When it comes to big urban projects, says John Kay, we’re never going to get the forecasting right. The only question worth asking is does the work leave the city in a better state than when it started. Kay’s example is London’s sewer system:
Yet if Bazalgette’s scheme had been subjected to current appraisal procedures, it is hard to imagine that it would have been built. Although the embankments are an amenity of enormous value to London, their construction had many negative consequences. The once magnificent river entrance to Somerset House, for example, now sits forlorn behind a main road. The gardens of the Inns of Court no longer give on to the Thames. Procedural objections would be innumerable and the delays interminable.
The project would also have been subject to the criteria laid down in the modern Treasury’s appraisal process, which requires a careful assessment of benefits over its expected life. Several hundred years I suppose, since the need for sewers seems likely to continue, but these benefits would be discounted at a rate of 3½ per cent a year.The civil servants would have been required to survey the impact of noxious smells on property values. But the principal issue would have been the consequences for health – they would have got this badly wrong, since Victorian physicians overestimated the ill effects of miasma from the atmosphere and underestimated the role of bugs you contract from contaminated water. The statisticians and consultants would have estimated the time saved if hansoms and sedans could make their way to the City along the Embankment rather than through clutter on Fleet Street. They would have struggled to analyse the likely traffic on the underground railway since none had ever been built.
Their estimates would have been completely wrong and irrelevant anyway. The salient fact is that London could never have become a great business and financial capital if its residents felt an urge to vomit every time they went outdoors.