Thank you, David, for inviting me to speak to you again today.
It has been two years since I first spoke, and I suspect I am eligible for a long service medal as a Transport Minister still in service after this period.
Today’s conference is a forum to share good practice, and I’m delighted to be here to update you on the Highways Maintenance Efficiency Programme, or HMEP for short.
Highways Maintenance and funding
Well maintained highways are important to the economy and to motorists and residents which this government also recognises.
Despite the current economic situation that we inherited and recognising the ongoing need - some say that there is a historic problem that will take up to a decade to clear - we are providing £3 billion to councils across England for road maintenance between 2011 and 2015.
This is more in cash terms than the previous four years to help deal with the tail of problems inherited from several previous administrations.
That said, I also believe there is significant scope for local authorities to find efficiencies and achieve more from their spending on local roads.
And taxpayers would expect councils to take advantage of opportunities to drive down costs and drive up efficiencies through collaboration, better procurement and other means.
That was why I was pleased to launch HMEP last April, with the aim of helping the sector over the longer-term to maximise returns from investment in highways and reducing costs. As you know, the Department for Transport is supporting this with £6 million in funding.
At its core, HMEP has 3 foundation stones:
- it is by the sector for the sector;
- it offers practical, adaptable approaches; and
- it is firmly results focused.
Let me also be clear - this is not a top-down imposition from the Department for Transport. It is there to provide the support and guidance that you - the highways maintenance community - have said would help.
HMEP centres on a handful of key themes where efficiencies can be made.
- improved management of the local highways assets and delivering better service to the public;
- collaborative working between local authorities and with the private sector;
- smarter procurement, and;
- benchmarking of costs, quality and public satisfaction, to drive continuous improvement.
HMEP will provide practical guidance on highway maintenance efficiencies that will be of interest to all local authorities, supplier organisations and representative bodies. This will be in the form of guidance, case studies and tool kits detailing opportunities for savings in maintenance services. This includes identifying existing good practice that can provide real life examples of efficiency solutions.
The building blocks are now being put in place. I recognise changes won’t happen overnight, but am very pleased that progress is being made. I am also grateful for the input of those of you outside the core group, including many of you here today.
Headlines from HMEP
I turn now to asset management in action, and the Pothole Review.
Potholes are an issue that brings many media stories, mainly - as you will have seen - negative.
You will know that the department allocated £200 million in March 2011 to authorities in England for repairing damage to their road network, in recognition of the severe winter weather at the end of 2010.
This additional funding represented a significant investment in road maintenance at a time of severe fiscal restraint and demonstrates the Coalition Government’s continued commitment to maintain our infrastructure to support motorists and businesses.
I am aware of further requests from councils for additional funding following this winter season, and I have been particularly lobbied by the East of England.
But as was made clear last year, the additional funding was made on an exceptional basis in light of the severe winter weather and the damage it caused to the highway network.
I am however pleased to be able to share with the Conference some of the key emerging findings of the Pothole Review, in advance of the final report to be published next month, which I hope will help you plan your maintenance strategies better for the future.
The main themes of the Review are:
Firstly, that prevention is better than the cure. By this I mean that intervening at the right time will reduce the amount of potholes forming and prevent bigger problems later, and help head off many of the costly insurance claims that local authorities are now facing.
Secondly, we need to do it once and get it right, rather than face continuous bills. Guidance, knowledge and workmanship are the enablers to achieve this.
Thirdly, we need clarity for the public. Local highway authorities need to communicate to their public what is being done, how it is being done and most importantly that it is being done or has been completed. This includes those instances why it appears that nothing is being done.
Finally, effective communication and engagement with local communities is vital. We all know that the condition of local roads is consistently ranked near the top in terms of transport priorities in public opinion surveys. This is why the Review recommends that local highway authorities both monitor public satisfaction with road and footway condition and repair, and ensure clarity and transparency in their approach to repairing potholes.
In addition, the pothole review also refers to utilities and the co-ordination of streetworks. And we are doing our bit here too.
We are rolling out the use of permit schemes to authorities across the country, to boost the control they have in dealing with utility companies. I am clear that we need to cut the bureaucracy associated with this process, removing the need for departmental authorisation and giving authorities the power to manage their own streets.
And the department has now put in place new legislation to allow local authorities to introduce lane rental charging, to further help in the fight against road works congestion.
This will involve utilities and local authority contractors paying up to £2,500 a day where their works take place on the busiest streets at the busiest times. It will provide a clear incentive to complete works at quieter times, and to invest in new disruption-saving techniques.
We announced last Friday 16 March that Transport for London will run the first “pioneer” trial scheme, due to begin in June this year. I should clarify that a condition of being able to launch a trial is that authorities should already be employing permit schemes to manage works on their streets.
The Potholes Review is providing valuable insights and I’d like to congratulate Matthew Lugg who has led this work with the project team, and encourage all of you to look at the report when it is published next month.
It is important that you take on board and consider carefully the principles arising from the review.
Collaborative working and procurement
HMEP recognises the value of more collaborative working - because it provides real opportunities for economies of scale and cost savings, without undermining local sovereignty.
I have mentioned that a number of tools, resources and good practice examples will be made available via HMEP. This includes a collaborative alliances toolkit, based on good practice.
For example, the Midlands Highway Alliance (with a membership of 18 councils) has achieved around £12 million in cost savings over five years.
I am also pleased that other authorities in Yorkshire, South West, North East and North West are also actively considering setting up collaborative highway alliances. I would encourage all parts of the country to consider following this approach, appropriately tailored to local circumstances.
Furthermore, a review of the supply chain to negotiate savings with suppliers without going back through the procurement process is being piloted by the South East Seven highway authorities and the Association of Greater Manchester councils. This is based on models used in the housing supply sector where this delivered up to 10% in savings.
And finally, in London 34 highway authorities currently have over 100 contracts delivering £350 million investment in their highway networks annually. These authorities have joined together and gone out to the marketplace with a shared contract for highway services. This is securing the best market rates and services for highway services, with a target saving of at least 10%, but still allowing choice as each council can chose the services it wants delivered through the contract.
I am sure you will agree that these are savings not to be scoffed at.
There is a huge potential to make real cost savings for your authorities and still provide a first class quality service to residents and other highway users, as shown in some of the examples I’ve mentioned.
Please do continue to take an active interest in the tools and resources coming out of HMEP over the coming months.
We’re all focused on delivering the best possible service as efficiently as possible, and I hope today’s conference helps in that cause.