The Costs and Benefits of Department for Transport?s Enforcement Activities

The Costs and Benefits of Department for Transport?s Enforcement Activities


M Brown, M Jeffcott, E Gilles-Smith, Halcrow Group Ltd, UK


The paper describes economic research to maximise the economic benefits of the wider transport system through optimisation of enforcement activities.


The UK Department For Transport (DfT) spends over £100m per year on enforcing a variety of laws concerning driver and vehicle licensing, operating standards, vehicle component and type approval and driving standards. The revenue raised from these activities, including such items as license fees and fines, exceeds £140m p.a. The social cost resulting from offences under these laws has been estimated to exceed £500m p.a., largely as a result of accidents involving sub-standard vehicles or unqualified drivers. This represents one of the largest law enforcement operations in the country, as well as being one of the most important drivers of road safety and accident reduction.
DfT?s Driver and Vehicle Operations (DVO) Group is responsible for the administration and enforcement of these laws and it recently commissioned Halcrow to undertake research into the costs and benefits of 21 of its main enforcement activities. The research was particularly focussed on examining how the application of rigorous economic principles could prioritise investment in these various enforcement activities. Economic principles, which under-pin most appraisal methods, are widely accepted to lead to a more efficient and effective allocation of both public and private sector resources. It follows that economics may present a means of optimising investment in enforcement resources and maximising scheme outputs. The ultimate aim was to develop and test a methodology that would provide a firm basis for focussing the investment of enforcement resources in those activities which produced the highest economic returns.
This paper describes the work undertaken by Halcrow, initially in developing a theoretical economic framework for the research and subsequently in applying this to each of the 21 enforcement activities. The paper reports on the development of an economic methodology that allows investment in levels of enforcement within the transport sector to be optimised. An established economic framework is described which incorporates both the social cost of enforcement and that of the damage resulting from offences. As well as accident costs, sources of social damage could include increased vehicle emissions, delays (eg: due to broken down vehicles) and the wider impacts of other criminal offences which those who break some traffic offences are more than three times as likely to have committed. The framework also includes a behavioural model for forecasting levels of offending, based on perceived levels of the certainty and severity of sanctions. This draws upon deterrence theory from other areas of the criminal justice system on which literature has been steadily accumulating for the past 40 years.
The paper summarises the results of case studies involving all 21 of the enforcement activities examined. In each case, the costs and benefits of existing levels of compliance were calculated along with the cost-effectiveness ratio of current enforcement activities. In those cases were sufficient data was available, models were developed which allowed the economic impact to be assessed of varying the level of enforcement. The resultant forecast change in the level of offending provided both the economic and financial rationale for either increasing or decreasing the level of enforcement in each particular area.
Finally, the paper draws a number of policy conclusions, both for enforcement strategy and road safety. The paper argues that much of the required data already exists for the widespread use of enforcement economics in optimising investment in such activities. One of the key implications from the research is that penalties for many of the offences studied are too low ? well below the optimal level. Focussing enforcement resources on particular activities and in some cases, increasing levels of enforcement, could bring about significant reductions in accidents as well as resulting in wider social and economic benefits. Furthermore, increased levels of enforcement can be both more effective and more efficient in reducing accidents than investment in expensive capital programmes.


Association for European Transport