Evaluating the costs of incidents from the public sector perspective

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 this report, which also breaks down the cost of road deaths by different government departments 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.