Public Sector

Public Sectors - Flood Prevention

Concerned departments felt that new methods of appraising the costs and benefits of Flood and Coastal Erosion Risk Management might lead to a more equitable distribution. A key requirement was for greater transparency and a desire to show more clearly how the costs and benefits of proposed schemes are distributed between stakeholders.

Oxford Risk: 

• Endorsed the use of market prices and multi-criteria analysis as key components, should a new ‘distributional accounting’ approach be developed.
• Suggested revised terminology and analytical procedures for handling private contributions and equity between richer and poorer households.
• Recommended structures, monetised costs and benefits and an appraisal summary consistent with guidance from the Treasury Green Book.
• Evaluated the availability of the data necessary for the suggested new methodologies.
• Concluded that introducing distributional accounting would entail no significant new calculations and that any extra ongoing cost was unlikely to be material. 

The benefits confirmed that, if implemented, the new methodology would indeed result in a more equitable distribution of costs and benefits of schemes and greater transparency in how this distribution was calculated.

Rail Industry – Safety Investment Decisions

The rail industry is concerned to ensure that ‘scarce resources’ are used to the maximum effect in improving safety. The industry is both publicly and privately funded, is seen as a ‘public service’ by most consumers, and is subject to standards and expectations that are not apparent in other sectors, even in transport. The industry needs clear measures of the public’s expectation and relative valuation of avoiding the very small risk of injury or death while using the rail system so that safety decision investments can be reliably informed. In the course of several projects, Oxford Risk:

• Reviewed the established VPF (value of preventing a statistical fatality) and provided arguments for revising the calculation and categorisation of the results in the light of improvements and changes in medical outcomes. 
• Considered the impact of ‘societal concerns’ on the evaluation, methodology and application of the VPF.
• Recommended appropriate and justifiable weightings for comparing fatalities with injuries of different severities, together with a preliminary empirical study to provide information about acceptability to the public of the suggested weightings, and later a full public survey.
• Produced a new evaluation of the online and one-to-one public survey, explained its potential impact and the arguments the industry might use to convince the public, the Department of Transport and others.

The benefit has been a more up-to-date and rigorous science-led basis for the fundamental valuation criteria underpinning the industry’s safety planning. This should ensure the most appropriate allocation of resources to competing safety investments.