Councillors and committees

Agenda item

Overview of Highways Contracts

Purpose of report: To provide members with an overview of the current contract arrangements across Highway services and improvements made to date.  The report will also outline the Service’s journey towards retendering when the current contracts come to an end many of which do so in April 2021.

 

Annex A to follow.

 

Minutes:

Witnesses:

Paul Wheadon, Business Improvement & Consultancy Team Manager
Lucy Monie, Head of Highways and Transport
Bernard Hodgkinson, General Manager, Kier

Colin Kemp, Lead Cabinet Member for Place

Key points raised in the discussion:

  1. The Lead Cabinet Member for Place explained that the aim of the session was to consider the complexities of the Highways contracts to understand the development of the current contract structure, with the aim of informing future understanding of the development of the future Highways contracts upon re procurement in 2021.

  2. The Lead Member and Officers provided an overview of the current contract, highlighting the background of the contract, value, scope, functions, high level performance information and improvements to the contract. The representative from Kier explained that Kier had secured an extension to the contract in 2016 with some changes to how the contract was delivered, which had provided some cost savings. It was also explained how the service operated and the hubs that the service utilised to effectively maintain the network.

  3. On behalf of the Committee, the Chairman voiced disappointment that this was the first time the Select Committee members had the opportunity of seeing the presentation slides. It was stressed that, for the Committee is to perform its scrutiny role effectively, it was essential that all notes and presentation material be made available to the Committee in advance for members to have adequate time to prepare questions and comment in an informed manner.

  4. The representative from Kier and the Lead Member noted that the service was undergoing a “managed deterioration” of the network based on current funding levels. It was stressed that this was not an acute problem at present and that the road network quality of Surrey compared favourably to other authorities. Members asked Keir and the Lead Member to provide a comparison of Surrey road quality compared to other authorities to help design how the contract will be designed in future, as well as understand the value for money of the contract and whether there is good return on investment in light of the managed deterioration of the asset.

  5. The representative from Kier noted that the current model was a transparent and open model which allowed for good partnership work. The Officers agreed to supply the key indicators.

  6. Officers highlighted the performance measures and the Key Performance Indicators (KPIs) for the contractor. It was noted that the contractor did measure its own performance, but that Surrey County Council officers audited and monitored the accuracy of these measures. It was noted that, generally, the contractor had performed well against these KPIs. Members did note that there was a low measure of resident satisfaction, which could be improved with better communication with residents regarding disruptions. The Lead Member noted that he had undertaken a significant amount of work on this, but that there was more that could be done to improve resident’s perception. It was also suggested that how the service works to communicate better as part of the new contract needed to be examined and improved for future use in future.

  7. It was explained that there was an increased pressure on performance during the winter months, and that this was taken into account in performance measurements. Members commented that they had no evidence of this and wanted to have a visibility of KPI’s

  8. Officers stressed that performance measures were designed to be open and honest about the performance of the service. The red rated performance measures were discussed and officers noted that this was a snapshot of a specific period, which were in flux.

 

  1. Officers noted that the service held officer led panels, chaired by Surrey County Council Managers, which were utilised to measure the performance of the contractor which fed into the KPI dashboard. It was noted that Surrey County Council officers and Kier managers were both involved in these panels. It was also stressed that these panels looked at the KPIs labelled red and questioned the reasons for performance figures, which has led to continuous improvement of performance by the contractor.

  2. Members questioned whether it was possible to compare the performance figures that were highlighted with other comparable local authorities, and whether the performance of the Surrey system compared favourably with other authorities. Officers and the Lead Member suggested that they could provide some examples of this information to the Committee as part of its update in December.

  3. Members questioned whether there were any penalties for poor performance or overrun of the permit scheme.  It was noted that penalties for poor performance and overrunning works are applied to utility companies as the legislation allows.

 

  1. Officers noted that the Safety Defect service was mostly reactive in its response, rather than preventative. It was explained that this was a requirement to ensure that the road was safe for users. It was also stressed that not all road defects could be resolved, but that the service had to effectively manage risk against cost. It was highlighted that there were dedicated teams that undertook this work.

  2. The representative from Kier highlighted that some innovative preventative solutions were used which worked to deal with defects on local roads. It was stressed that this work was impactful as it had a positive effect for residents and also prolonged the life of the road asset.

  3. Members questioned the life and quality of repairs to the network. Officers stressed that there was an expectancy that repairs would last for two years and that there was monitoring in place to ensure that these were logged and monitored for quality.

  4. Members questioned the changes in value of the contract, from £10-15 million, to approximately £40 million, and asked for a factor analysis which led to these increases, and whether this was considered good value for money. Officers noted that activities had changed which modified the scope, noting that work, such as Project Horizon, had involved significant amounts of additional resource.

  5. Members noted that some minor repairs seemed to be costed highly, through use of fixed rates or day rates, and questioned whether this could be reviewed in any future contract. The Lead Member and officers noted that the cost arrangements and value for money of the safety defect service, had been reviewed and that they were of benefit and a good way of managing risk, but that the service will look at these arrangements for the future contract based on best value.

  6. Members were informed that information regarding the key weaknesses and strengths of the contract in its current format were being analysed, including value for money, and that a follow up on this could be brought to the committee at its meeting in December 2018. The Lead Member noted that he felt that resident’s perception of performance was an area of key concern.

RECOMMENDATIONS:

  1. That the Head of Highways conducts a benchmarking exercise with other comparable local authorities, detailing the state of Surrey Highways in comparison with other local authorities, and provide this as an update in December 2018.
  2. That the Head of Highways provides a monetary comparison of the contract with other comparable LAs to ensure SCC is obtaining Value for Money out of spend.
  3. That the Head of Highways provides a clear visibility of KPI at the December meeting of the current contract Verses the new proposed contract and a bench mark of one or two similar LA to establish value for money for the Surrey Public Purse.
  4. That the Committee establish a Task and Finish Group with the aim of aiding in development of the Highways Contract to be developed for 2021 and that this be included as part of the Highways improvement contract in December 2018.

 

Supporting documents: