Regeneration benefits

16.  In the past, the Department's policy on regeneration benefits was that there is no clear and agreed methodology for calculating monetary estimates for transport projects, so these benefits should not be included directly in transport scheme appraisals. The estimated impact of a project on an area of regeneration priority should, however, be taken into account as part of the project appraisal. In the case of the Link, the Department decided that monetary estimates should also be included.

17.  In this case, the Housing and Urban Economics Division (HUE) of the Department used a "dual-track" methodology. This employed two different methods to estimate the regeneration impacts of the Link. The Department estimated:

■  The impact of the Link on development values in the main areas affected (King's Cross, Stratford and Ebbsfleet); and,

■  The main regeneration outputs and outcomes associated with the Link and what the Government would have to pay to achieve these by more traditional regeneration funding programmes, such as the Single Regeneration Budget Challenge Fund or through English Partnerships.

18.  The Department estimated the number of jobs it believed the Link would create directly or through development in the regeneration areas through which it passes. This produced an estimate of some 50,000 additional jobs (80,000 gross). These were split between four main areas (Figure 45 shows the percentage of the total estimated in each area).

19.  The Department then estimated the cost of creating this number of jobs through other regeneration programmes, using a range of costs per job associated with these programmes. This gave an estimate of £1,000 million for the Government's "willingness to pay" to create this number of jobs.

20.  One impact of economic growth or development is an increase in the number of trips being made. These trips should already be reflected in the traffic forecasts, so will be reflected in the calculations of increases in passenger's consumer surplus discussed earlier in this appendix. However, the inclusion of a separate figure for regeneration benefits risks double counting of these benefits. For this reason, the Department removed 50 per cent of the estimated regeneration benefits, as most of the benefits to UK residents would already be reflected in the value for money assessment of international passenger benefits. The final figure included in the assessment was therefore £500 million as an estimate of the regeneration impacts of non-UK resident passengers and other local regeneration impacts.