Today (29 October 2013) I am beginning a period of public consultation on the government’s proposals for transforming the Highways Agency into a government-owned company.
At the Spending Round in June, the government announced a transformational investment in our strategic road network worth £28 billion by 2022 and up to £50 billion over the next generation. To ensure efficient and effective delivery of this, the government also set out plans for reforming the way our strategic roads are managed and run in Action for Roads.
We promised to consult later in 2013 on the details of transforming the Highways Agency into a government-owned company, with a long-term framework for roads investment and creating an independent watchdog to ensure that the interests of road users are represented and the company’s performance is subject to effective scrutiny and challenge.
The consultation sets out the government’s detailed proposals for:
- setting up the Highways Agency as a government-owned company, with a licence regime and comprehensive governance framework to ensure the company is properly held to account. This company will remain in public ownership and we will seek to guarantee this through legislation.
- the process through which we expect to set the roads investment strategy (RIS), which will contain a clear performance specification, a guaranteed statement of available funding and a defined funding and investment programme. This will make the company more transparent, and let road users and the public hold it to account for what it has promised to deliver. It will also give confidence to suppliers over investment plans and future funding levels, enabling them to plan ahead, drive down costs and recruit and train the workers needed to deliver the increase in road projects over the coming years.
- establishing a road user watchdog and efficiency monitor, using existing organisations such as Passenger Focus and the Office of Rail Regulation to make use of existing experience and avoid creating unnecessary new bodies. Together, these functions will ensure that the interests of road users are well-represented and given a strong voice in influencing what the company delivers, and that the company’s performance is subject to effective independent scrutiny and challenge.
- transferring the necessary powers and duties to the company in order for it to effectively operate, manage and improve the strategic road network with day-to-day operational freedom and flexibility, by designating the company as the statutory “highways authority” and adjusting other legislation where necessary. This includes ensuring that the company will continue to work in partnership with local authorities, emergency services and others bodies, and safeguarding current protections regarding environmental and safety standards.
The consultation also explains how the terms and conditions of staff will be protected during the transfer. Separately to this, the Highways Agency will continue to work with representatives to keep staff fully informed.
The outcome of this consultation will inform the final model of the new company, and shape the legislation needed to empower the new company, which we plan to introduce in 2014.
The government believes that the proposals set out in this consultation provide the freedom and flexibility for the roads operator to deliver efficiently and effectively without day-to-day interference from central government. At the same time, they put in place sufficient accountability and safeguards to ensure that the roads are run responsibly and in the public interest. It is expected that these reforms will enable cost savings for the taxpayer of at least £2.6 billion over 10 years.
A copy of the consultation document will be placed in the libraries of both Houses.
Related to this consultation, I am today (29 October 2013) also publishing an impact assessment containing analysis of the impacts of these proposed changes.