2.3 Establishing the Do-Minimum and Reference Case Scenarios

In order to properly identify future issues, problems, and opportunities on the transport network, as well as how long current ones may persist, it is necessary to understand how the demand, supply, and cost of travel in the study area is likely to change in the future. This will provide a baseline against which all interventions can be considered. This baseline should be developed alongside the analysis of problems and opportunities. 

Note that at the Pre-Appraisal stage there is no expectation that this baseline will be modelled in a transport or land-use model, although if outputs from such models are readily available they may be used to inform the baseline; however, the baseline established during Pre-Appraisal should be as consistent as possible with that used for modelling purposes in the later stages of the appraisal.

Relevant factors which may affect the demand for transport are:
• New developments in the study area (e.g., residential, retail, offices);
• Changes in national demographics (e.g. an increase in the proportion of the elderly may increase demand for leisure travel and shift travel demand from peak to off-peak); and
• Changes in the size and composition of the local population;
• Transport infrastructure pricing policies;
• Vehicle ownership and use;
• Passenger transport service pricing policies; and
• Transport regulatory policies.

Relevant factors which may affect the supply of transport are:
• New infrastructure (e.g., roads, rail stations, cycle facilities);
• Passenger transport service costs
• Management of existing and new infrastructure;
• Changes to existing infrastructure (e.g. high-occupancy vehicle only lanes); and
• Changes to existing transport services (e.g. increased frequency on public transport).

Some factors which may affect the cost of travel are:
• Congestion;
• Parking charges;
• Fares (e.g. the advent of integrated ticketing on public transport); and
• Travel time.

Note that these lists are not exhaustive.

The identification of these factors forms an important part of any study; however, the resources devoted to this process should be proportionate to the scale of the study. In most cases it will be sensible to limit the analysis to the geographical area of the study; however, if there are significant changes occurring outside the study area, such as competing developments or new infrastructure schemes, these should be included.

There is also a set of external factors which will affect the transport baseline; these include national GDP growth, fuel prices, and vehicle efficiency changes. These factors will typically be outside the scope of the setting of the baseline at the Pre-Appraisal stage. They should, however, be addressed at later stages, in line with the guidance set out in Section 13.6.

In all cases, it is important that predicted changes in future land-use are based upon documented evidence, and that this evidence is recorded.

Information relating to the demand, supply and costs of transport at a national level for current and future forecast years can be provided by the LATIS service (Land Use and Transport Integration in Scotland, see Section 17.2.16). An application for LATIS data (extracted from the National Transport and Land-Use Interaction Model) can be made by visiting: www.latis.org.uk. Section 2.4 Data Analysis, sets out further sources of data that can inform the process.

It is recognized that practitioners may wish to use local data to inform this process, but it should be noted that Transport Scotland view the data contained within LATIS as the most likely view of the future. Section 2.4 Data Analysis, sets out further sources of data that can inform the process.

To assist in the definition of a Do-Minimum and Reference Case, the factors influencing demand, supply and costs of travel should be analysed for the study area, each in turn, and used to construct an uncertainty log as illustrated below. The following classifications of uncertainty should be used, which are consistent with those of the Department for Transport.

Table 2.1 - Classifications  

*Whilst adopted local plans may be viewed as containing interventions that are likely to happen, it should be recognized that they will typically represent a local authority’s aspiration for the local area, and therefore their forecast changes to land-use and development should be treated with caution, particularly where these forecasts imply levels of growth which are significantly above the national trend. It will typically be appropriate to subject these predicted change to sensitivity tests.

Note that, for transport improvements which affect the trunk road network or rail infrastructure, commitment from Transport Scotland or Scottish Ministers is required before a scheme should can be classified as ‘near certain’. For improvements which impact upon local authority controlled infrastructure, the commitment of the relevant local authority is required.

The results of this process should be formally recorded in an uncertainty log and reported as an appendix to the STAG report. As at all stages of Pre-Appraisal, a wide range of stakeholders should be consulted to ensure that the uncertainty log has a broad basis of support. Although the initial development of the uncertainty log should occur during the Pre-Appraisal stage, the evidence used to arrive at the assessment should be recorded and kept under review as the study develops. It is essential that the allocation of likelihoods to proposals be carried out in a way that is realistic and based on local knowledge.

The uncertainty log should also highlight the interactions between different factors. Where the uptake of a development is conditional on a transport intervention going ahead it is recommended that the uptake is forecast using integrated transport-land-use modelling.

An example of part of an uncertainty log is given below:

Table 2.2: Uncertainty Log

As well as uncertainty over the occurrence of any given factor, it is recognized that it is equally possible for there to be uncertainty relating to its timing. This should be reflected in the uncertainty log, but it is left up to practitioners to agree with stakeholders the best approach to adopt when there is more that one source of uncertainty associated with a single factor.

It is also recognized that, due to the long timescales of transport interventions, some factors may occur in the relatively distant future. The uncertainty log should reflect the fact that uncertainty increases the further into the future the time period being considered. There is no set time horizon over which potential factors should be considered; rather, the time horizon for the study is left up to the judgement of the practitioner and stakeholders.

Again, it is emphasized that the resources devoted to this stage of Pre-Appraisal should be proportionate to the scale of the study.

Defining the Do-Minimum

The do-minimum is defined as the most likely transport situation over the course of the appraisal period if no intervention were to occur. It should therefore be based on the assessment set out in the uncertainty log. At the local level, the composition of the do-minimum will involve the practitioner to exercise judgement, but Transport Scotland expect that only factors which are classed as ‘near certain’ or ‘more than likely’ would be included in the do-minimum, with factors classed as ‘reasonably foreseeable’ or ‘hypothetical’ reserved for sensitivity testing through the use of reference cases.

The do-minimum should also include minor changes which can be expected to be carried out as conditions deteriorate, should the proposed interventions not go ahead. These improvements should not be significant, with any significant changes considered as an option in their own right as part of Option Generation, Sifting and Development (see Section 4).

The do-minimum should be:
• Unbiased: (that it, as likely to be exceeded as undershot, on any relevant measure);
• Coherent and self-consistent (if X is ‘highly likely’ to be accompanied by Y, then both X and Y should be included);
• Free-standing (not dependent on other scenarios for its definition); and
• Evidence based and defendable.
 

Demand and land-use in the do-minimum

As discussed above, Transport Scotland view the forecast data within LATIS as the most likely view of the future at a national level. Forecast demand within LATIS is based on recent planning and population data. Therefore, when preparing studies which will, or which may be reasonably expected to:
• Impact on the performance or operation of the trunk road network;
• Impact on the performance or operation of the rail network;
• Require funding from Transport Scotland or the Scottish Government; or
• Require support from Transport Scotland or the Scottish Government at any stage of the statutory process.

Transport Scotland requires that, at the regional or city level, demand should be consistent with LATIS forecasts. Other than in exceptional circumstances, which should be discussed with Transport Scotland, deviations from these forecasts should only be included as a reference case.

Defining the Do-Something

For the purposes of an economic appraisal, the do-something is defined as the do-minimum with the transport intervention; i.e., there is no additional development in the do-something. Where practitioners are undertaking an assessment of the operation, environmental or patronage impact of an intervention, however, the expected level of additional development should be included in the do-something.

Defining the Reference Case

Practitioners may also find it helpful to develop a ‘reference case', which includes other non-controversial but as yet uncommitted transport schemes and/or development profiles, and which can be used as a baseline for option comparison. At the Pre-Appraisal stage, it will typically not be necessary to develop reference cases; it is simply important that the uncertainty around the forecast do-minimum is recognised. During the Part 2 Appraisal, however, practitioners should develop references cases to match the assessment of uncertainty as set out in the uncertainty log.

Practitioners should not feel limited to developing a single reference case. The number of reference cases used should be sufficient that, in the view of the stakeholder involved, the uncertainties set out in the uncertainty log are adequately reflected.

If all uncertainties are treated separately, the likelihood exists that a large number of potential reference cases could be developed. Such an approach is likely to be impractical and disproportionate, and instead factors should be grouped when forming references cases. This should be done using the analysis in the uncertainty log, taking account of any interdependencies of different factors.

Again, it is expected that reference cases will be:
• Coherent and self-consistent; and
• Evidence based and defendable.

See Section 13.6 for more information on the use of reference cases in sensitivity analysis.