New formula calculates cost of individual road deaths

12.00 | 12 October 2016 | | 1 comment

IAM RoadSmart has produced a new formula for calculating the financial cost to the public purse associated with individual road deaths.

The IAM RoadSmart formula even calculates a specific cost for different road user types. For example, the public purse cost attributed to the death of a young driver is put at £1.1m, while for older drivers the sum is just £10,000.

IAM RoadSmart says this is the first attempt to update the formula for death and injury cost figures since the 1990s. 

The new formula is a key element of a report published today (12 Oct), titled ‘Evaluating the costs of incidents from the public sector perspective’. 

The report also breaks down the cost of road deaths by different government department in a bid to ‘facilitate a discussion beyond the DfT, with the aim of developing focused policy actions based on the savings government departments could make by prioritising road safety in their day-to-day work’.

At present the widely quoted figure associated with a road fatality is £1.7m, with the total costs of all incidents estimated at £35bn in 2105.

However, IAM RoadSmart says this figure includes a calculation for the ‘human cost’, based on how much those relatives would be willing to pay to avoid the incident. By stripping this out, IAM RoadSmart says the new formula shows ‘exactly which costs fall on the public purse’.  

The calculations in the report include: young drivers – £1.3bn (£1.1m per fatality); motorcyclists – £1.1bn (£800k per fatality); people driving for work – £702m (£700k per fatality); and older drivers – £63m (£10k per fatality).

Breaking this down to individual government departments, the report suggests that ‘reducing young driver crashes completely’ could produce annual savings of £227m for the Department for Work and Pensions (DWP), while NHS and police costs would be cut by £241m. 

Similarly, for motorcyclists, the report says the DWP savings are up to £219m and NHS and police costs could fall by up to £162m.  

Sarah Sillars, IAM RoadSmart chief executive officer, said: “These are huge savings and against a background of austerity and public spending cuts this report shows what could be achieved by reducing the numbers of deaths and serious injuries suffered by these at-risk road users. 

“When it comes to road safety the DfT tends to be seen as the main provider of solutions, but the costs of these tragic incidents are felt right across government, not least within  the NHS, Department of Work and Pensions and the Home Office. 

“More cross-departmental working, pooling of resources and sharing of knowledge is key to ensuring joined up thinking on road safety.”



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    I think this is a great tool to demonstrate the effect of road casualties on the public purse across different departments and gives rise to plenty of questions around unintended consequences of budget cuts to specific areas.

    However, in terms of top-level policy setting there is a danger that the removal of the ‘human cost’ element used in the ‘willingness to pay’ approach is actually a step backwards in terms of quantifying the social burden of road casualties.

    Matt Staton, Cambridgeshire
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