As part of its response to the Scottish Parliament’s Public Petitions Committee on Argyll First’s Sign for the A83 petition, Transport Scotland included an economic impact analysis it had produced after the landslip that closed the A83 for 12-13 days between 28th October and 10th November 2007.
The analysis was based on this incident in 2007, calculated on 2008 prices and produced in 2009.
For Argyll has been working on the paper to see what it came up with, how and why.
To put the cart before the horse, this document is a very long way from being an economic impact analysis.
It is confined to taking the information available to it, on tap, from automatic traffic counters at given locations; translating this into an estimate of how many journeys were lost, how many diverted – and putting a figure on these for additional fuel costs involved.
The diversion that is the only road access route between Argyll and the populous central belt is estimated by the AA and confirmed by experience to add over an hour to the journey.
The study, curiously, evaluates the impact of the A83 closure at a national level rather than on its impact upon Argyll.
In its limitation to traffic counting, the study is wholly inadequate as an economic impact assessment.
In its national contextualising of the impact of the A83 closure, it avoids the point altogether.
The A83 is the only route in and out of – and right through Argyll down to Campbeltown, from the central belt.
The core issue of its vulnerability to closure through landslides at Rest and Be Thankful is the total economic impact on Argyll and the Isles of the loss of this access.
However, even at a national level, it is the full economic impact on Argyll of A83 closures that is important – not the impact which excludes the specific costs borne in Argyll, as this does.
Or are we to understand that businesses in Argyll and the economic performance of the region are of no national importance?
The papers conclusions
The seven page document, padded with maps and charts, amounts to four pages of text, much of which is either repetitive or base level information. This is no more than two days’ entry level work.
It concludes that 38,000 – 40,000 journeys were disrupted over the period; and that the national economic cost of the closure has been estimated at around £320,000 (at 2008 prices).
It declares that this is likely to be an overestimate.
Looking at the impact of the closure had it taken place in peak season instead of early winter, the study offers the historical traffic count data for the A83, showing that August is the busiest month, with its traffic around 65% higher than at the time of the landslide.
Based on this percentage and assuming that the characteristics of these journeys – in terms of lost journeys and diverted journeys etc – would be similar to those of the journeys affected by the November landslide , the study estimates that the impact of an August landslide would rise to £540,000.
There is nothing else in this study, even at this level of superficiality – nothing showing any substantial research, nothing displaying an awareness of what an economic impact study requires – nothing other than the inflation of the sort of commonsense one gets in a chat over a pint. For example it notes but does not quantify that there will have been some additional traffic on the Cowal ferries during the closure at the Rest. Everyone’s proverbial granny could have told us that – and did.
The major issue is that this study, presented as an economic impact assessment, makes no attempt to consider the impact on businesses of the closure of the A83. Yet this road provides the sole land access from the central belt to the large and sprawling landmass of Argyll.
The indicative examples we cite below of business issues ignored in their totality by Transport Scotland, are not exclusive. There will be many other examples and several other issues.
Hotels and accommodation providers
The study’s failure to consider business impacts includes, of course, those on accommodation providers.
Yet, for example, a major establishment in Inveraray had 80% bookings over the affected period – which shrank to 20% occupancy as visitors were either obstructed or put off by the closure and the very long diversion.
Every accommodation provider from Rest and Be Thankful to the south end of the Mull of Kintyre and on the isles of Gigha, Islay and Jura will have been potentially affected by this closure.
Am indicative study might feasibly and credibly have been made of such businesses in the Inveraray area – the first small town on the Argyll side of the closure.
From first hand evidence, we can attest that Inveraray, reached by the A83, was a ghost town over the closure period. Virtually nothing was coming from the north where the road was closed. Traffic from the south with an imperative to get out of Argyll was diverting at Lochgilphead to take the A816 to Oban, for the A85 into the long haul diversion via Crianlarich and the A82 to Loch Lomond and Glasgow. Only traffic from the small nearby villages of Minard and Furnace was going into Inveraray to divert up Loch Awe on the A819.
Delays in delivery of supplies to businesses, hotels and restaurants itself created additional costs.
For example, during the period in question, The George Hotel in Inveraray had a wedding reception booked in – and inadequate supplies of champagne to serve. The hotel hired Loch Lomond Seaplanes to deliver the champagne to Inveraray pier.
Yes, this was a move made to underline in as public a manner as possible just what the loss of the A83 access was doing to businesses in Argyll – but that message was a true one and sending it cost The George. It was, though, able to deliver the wedding reception the couple had commissioned.
Transport Scotland’s study has not contacted coach tour companies to establish what they did during this A83 closure period.
Inveraray is a common browsing visit for coach tours. Did those tour operators normally bringing their clients to Inveraray before going to overnight in Dalmally or Oban take the A82 detour north, drive past Dalmally and go back south to Inveraray as planned – and then go back north again for their prebooked bednights?
Did they choose to generate and absorb as much additional fuel cost as possible? Or did they simply take their passengers elsewhere before feeding them and putting them to bed?
Either way, there are economic impacts that must be part of what this study purports to be.
Public transport operators – buses
Ironically, Transport Scotland did not consult this service industry sector.
These operators had to continue to provide their scheduled services as best they could, adding on the diversion time, making and paying for additional driver arrangements and absorbing the substantial costs of increased fuel usage.
They could not legally pass on their increased costs in higher passenger fares. There is a regulatory 30 day delay imposed on any rise in fares charged.
But such businesses did not only have to take the pain of additional fuel costs. They saw a drop in passenger numbers – with less revenue to counter the higher costs.
No one travelled during that period who did not absolutely have to travel.
Take the Scottish Citylink route from Campbeltown to Glasgow – a three hour run. Who, by choice, would add an hour each way to a day out?
We have talked to the service operator and discovered that there was indeed a marked decline in passenger numbers on this route during the 12-13 days of the A83 closure in November 2007.
The study did not collect such data not take it into account as an economic impact.
Public transport operators – Islay ferry
The A83 delivers traffic and passengers between Glasgow and the Isle of Islay,via the ferry port at Kennacraig on West Loch Tarbert.
Islay has eight single malt whisky distilleries, major employers in a business with a stellar international profiles and ubstantial haulage needs.
Islay is also a year round visitor destination with a sound and growing tourism sector.
It is inconceivable that the closure of the A83 and the long diversion involved did not have measurable economic impacts on the whisky distilleries, in lost traffic on the CalMac ferries to the island and in lost visitor spend at the other end.
Te Isle of Jura at this time of year is solely dependent on the ferry to neighbouring Islay to deliver supplies and business visits within reach of the little inter-island vehivle and passenger ferry across the Sound of Islay
The Transport Scotland study made no attempt to address or measure any of these impacts.
In the normal economic sense, opportunity cost is, in choosing one option, the cost you pay for what might have been missed opportunities in the option you rejected.
In the case of the closure of the A83, the choice of route is involuntary but still involves a form of opportunity cost that has economic impacts.
With the diversion, the likelihood is that drivers and passengers will get hungry at Tyndrum and spend on refreshments at The Green Welly or The Real Food Cafe – instead of, as they might otherwise have done, at the Oyster Bar or the Tree Shop cafe at Cairndow – or at Brambles, Mr Pia’s, The George or The Argyll in Inveraray.
Transport Scotland did not ask the Tyndrum food providers or the Cairndow and Inveraray ones about any changes to their business volumes in the A83 closure period.
This Transport Scotland ‘economic impact study’ is about as low rent an effort as it gets.
It cannot be used as the basis for any serious understanding of the economic impact within and outwith Argyll of closures of the A83.
It must not be used to support any notion that there is no urgency in implementing a permanent solution to the A83′s vulnerability to landslides at Rest and Be Thankful.
It has not begun to consider the majority of the factors central to such a study.
It presents a figure of £320,000 as the total cost to the nation of the October/November 2007 closure. It declares that this figure is likely to overestimate the actuality.
In the light of the substantial issues listed above, which the study has simply ignored, the reality is that this figure will very substantially underestimate the cost to Argyll (and thence to the nation) of the loss of access provided by this lifeline route.
And if a closure of this road were to happen in the summer season – and with the current prolonged very wet weather, that is in the frame – the economic impact would be profound.
This juvenile and misleading three year old paper was presented – as evidence – to the Scottish Parliament’s’ Public Petitions Committee by one of the major departments of government.
It may have been produced in the regime of the hapless Transport Minister, Stewart Stevenson – undone by snow – but one assumes some responsible senior officer at least read it before submitting it now to the Petitions Committee.
Why was it considered useful to present such a document to the committee?
There are two possibler interpretations here.
Transport Scotland civil servants, on this evidence, don’t know what an economic impact study demands and have no reason to suspect that MSPs know any better?
Alternatively, this study was deliberately and strategically incompetent?
Limiting it to the most superficial impacts possible and setting their evaluation in a national and not an Argyll context allowed Transport Scotland to come up with the footling figure of £320,000 – which in nothing at all in national terms and less than a headline figure in Argyll terms.
This persuades politicians that there is no urgency in spending money on a permanent solution to the vulnerability of this road to Argyll and the Isles – and that the sort of patch-and-make-do contingencies currently proposed are all that is needed.
Which interpretation is more likely to be correct? Who knows. Neither reassures on competence and integrity where we must have it.
What is indisputable is that a full economic impact study would tell a very different story, especially when set against the modest economy of Argyll and the Isles.
What is unarguable is that a permanent solution must be in progress with an early end date by December 2012.
Argyll has had more than enough of this – and of being gulled.
Note: Here is the full text of the ‘economic impact evaluation presented by Transport Scotland to the Scottish Parliament’s Public Petitions Committee: Transport Scotland 02 07 12