension between approved UK Land roundabout access to Teesside Industrial Estate and the A174/A1044 junction. This will link with the Highways Agency approved pinch point scheme for the A19/A174 interchange.

Total Scheme Cost: Total Scheme Score (out of 6): £3.28m 2.90 Local Contribution: Local Contribution Source: £1.538m Private developer Cost Profile: 2015/16 2016/17 2017/18 2018/19 2019+ £3.28m Transport Issues scheme addresses: Congestion at the A174/A1044 junction leading to access issues into Teesside Industrial Estate and access to and from the strategic road network. The scheme will release economic and housing development opportunities. Scheme feasibility & risks: The scheme is completely within Council Highway land and has a low risk level. What evidence is available to support case: Detailed model of junction showing AM and PM peak congestion. What work has been undertaken towards the scheme: Outline scheme design and modelling. Lower cost alternative: Various options explored. Possible future additional developments/stages: None Revenue Generated: None

24

A174 Extension Dualling

Tees Valley Local Major Schemes

Location of developments facilitated by the extra capacity released by the scheme: Homes Jobs

Criteria Value for Money Benefit Year (when scheme would become beneficial) Economic Growth (work related trips) Access to Employment (commute) Access to Amenities (other) Carbon Benefit Payback Years (time taken for benefit to outweigh cost) Resilience of Network (extra capacity made available) Jobs Homes GVA Total

25

Value 12.786 2015 £7.91m £28.17m £6.13m £0.89m 5 5563 veh/km 551 147 £14.002m/pa

Score

1

0.85 1.05 2.90

A66(T) Elton Interchange

Tees Valley Local Major Schemes

* Part of West Stockton Improvement Scheme * A66(T) Elton Interchange Scheme Promoter: Stockton-on-Tees Borough Council Description: Adaption of existing junction layout (2 adjacent roundabouts) to a single roundabout using the existing bridges. The widening of the eastbound slip onto the A66 to improve capacity. Reduction of speed limit on the A66 to 50mph through and to the east of the junction.

Total Scheme Cost: £7m Local Contribution: None Cost Profile: 2015/16

Total Scheme Score (out of 6): 2.80 Local Contribution Source: 2016/17 2017/18 £3.5m

2018/19 £3.5m

2019+

Transport Issues scheme addresses: Capacity on Elton Interchange is stifling growth on West Fairfield/Harrowgate Lane. There are developer proposals for between 2500-3000 homes for the area. Scheme feasibility & risks: Risk level is assumed low What evidence is available to support case: Arup are currently developing a micro-sim model for the west of Stockton. What work has been undertaken towards the scheme: Outline modelling work and alignment work for the roundabout itself. Lower cost alternative: At this stage detailed design and costs are not yet available. Possible future additional developments/stages: Links to roundabout proposal on Darlington Back Lane/Yarm Back Lane junction. Revenue Generated: None

26

A66(T) Elton Interchange

Tees Valley Local Major Schemes

Location of developments facilitated by the extra capacity released by the scheme: Homes Jobs

Criteria Value for Money Benefit Year (when scheme would become beneficial) Economic Growth (work related trips) Access to Employment (commute) Access to Amenities (other) Carbon Benefit Payback Years (time taken for benefit to outweigh cost) Resilience of Network (extra capacity made available) Jobs Homes GVA Total

27

Value 13.844 2015 £19.79m £45.27m £15.83m £0.21m 7 1088 veh/km 1129 1384 £39.799m/pa

Score

0.06

2.00 0.74 2.80

A66(T) Yarm Road

Tees Valley Local Major Schemes

* An alternate solution is now under consideration * A66(T) Yarm Road Scheme Promoter: Darlington Borough Council Description: Conversion of the A66(T) Yarm Road roundabout to a grade separated roundabout.

Total Scheme Cost: £12m Local Contribution: Not yet identified Cost Profile: 2015/16

Total Scheme Score (out of 6): 1.25

Local Contribution Source: LTP; DETC Development Fund; HA; DTVA 2016/17 2017/18 2018/19 2019+ £6m £6m Transport Issues scheme addresses: The A66(T) Darlington Bypass serves both strategic and local vehicle movements around the east side of Darlington. The single carriageway road is increasingly experiencing traffic congestion at peak periods and this is already acting as a barrier to the full realisation of the residential and economic potential of development sites in the urban area. This has been raised as an issue in the Darlington Economic Strategy and is one of the tasks within the adopted strategy's action plan, not least mitigating the effect on the prestige Morton Palms office development. Scheme feasibility & risks: Land acquisition required at Yarm Road What evidence is available to support case: Policy CS19 in the Local Development Framework Core Strategy sets out the case for improvements along this section of the A66. The adjacent Lingfield & Morton Palms areas are the Council’s second Priority Employment Area (Policy CS5). A development total of 161,680 sqm has been allocated within the adjacent employment areas in the urban area, with a further 231,600 sqm reserved for aviation related uses at Durham Tees Valley Airport. Policies CS6 & CS10 also identify adjacent areas for cultural, tourism and housing. What work has been undertaken towards the scheme: None 28

A66(T) Yarm Road

Tees Valley Local Major Schemes

Lower cost alternative: None Possible future additional developments/stages: Further improvements to the A66 around Darlington. Revenue Generated: None, although development enabled will generate business rates or Council Tax. Location of developments facilitated by the extra capacity released by the scheme: Homes Jobs

Criteria Value for Money Benefit Year (when scheme would become beneficial) Economic Growth (work related trips) Access to Employment (commute) Access to Amenities (other) Carbon Benefit Payback Years (time taken for benefit to outweigh cost) Resilience of Network (extra capacity made available) Jobs Homes GVA Total

29

Value 21.050 2018 £33.32m £108.61m £15.44m -£1.60m 14 692veh/km 1704 309 £115.297m/pa

Score

-0.26

0.26 1.25 1.25

Middlehaven Dock Bridge

Tees Valley Local Major Schemes

* Previously known as Manhattan Gate * Middlehaven Dock Bridge Scheme Promoter: Middlesbrough Council Description: The provision of a vehicular and pedestrian bridge over the dock entrance for improved access to Middlehaven which would unlock further major development sites and improve connectivity of the area, providing greater resilience to the wider road network.

Total Scheme Cost: Total Scheme Score (out of 6): £4.5m 3.66 Local Contribution: Local Contribution Source: £1.35m HCA Cost 2015/16 2016/17 2017/18 2018/19 2019+ Profile: £1.5m £3m Transport Issues scheme addresses: Provides a vital direct transport link into Middlehaven. Improving linkages and removing access barriers to the transport network to stimulate economic activity and growth. No. of gross jobs created – 600 Scheme feasibility & risks: Feasibility study has been completed giving 3 possible bridge options. What evidence is available to support case: A contribution of 30% towards the total cost of the scheme has been secured from HCA. This project would generate economic growth by creating opportunities for business development and employment opportunities for local people. What work has been undertaken towards the scheme: Feasibility study completed and project is being progressed to RIBA Stage D. Lower cost alternative: None Possible future additional developments/stages: This scheme will accelerate the rate of investment in this flagship regeneration scheme. Revenue Generated: None

30

Middlehaven Dock Bridge

Tees Valley Local Major Schemes

Location of developments facilitated by the extra capacity released by the scheme: Homes

Jobs

Criteria Value for Money Benefit Year (when scheme would become beneficial) Economic Growth (work related trips) Access to Employment (commute) Access to Amenities (other) Carbon Benefit Payback Years (time taken for benefit to outweigh cost) Resilience of Network (extra capacity made available) Jobs Homes GVA Total

31

Value 4.262 2021 £21.17m £51.75m -£3.30m £0.56m 7 1247veh/km 1459 97 £72.37m/pa

Score

0.35

0.31 3.00 3.66

Portrack Relief Road

Tees Valley Local Major Schemes

Portrack Relief Road Scheme Promoter: Stockton-on-Tees Borough Council Description: The scheme would include the creation of a new 1.3km highway link by utilising the former Billingham Beck Branch Railway between Marston Road and the A1032 Newport Bridge Approach Road.

Total Scheme Cost: £9.832m Local Contribution: None Cost Profile: 2015/16

Total Scheme Score (out of 6): 3.01 Local Contribution Source: 2016/17 2017/18 £0.8m £4.516m

2018/19 £4.516m

2019+

Transport Issues scheme addresses: The area is well served by highway infrastructure but the intersection of the A19 with the A66 is one of the most heavily congested roads in the region. It is recognised that to open up development opportunities within both communities a package of proposals needs to be developed and delivered which will embrace a combination of improvements and management of the primary road infrastructure, additional secondary road infrastructure, improvements to public transport and various traffic management measures. Scheme feasibility & risks: What evidence is available to support case: An Outline Business Case – Second Stage (River Tees North Bank Infrastructure Measures) was produced for the Stockton-Middlesbrough Initiative in February 2011. This included details on highway engineering, civil engineering, financial appraisal and environmental appraisal. What work has been undertaken towards the scheme: As above Lower cost alternative: None Possible future additional developments/stages: None Revenue Generated: None

32

Portrack Relief Road

Tees Valley Local Major Schemes

Location of developments facilitated by the extra capacity released by the scheme: Homes

Jobs

Criteria Value for Money Benefit Year (when scheme would become beneficial) Economic Growth (work related trips) Access to Employment (commute) Access to Amenities (other) Carbon Benefit Payback Years (time taken for benefit to outweigh cost) Resilience of Network (extra capacity made available) Jobs Homes GVA Total

33

Value 22.331 2019 £69.28m £247.15m £11.37m £1.06m 2 1519veh/km 3685 743 £153.198m/pa

Score

0.21

0.76 2.03 3.01

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