The Welsh Conservative Party said in a post on X: “The default 20mph limit will cost the Welsh economy up to £9bn.
“The FM (First Minister) denies this, but it’s in her own government’s explanatory memorandum.”
A screenshot of a document with the figure £8.9 billion circled in red is then shown in an attached video.
Evaluation
A Welsh Government document from 2022 says the cost of longer journeys for businesses and the general public is estimated at £6.4 billion across 30 years.
However, it adds there is “significant uncertainty” around this figure, adding it could range from £2.7 billion to £8.9 billion – the latter is the figure highlighted by the Welsh Conservatives’ post.
The report also points out potential benefits from the policy. Including these benefits, the estimated cost of the policy is said to be £4.5 billion across 30 years.
The facts
What is the policy?
The Restricted Roads Order 2022 made 20 miles per hour the default limit for restricted roads in Wales, which are usually in residential and built-up areas. The speed limit on these roads was 30mph until the legislation came into force in September 2023.
The Welsh Government said the change was made to reduce the number of collisions, encourage people to walk and cycle, improve health and make streets safer.
What does the explanatory memorandum say?
The explanatory memorandum for the legislation was published in June 2022, laying out the estimated cost of changing the default speed limit and the wider economic benefits over 30 years, from 2023 to 2052.
The direct financial cost to the Government was estimated at about £33 million, including £29 million that would be spent in 2022 and 2023 on implementing the new policy.
The document also stated the policy could create “substantial” wider economic benefits with improved road safety bringing benefits worth £1.4 billion and environmental and health benefits worth £0.5 billion.
However, the impact on the wider economy was expected to be largely negative because of increased journey times for businesses and households. The assessment estimated this would cost £6.4 billion across 30 years.
It added there was “significant uncertainty” about the cost of this so-called disbenefit, with it possibly ranging from £2.7 billion to £8.9 billion – the latter being the figure highlighted by the Welsh Conservatives’ social media post.
The report also notes the majority of this cost was likely to be from adding less than two minutes to journeys.
What is the total cost of the policy over 30 years?
The final page of the explanatory memorandum breaks down the impact of the policy by the sectors that will bear the cost and benefits.
It estimates the Welsh Government will pay £32.5 million in direct costs (for monitoring, support for local authorities and staffing), but will benefit by £57 million due to improved road safety. Overall, the Government will gain about £25 million.
Local authority costs for signage, traffic regulation orders and staffing will be outweighed by the Government grants they receive, resulting in no direct costs. The report also shows no wider economic benefit for local authorities.
The business sector will only feel a negative impact if longer journey times affect productivity (for example delivery drivers), at an estimated cost of £1.6 billion.
The general public was expected to see many economic benefits, with savings including some £1.3 billion from improved road safety; £505 million from the impact increased cycling and walking would have on health and the environment; and £4 million from reduced emissions.
However, these are significantly outweighed by the expected loss of £4.7 billion due to time lost from longer journey times. As a result, the policy is expected to cost the general public about £2.9 billion.
Overall, the policy will cost £4.5 billion over three decades when combining the cost and benefits across the Government, local authorities, businesses and general public. The costs and benefits are calculated in 2022 prices.
Research on the impact of the policy is ongoing by Transport for Wales.
The links
Post on X (archived post and video)
Gov.wales – Introducing default 20mph speed limits (archived)
Senedd.wales – Explanatory Memorandum to the Restricted Roads Order 2022 (archived)
Transport for Wales – Default 20mph Speed Limit on Restricted Roads (archived)
