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This section provides information, processes and procedures to assist Approved Organisations and the Transport Agency in using the Transport Agency’s Investment Assessment Framework (IAF) to assess and prioritise programmes, plans, projects and other activities.

The framework and priorities will be used by the Transport Agency in developing the National Land Transport Programme (NLTP) and to make subsequent investment decisions.

Links to detailed guidance will be found toward the bottom of this page.

Investment Assessment Framework

The Government Policy Statement(external link) on Land Transport (GPS) establishes the government investment strategy, defining the results desired from National Land Transport Fund (NLTF) investment. Developing the IAF is the Transport Agency’s first step in operationalising the GPS to enable the Agency to give effect to the GPS. The principles and high level criteria of the IAF are approved by the Transport Agency Board.

The IAF uses three factors (strategic fit, effectiveness, and benefit and cost appraisal) to determine how well proposed activities meet the government’s investment strategy as defined in the GPS.

The Transport Agency refers to a number of tools that support assessment, e.g. the Economic Evaluation Manual. These relate to achieving GPS results, as well as demonstrating good process and efficient allocation of resource or effort.

Value for money

When evaluating programmes and projects, the GPS requires Approved Organisations and the Transport Agency to consider best value for money.

Value for money has been defined in a variety of ways. In general, it means:

  • selecting the right things to do (strategic fit),
  • implementing them in the right way (effectiveness),
  • at the right time and for the right price (benefit and cost appraisal).

This requires taking a long-term, whole of life view of the total value for money attributable to a programme or activity, not just the initial capital cost. A whole-of-life assessment will consider:

  • the social, environmental, cultural and economic impact of outputs
  • on-going maintenance and operation costs of the asset or service, and
  • costs associated with disposal and renewal.

The Transport Agency uses the IAF to assist it achieve value for money in selecting the right investments, as it:

  • assesses the contribution that programmes and activities make against the results sought by the GPS and wider purpose of the LTMA,
  • provides a consistent means of comparing and prioritising land transport activities based on their relative contributions to results
  • takes into account the strategic potential offering of proposed activities and considers the effectiveness and benefits and costs of solutions in a balanced way
  • when assessing an activity’s readiness to proceed, a number of criteria are considered that can impact on value for money, including project management and delivery, consultation, peer review and audit, risk assessment (consent, designation, environment, land, engineering, contracting, etc) and management
  • the further components of enhancing value for money (implementation in the right way for the right price) are addressed by the Transport Agency’s procurement policies and procedures(external link).


 Assessment using the IAF involves rating programmes, projects or other activities across three factors, being the:

  • strategic fit of the problem, issue or opportunity identified through the business case and alignment with the GPS results
  • effectiveness of the proposed solution, consistency with business case, and how well it delivers on the outcome identified in the strategic fit assessment
  • benefit and cost appraisal of the proposed solution, assessing the whole of life benefits and costs based on Economic Evaluation Manual procedures or comparative cost effectiveness and performance benchmarking measures.

A priority order is assigned to activities using each of the three factors:

  1. Strategic fit and Effectiveness, are gateways for activity development
  2. Benefit and cost appraisal, determines final prioritisation

Each factor can be assessed as "low', "medium" or "High".  As a rule, only proposals assessed with at least a medium strategic fit and medium effectiveness will progress to prioritisation for inclusion in the NTLP. Proposals assessed as having low strategic fit remain at the strategic business case stage and proposals assessed as having low effectiveness do not progress beyond programme business case. 

The three factors are combined into an assessment profile that applies to specific projects and programmes, e.g. HM2.5 denotes an activity with high strategic fit, medium effectiveness and a benefit-cost ratio of 2.6. 

Reviewing and updating the assessed profile

The assessment profile assigned to individual activities must be reviewed at each stage of the activity's development and updated as necessary to reflect the latest information and any changed circumstances.

An activity’s profile assessed at the time of NLTP inclusion must be confirmed prior to any investment and funding decision. This may result in a reduced profile if the Transport Agency considers the evidence to be insufficient or that the risks around delivery of the activity’s outcomes are too high.

Requirement to use the framework

The Transport Agency requires all Approved Organisations and Transport Agency groups to use the IAF to assess activities and combinations of activities they propose for inclusion in the NLTP.

Regional Transport Committees (RTCs) may choose to prioritise the activities in their Regional Land Transport Plans (RLTPs) in any way they may determine. However, if RTCs use the IAF to prioritise activities proposed for NLTF funding in their RLTPs, this provides greater consistency with GPS results.

RLTPs are also required to include all other regionally significant expenditure on land transport activities to be funded from sources other than the NLTF. We encourage RTCs to apply the same assessment to these other activities to assist in the overall transparency and integrated planning of all land transport activity.