Project appraisal - Transport Policy and Planning in Great Britain - page 355

Table 21.4 VfM categories (source: TAG Unit 3.5.6 (2006) Tables 1 and 2)

BCR VfM category

Less than 1 Poor

Between 1 and 1.5 Low

Between 1.5 and 2 Medium

Over 2 High

experienced by others which are not reflected in costs borne by individual travellers.
This can be viewed as the amount these other people would be prepared to pay to
avoid the adverse effects of journeys being made. Examples would be the additional
amount a household might pay for a property which did not suffer from traffic noise, or
a traveller for a journey to avoid the effects of congestion or over-crowding.

Integrating non-monetised impacts into the overall VfM assessment

Although all schemes with a benefit-cost ratio (BCR) greater than 1 might be worth
pursuing< financial constraints mean that it is necessary to select between a number
of such schemes. It is therefore helpful to try and categorise or prioritise schemes, at
the same time taking into account the value attached to non-monetised impacts.
The Department utilises four VfM categories which are labelled as shown in Table
21.4. Non-monetised impacts are then examined to see whether they might alter
the categorisation indicated by the BCR. The Department emphasises that impacts
need to be significant relative to costs in order to change a scheme's categorisation. For
example non-monetised benefits would have to be valued at more than 40% of costs
in order for an option with a BCR of 1.1 to be raised from the low to medium category.
DfT acknowledges that estimating the implications of non-monetised benefits for
VfM is by its nature very difficult. However it goes on to state that:

In practice they are often comparatively small. In our experience, non-monetised
impacts need to be unusually high to move an option two or more 'value for
money' categories. Building new infrastructure through an environmentally
sensitive area might be an example of the latter. Some road schemes with very
high BCRs have been rejected because the negative environmental impacts are
so big they end up being 'poor' value for money.

(DfT 2006c para 18)

Submissions to Ministers are expected to contain a section on value for money
setting out the BCR, a short commentary on any significant non-monetised impacts
and the overall VfM assessment. An illustration of the Department's practice on this
subject is given in Box 21.1. This relates to the proposal to improve the western end
of the A303 near Ilminster, Somerset via the A30 to Honiton (and thence via an
existing improved section of the A30 to the M5 at Exeter). The effect of the scheme
would be to complete a near-continuous dual carriageway route from London to
South-West England as an alternative to the M4/M5 route via Bristol. This was
compared with the option of providing a shorter link from the A303 via the A358 to
the M5 at Taunton which avoided the Blackdown Hills Area of Outstanding Natural
Beauty (AONB).