The future of funding for road maintenance
Keynote address on the future of road maintenance including incentives, asset management and funding.
It’s a real pleasure to be here today (7 April 2016).
To give the keynote address on the future of funding for road maintenance.
After all, this is a subject of vital importance to all of us – government, industry, and – above all – everyone who uses our roads.
That importance is why the condition of the local road network is so often in the media.
And it is why even before I was appointed Roads Minister, I received more letters about potholes than about anything else.
And since becoming Roads Minister, I’ve realised my colleagues in Parliament do too.
Given that I’ve become the person they pass all their letters onto for my response.
I don’t mind – that’s why I came into politics: to deal with some of the problems that matter to people’s everyday lives.
And right now, when we’ve just emerged from a winter that the Met Office has said was one of the wettest on record.
Leading to severe flooding and damage to our roads.
Public interest in road maintenance is at its annual highest.
I pay tribute to those who worked to respond to the floods, helping to repair and rebuild damaged infrastructure.
Both over the winter and more recently in response to Storm Katie over the Easter Weekend.
It’s because of the extreme weather we’ve seen that we have agreed to provide a further £180 million so affected authorities can repair the damage to local roads.
However you look at it, £180 million is a lot of money – especially in the context of the still-urgent need to balance the nation’s books.
But even that figure is dwarfed by the quarter of a billion pounds we’re targeting at fixing potholes on the local road network through our Pothole Action Fund.
Enough to repair over 4 million holes by 2021.
Then there is also the £578 million we are making available between now and 2021 to incentivise highways authorities’ performance.
And those figures are just a fraction of the overall total of £6 billion we’ve committed for local highway authorities in England during the same period.
Representing a funding increase of nearly £400 million for local roads maintenance compared to the last Parliament.
And the fact that we have laid out our spending plans 5 years ahead is another clue as to how seriously the government is taking highway maintenance.
We want to provide local highway authorities with funding certainty.
So they can use the cash in the best possible way.
Perhaps identifying preventative maintenance to undertake now that will save them money later.
Sound asset management
That, after all, is what good asset management is all about.
The motto that prevention is better than cure applies to our roads, just as much as anything else.
And as a former Cabinet Member for Finance and Resources for my local council in Harrogate, I understand the pressures authorities are under.
But I also understand that there’s scope for local authorities to improve their approach to maintaining their roads.
To find efficiencies, and to invest money at the right time in these assets’ lifecycles.
I wouldn’t be surprised if most people in the room today could give me stories about how they’ve seen money being spent in ways that are far from ideal.
And I know that of the 150-plus highway authorities in this country, most are doing very similar things in different ways, rather than pooling knowledge and expertise for common gain.
It was painfully evident from the National Audit Office study undertaken in 2014 that many highway authorities did not have an asset management strategy or plan.
Despite the fact that authorities who use such plans see real financial benefits, improved accountability, value for money and customer service.
So that’s why 2 years ago we decided to introduce incentive funding – the £578 million pound pot I mentioned just now.
This money is to be allocated to highways authorities based on their performance.
Authorities that spend money on roads efficiently.
Will be rewarded with extra funds to keep up the good work.
While authorities with a history of inefficiency will receive comparatively less money.
Over time, we expect that all authorities will improve.
By the financial year 2018/19, over a quarter of funding will be allocated on the basis of competition or performance.
I have been pleased that all authorities eligible to apply for incentive funding have submitted self-assessment returns to the department.
You will hear more from Matthew Lugg later today about how we are assessing authorities.
Matthew has worked closely with the Department for Transport and the Highways Maintenance Efficiency Programme Board to put our plans into action.
I express my thanks for his and the board’s contribution.
But what I can announce for the first time today is the results of the incentive funding for 2016/17.
All the authorities that applied will receive some incentive funding.
But I would particularly like to mention what we now know are the 2 top performing highways authorities in the country: Durham and Lincolnshire.
They scored highly against all 22 criteria and they will receive the maximum possible funding.
I would urge other authorities to look closely at how Durham and Lincolnshire are running such an efficient operation.
Where all the other authorities rank and the funding they will receive is to be published on the DfT’s website today.
For those authorities which have not ranked as highly as they’d have liked my officials in the department stand ready to support them in learning from the best.
Indeed, if highways authorities feel that they need someone from the Department for Transport to make the case for proper highways management to elected members in person, we are happy to send one of our experts along.
Please contact the department or me directly if you feel this would be helpful in your area.
And so, in conclusion.
The sector has come a long way over the past few years.
By becoming more efficient.
By adopting better principles of asset management and by working more collaboratively.
Now we want highways authorities and their contractors to keep improving.
To keep learning from one another.
And to make funding go further still.
Places like Durham and Lincolnshire are showing what’s possible.
By following their lead, we’ll have a better road network that better meets the needs of the nation.