Impact evaluation: Cost-effectiveness
Cost of safety impact
Guidance on determining cost effectiveness through cost-benefit analysis is provided by the Office of Rail and Road.
A standard way of presenting cost-effectiveness is to communicate the full cost and the number of averted incidents:
- £100,000 was spent to avert 10 incidents.
This can also be presented as a cost per averted incident:
- £10,000 per averted incident.
Safety value of preventing a trespass incident
A nominal value can be used for safety benefit (where the benefit is a reduction in fatal and non-fatal injuries) of preventing a recorded trespass incident. This value can then be used to estimate the value of safety benefits reported by an impact evaluation and then compared to the cost of the intervention.
The calculation of this value is described as: “A safety value per averted recorded trespass”, i.e. £3,000 per recorded trespass incident. This value may be used to state the safety value of averted incidents. For example, preventing 10 incidents would have a safety value of 10 x £3,000 = £30,000.
This value is an average for all recorded trespass incidents. Some categories of incident may be higher risk such as trespass on lines with a third rail or on high speed lines. The value per averted incidents may be increased or reduced in accordance with the relative risk to life per sub-category of trespass incident.
Including value of reduced schedule 8 costs
There are at least two options.
The reduction in schedule 8 payments can be deducted from the cost of the intervention to give a net cost. For example:
- The net cost of a £100,000 intervention was £40,000 after recording a £60,000 reduction in Schedule 8 payments (£100,000 intervention costs minus £60,000 lower Schedule 8 costs = £40,000 net cost).
- The net cost of averting 10 trespass incidents was £4,000 per incident (£40,000 ÷ 10 = £4,000).
Another option is to state as follows, without presenting a net cost per averted incident:
- Cost of intervention = £100,000;
- Reduction in duration of delays = 1000 fewer minutes of delay;
- Reduction in Schedule 8 payments = -£60,000;
- Reduction in trespass incidents = -10.
How to calculate a safety value per averted recorded trespass
There were around 36,000 TRUST/SMIS incidents recorded by NDFU in the two-year period 2017/18 and 2018/19, excluding suicides, level crossing and cable thefts.
In the same period (2017/18 and 2018/19) the RSSB report 57 mainline accidental trespass deaths, 21 major injuries and 82 minor injuries. GB rail uses a Fatality Weighted Index (FWI). A fatality is weighted as 1, each major injury is weighted as 0.1 of a fatality and each minor injury is weighted as 0.005 of a fatality. This gives a fatality and weighted injury (FWI) value of 59.3 for 2017/18 and 2018/19.
By dividing the FWI by the number of trespass incidents, a FWI per incident is calculated, i.e. (59.3 ÷ 36,000 = 0.00165). This is one accidental fatality (FWI) per 606 trespass incident (TRUST/SMIS combined total).
The ORR also quote a value per life saved of £1.83m (2016 values). This can be multiplied by the FWI per incident to give a safety value per averted trespass incident of £1.83m x 0.00165 = £2,970 (rounded up to £3,000).