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Guidance documents: Expert

Unit 3.6: The Accessibility Objective

There are four modules within this section:

3.6.1: The Option Values Sub-Objective

3.6.1d: The Option Values Sub-Objective - Draft

3.6.2: The Severance Sub-Objective

3.6.3: The Access to the Transport System Sub-Objective

3.6.4: The Personal Affordability Sub-Objective

TAG Unit 3.6.4: The Personal Affordability Sub-Objective

April 2011

 Unit 3.6.4 (Adobe Acrobat - 67KB)

1. Personal Affordability
   1.1 Why is personal affordability important?
   1.2 Which groups of people are particularly vulnerable to the effects of the costs of travel?
   1.3 When should personal affordability be considered in the transport strategy and option development process?
2. Principles in the Analysis of Personal Affordability
   2.1 Introduction
   2.2 Scope of the Strategic Personal Affordability Review
3. The Personal Affordability Analysis Process
   3.1 Introduction
   3.2 Personal Affordability: Core Analysis (Step 4)
   3.3 Outputs from Appraisal (Step 5)
4. Further Information
5. References
6. Document Provenance

1. Personal Affordability

1.1 Why is personal affordability important?

1.1.1 The concept of 'personal affordability' and the costs of travel borne by different groups of people have not previously been addressed in detail in Transport Analysis Guidance (TAG). There is a substantial body of research to demonstrate that the costs of travel can in some cases be a major barrier to mobility for certain groups of people, and increases in travel costs can have particularly acute effects on their ability to access key destinations. This new TAG Unit provides guidance to the analyst on the process to be followed in considering the potential personal affordability impacts of transport interventions.

1.1.2 Although poorer people spend less money on travel than the rest of the population, this often accounts for a far greater proportion of their income 'Making the Connections' (Social Exclusion Unit, 2003). In part this reflects low average rates of car ownership, and low car running and depreciation costs where a car is owned. However, where budgets are very constrained, changes to the transport network that involve changes in user charges could have a particularly strong impact on people in low income groups.

1.2 Which groups of people are particularly vulnerable to the effects of the costs of travel?

1.2.1 The most significant impacts of the costs of travel are on young people and low-income households, particularly when travelling to employment or education. People with disabilities may also suffer significant dis-benefits when faced with higher costs, due to limited transport choices, whilst unemployed adults also have difficulties in accessing services (including training), again due to low incomes.

1.2.2 Changes in transport costs could have disproportionate effects where there are few or no travel alternatives, especially where income levels preclude car ownership and use. In such cases and where budgets are constrained, a step change in public transport costs might affect travel to, for example, work or further education. Consideration should therefore be given to the social impacts of changes in transport costs, resulting from transport interventions, experienced by young people, people with disabilities and low income households. The fact that lower income households are likely to suffer more from increases in transport costs also implies that there is a strong distributional element.

1.2.3 Guidance on the social and distributional impacts of transport interventions (including changes in the personal affordability of travel) is provided in TAG Unit 3.17, Social and Distributional Impacts of Transport Interventions.

1.3 When should personal affordability be considered in the transport strategy and option development process?

1.3.1 Consideration of personal affordability issues should take place throughout the appraisal process, commencing with the consideration of current and future transport challenges, in which the opportunity should be taken to consider options to tackle identified personal affordability problems.

1.3.2 In so doing, the analyst should make reference to existing policy documents and evidence to identify personal affordability challenges for different groups of people within the local area. This could include, for example, the Accessibility Strategy contained within the Local Transport Plan for the area under consideration.

1.3.3 Personal affordability issues should also be considered in the process of identifying options for intervention, and personal affordability impacts should be taken into account in the analysis of specific transport interventions.

2. Principles in the Analysis of Personal Affordability

2.1 Introduction

2.1.1 The Personal Affordability assessment is concerned with changes in the monetary cost of travel that form part of the decision making processes for travellers. It mirrors the user benefit appraisal component and can be based on the user charge assessment as considered in the Transport Economic Efficiency analysis, but requires a further qualitative analysis to ensure that all key monetary impacts can be considered by impact group irrespective of their inclusion in formal modelling processes.

2.1.2 As the principles are similar to the derivation of transport user benefits and transport user changes, the basic Personal Affordability assessment can be captured as an output from TUBA, in this case only for 'non-working time' (which includes travel to and from work). 'Working time' (i.e. travel undertaken in the course of paid employment, but not travel to and from work) benefits or disbenefits are experienced by businesses. Some affordability issues, such as season ticket costs, may apply specifically to commuters: if people are excluded from work by affordability issues then this is an important issue - on a large scale it could actually impact on income distribution in an area.

2.1.3 Whilst all Personal Affordability impacts would ideally be fully reflected in user charges, it is possible that the subtleties of charging systems, both public and private transport, may result in some impacts being neglected in the formal approach underpinning user charge produced by TUBA, principally due to simplifications in the representation of charges in transport models.

2.1.4 To address these issues, appraisers should undertake a strategic Personal Affordability review of potential changes in modal cost that could occur as a result of the policy, strategy or specific intervention. This review should be comprehensive, to ensure that all potential impacts on Personal Affordability are considered, irrespective of whether these have been fully or partially considered in any TUBA output. In addition to confirming that the assessment is comprehensive, such a review can be used to confirm that the TUBA assessment does not include spurious benefits or disbenefits generated by the simplicity of, for example, public transport fares modelling.

2.2 Scope of the Strategic Personal Affordability Review

2.2.1 This review should consider all relevant monetary transport charges, assisted by the Personal Affordability Worksheet. Key areas for consideration include:

• Parking charges (including where changes in the allocation of free or reduced fee spaces may occur);
• Car fuel and non-fuel operating costs (where, for example, rerouting or changes in journey speeds and congestion occur resulting in changes in costs);
• Road user charges (including discounts and exemptions for different groups of travellers);
• Public transport fare changes (where, for example premium fares are set on new or existing modes or where multi-modal discounted travel tickets become available due to new ticketing technologies); and
• Public transport concession availability (where, for example concession arrangements vary as a result of a move in service provision from bus to light rail or heavy rail, where such concession entitlement is not maintained by the local authority).

2.2.2 Whilst there exist approaches to assessing Personal Affordability that are grounded in economic theory, the approach set out in this guidance is based on a more pragmatic methodology, which seeks to identify where an intervention might result in a material change to the cost of travel for particular groups of travellers.

2.2.3 This approach uses a 'checklist' approach to identify where aspects of the intervention may have positive or adverse consequences. The checklist first provides a means of screening: it is quite feasible that none of the potential impacts on the checklist will be a feature of the intervention being appraised, in which case there is no need to undertake further analysis. For an intervention where potential impacts are identified, the analyst is then required to undertake further analysis to estimate the likely scale of the impact on users.

2.2.4 In most cases, affordability impacts may be considered as indirect impacts of the intervention, i.e. transport interventions are usually conceived to improve transport efficiency, accessibility and/or safety. Through the use of this Guidance, the analyst is encouraged to consider potential impacts of the intervention and, if appropriate, take steps to mitigate the impact.

2.2.5 As an example, consider what happens when a new high capacity light rail system is introduced, and effectively replaces an existing bus service. Senior Citizens who currently use the bus service will be entitled to free travel on the bus services under current concessionary arrangements, but an equivalent scheme is not automatically going to be available on the light rail system, as such systems are not covered by the national concession scheme, unless separate arrangements are put in place by the scheme promoter. In such cases this group would face a material increase in the cost of using public transport at their existing location, or a walk to a more distant stop where buses still operate, unless mitigated by measures put in place by the promoter.

2.2.6 These types of impact are not generally identifiable from transport models. For sensible and practical reasons, transport models tend to use average travel costs and do not include social group segmentation. This is, nevertheless, a material impact that currently tends to be overlooked. Therefore, consideration should be given to issues such as concessionary fares and parking charge discounts, the availability of children's and family/group fares, purchase channel and means (e.g. cheapest fares are often only available online or to owners of bank cards who must therefore have a bank account).

2.2.7 The primary area of interest is the change in cost of using each mode, as is the case throughout the appraisal process. However, one aspect that also needs to be considered is the Personal Affordability impact of shifting between transport modes, in particular if the price of using a new mode is preventing or promoting mode shift, or passengers are in effect forced either to use a different, more expensive mode due to changes in supply, or to discontinue or significantly change their travel for example where no other affordable travel option exists.

2.2.8 Outputs from the User Benefit analysis, described in Transport User Benefit Computation (TAG Unit 3.5.3), may also provide evidence of changes in user charges, but will need to be treated with some caution by the practitioner, given the aggregate nature of models and simplification in modelling of fares and charges.

2.2.9 The analyst should make specific reference to the potential impacts on different groups of people (Social and Distributional Impacts) when considering the Personal Affordability impacts of the intervention. Guidance on Social and Distributional Impacts is provided in Social and Distributional Impacts of Transport Interventions (TAG Unit 3.17).

3. The Personal Affordability Analysis Process

3.1 Introduction

3.1.1 The approach described in this chapter is based on a five-step sequence, as follows:

• Step 1 - identification of the area impacted by changes in personal affordability in the use of transport
• Step 2 - analysis of the demographic profile in the area impacted by changes in personal affordability;
• Step 3 - a screening process, to determine if it is appropriate to undertake further analysis of the changes in personal affordability;
• Step 4 - the core personal affordability analysis; and
• Step 5 - the collation and presentation of the outputs from the personal affordability analysis process.

3.1.2 These five steps are outlined in the diagram below. The process to be followed for Steps 1-3 is described in TAG Unit 3.17.

3.1.3 In the event of personal affordability impacts being identified from the screening process, either through use of the affordability checklist or user charges impacts from a TUBA analysis, the sections below should be used to guide the technical analyses required in Steps 4 and 5 of this process.



Figure 1 - Personal Affordability Analysis Process

3.2 Personal Affordability: Core Analysis (Step 4)

3.2.1 Where changes in the cost of travel have been identified through the screening process, these need to be quantified as far as possible for each Super Output Area (SOA) in the study area. In some cases specific monetary impacts may have been fully captured by the transport model, in which case the 'Detailed Outputs' feature in TUBA can be used to provide a quantification of impacts. However, in many cases the range of transport price and cost impacts will not be fully captured by the transport model, and in these cases an indicative estimate of the level of impact will be required instead.

3.2.2 The first step in the analysis is therefore to determine which, if any, of the impacts are captured using TUBA. Table 1 below shows a worked example of this assessment based on the potential cost changes identified in Table 6 in Unit 3.17, demonstrating how this could work for a particular intervention. This checklist is not exhaustive, but should cover the majority of changes that are likely to occur.

Table 1 - Example of the Scope of Potential Changes in the Costs of Travel



Mode	Cost Change	Step 3: Cost change expected?	Step 4: Change Captured in TUBA?	Step 4: Quantified Impact
Car	Car fuel and non-fuel cost	No
	Road user charges	No
	Public parking charges - management	Yes	Yes	PV £2.3m
	Other car charge/costs	No
Public Transport	Bus fares	No
	Rail fares	No
	Rapid transit fares	No
	Mode shift between public transport modes due to change in supply	No
	Ticket / interchange discounts	Yes	No	11m journeys per annum affected. Typical cost penalty 80p/trip.
	Concessionary fares	Yes	No	16m journey per annum affected. Typical cost £1.50 per trip.
	Other public transport charges/costs	No
Non-motorised Modes	Walking costs (in the vast majority of cases, nil)	No
	Cycling costs	No

Quantification of impacts

3.2.3 Monetary ('out of pocket') costs are often simplified within transport models. In particular the complexities of discount fares, concessionary fares, season tickets, and stage/fare boundaries often have to be simplified for modelling purposes. Likewise for the highway network, many models do not include parking charges at some car parks and rarely take account of nuances such as variation in charge by time of day or availability of season tickets. Only where impacts are fully captured in TUBA, should this tool be used in isolation for the assessment of personal affordability impacts. This is addressed in the following section.

3.2.4 In the majority of cases, the quantification of impacts will be limited to an indicative assessment of the number of people affected by a cost change, and the typical magnitude of that cost change.

3.2.5 It is first necessary to understand the likely per-trip change in the cost of travel. Taking the example of replacing bus services where free concessionary travel is available with an alternative mode where they are not, the change in cost will be the average fare charged on the new system in the affected area.

3.2.6 Having determined the size of the per-trip impact, it is necessary to determine the number of people likely to be affected.

3.2.7 In many cases, a dataset may be available that can allow direct quantification: data on the number of trips made on concession passes within the affected area is likely to be available from the local administering authority. Where such data are not available, it should be possible to make an estimate using demographic data to determine the population in each SOA in the affected area that are in the particular social group affected by the change. For example, for a change in the concessionary fares regime, the number of people could be estimated as the number of people in the relevant age range in the affected area.

3.2.8 The results from both methods of quantification feed through to the Personal Affordability worksheet, described in the next Section.

TUBA Analysis

3.2.9 Where a specific affordability impact is fully captured by the transport model, TUBA can be used to provide an estimate of impacts in an extension of the User Benefit SDI analysis, which isolates the specific element of User Benefits relating to User Charges, and is described in Chapter 7 of TAG Unit 3.5.3.

3.2.10 The output from this process will be a distributional analysis of User Charge impacts of the format shown in the table below.

Table 2 - Example Output from User Charge Distributional Analysis

£m	IMD Income Domain
	Most deprived areas		↔	Least deprived areas
	0 - 20%	20% - 40%	40% - 60%	60% - 80%	80% - 100%	Total
SOA 1	3.6					3.6
SOA 2				4.2		4.2
SOA 3					1.2	1.2
...
SOA N		2.3
Total	40.2	57.8	37.9	77.8	59.8	273.5
	15%	21%	14%	28%	22%	100%
Share of Pop'n	22%	25%	15%	28%	10%	100%
Assessment	✓	✓	✓✓	✓✓	✓✓✓	✓✓

3.2.11 This table is identical in format to that used to report the distribution of User Benefits, but is restricted in this case to a particular type of User Charge. Separate tables should be generated for charges relating to different modes, to enable these to be reported separately in the Personal Affordability Worksheet. The Table(s) can be used identify if the distribution of user charge changes relative to the population distribution, thereby identifying and disproportionate impacts by income segment.

Report to the Project Manager

3.2.12 As already noted, Personal Affordability impacts tend to be indirect effects of transport interventions. As such, many of the impacts, especially the adverse impacts, will be to some extent unintentional.

3.2.13 It is therefore important that the analyst discusses any significant affordability issues that the analysis identifies, so that the project manager can seek means to mitigate these issues where they are considered undesirable.

3.3 Outputs from Appraisal (Step 5)

3.3.1 The output from the process is created through the Personal Affordability Worksheet, an example of which is provided as an appendix.

3.3.2 This summarises different affordability impacts by mode against the checklist, both at an overall level, and in particular geographic areas. To consider the impact, these geographic areas are identified in terms of their IMD income domain score. The purpose of this analysis is to identify those areas where there is low average income, and therefore greater vulnerability from the impacts of price rises.

3.3.3 The 'wider areas' column provides scope for specific qualitative comments to be made, such as possible mitigation measures.

3.3.4 As previously mentioned, the final column is used to identify where these changes in the price of travel that individuals must pay have been included in TUBA User Benefit appraisal. Where possible, the monetary impact of the change should be estimated, so that if not included in the TUBA analysis, appropriate adjustments can be made to include the effect.

3.3.5 Case study work has identified the complexities around generalised cost behavioural issues. Apart from those models required to consider income disaggregation (those including road user charging proposals) many models will not segment by income but other segmentations. In these cases generalised cost models (considering both time and money) will minimise overall generalised costs but this could result in higher monetary costs. TUBA analysis may then show a larger monetary cost impact for low income users who could use lower monetary cost routes being less concerned with minimising overall generalised costs. A fully income segmented model would avoid this but may not be proportional in resource terms.

3.3.6 The assessment of Personal Affordability also needs to be mindful of the fact that whilst infrastructure and service performance may well be relatively tightly defined during the development of options, charging regimes for transport services are generally not committed in advance and are largely set by the commercial market, in particular for non-rail based public transport services outside London. There can therefore be a risk that distributional issues could emerge following implementation that were not expected during the development process.

3.3.7 However, the SDI appraisal process encourages promoters to consider risks of adverse affordability impacts and identify mitigation measures to reduce the likelihood of these occurring following the completion of an intervention.

3.3.8 The assessment within the Personal Affordability worksheet should be carried out for each of the IMD Income Domain Groups and will be used to inform the analysis passed to the Matrix of Social and Distributional Impacts (step 5 in TAG Unit 3.17).

3.3.9 In determining the grading for the Personal Affordability SDI the analyst will need to make a judgement on the balance on affordability impacts across the travel modes for each of the SOA groups used in the social analysis and for each income group quintile in the distributional analysis. This judgement should take into account magnitude change and modal usage and can be assisted by the User Charge Distributional Analysis generated from TUBA, as shown in the example in Table 2.

3.3.10 The assessment will involve distilling and weighing up a number of impacts identified at the detailed level but the analyst should consider whether impacts are widespread or more limited within the social or IMD Income Domain group. For example, car park charging may affect all road users accessing a town centre, whereas integrated ticketing discounts on the bus network could offer benefits to significantly fewer users.

3.3.11 The grading of the overall impacts should be allocated to a standard seven point scale, as set out in Unit 3.17, translated into the Personal Affordability worksheet with up to three ticks or crosses as appropriate.

3.3.12 The scores for each of the groups under consideration should then be reported in the matrix of social and distributional impacts, described in Step 5 of Social and Distributional Impacts of Transport Interventions (TAG Unit 3.17).

3.3.13 In some limited circumstances, for example major mixed mode packages involving both investment and charging proposals, it may be appropriate for both major adverse and beneficial impacts to be identified and taken forward to the Matrix of Social and Distributional Impacts. In this case, a qualitative commentary should be added to explain the basis for the scoring.

4. Further Information

The following documents provide information that follows on directly from the key topics covered in this Unit.

For information on:	See:	TAG Unit number:
The background and overall approach to the Social and Distributional Impacts of transport interventions	Social and Distributional Impacts of Transport Interventions	Unit 3.17

5. References

Highways Agency Design Manual for Roads and Bridges (DMRB)

ODPM (previously DETR) Regional Planning Guidance, Planning Policy Guidance Note 11 (PPG11)

Social Exclusion Unit (February 2003) Making the Connections: Final Report on Transport and Social Exclusion

Atkins and MVA (Forthcoming) Assessing Social and Distributional Impacts in Transport Intervention Appraisal

6. Document Provenance

This Transport Analysis Guidance (TAG) Unit is based on research undertaken by DfT on the social and distributional impacts of transport interventions.

The guidance was originally released FOR CONSULTATION in September 2009 and IN DRAFT in January 2010. A few minor deletions were made in February 2011.

Technical queries and comments on this TAG Unit should be referred to:

Integrated Transport Economics and Appraisal (ITEA) Division
Department for Transport
Zone 3/04, Great Minster House
33 Horseferry Road
London SW1P 4DR

Email: itea@dft.gsi.gov.uk
Tel: 020 7944 6176
Fax: 020 7944 2198

Updated: April 2011