Agenda item
Overview of Highways Contracts
- Meeting of Highways and Growth Select Committee, Thursday, 18 October 2018 10.00 am (Item 7.)
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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:
-
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.
-
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.
- 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.
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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.
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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.
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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.
-
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
- 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.
-
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.
-
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.
- 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.
-
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.
-
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.
-
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.
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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.
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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.
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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:
- 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.
- 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.
- 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.
- 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:
- Overview of Highways Contract Cover Report, item 7. PDF 95 KB
- HGSC Report Oct 18 (Highways Contract) - Annex A, item 7. PDF 57 KB
- H&G Select Committee - Highways Contract Presentation final, item 7. PDF 533 KB