Councillors and committees

Agenda item

Overview of the Highways' Core Maintenance Contract

Purpose of the Report: To provide Members with an overview of the performance of the current Core Maintenance contract with Kier Highways, Value for Money assessments of the arrangements and inform the Terms of Reference for a new Task and Finish group that will support and scrutinise the service as it develops a new contract model and specification for 2021 onwards.

 

 

Minutes:

Declarations of Interest:

None

Witnesses:

Paul Wheadon, Business Improvement & Consultancy Team Manager
Lucy Monie, Head of Highways and Transport
Jason Russell, Executive Director of Highways, Transport and Environment

Colin Kemp, Lead Cabinet Member for Place

Key points raised in the discussion:

  1. Members and the Cabinet Member for Place updated the Committee regarding communications that are sent from the Highways Authority and the need for clarity of information sent to Members and to the public. It was explained that officers had agreed to review how the service communicates with Members and ensure that the service continue to improve the way that it communicates.

  2. Members questioned street furniture repair and the responsibility for damage caused by accidents, and noted that there were instances of unrepaired street furniture damage. The Cabinet Member noted that responsibility for some repairs were part of the current contract, but stressed that the primary function was to make any furniture damage safe. It was noted that higher priority furniture would be replaced as a higher priority, but stressed that lower priority repairs may take longer. It was noted that recovery of costs for high priority repairs came from the third party insurance and that these costs were returned to the Highways Authority when successfully claimed.

  3. Members commented that evidence provided suggested that the current contract arrangement was, generally good value for money. Members questioned whether there had been any significant changes that would ensure that a future contract with a similar design framework would not be value for money and where improvements could potentially be made. The Cabinet Member noted that there had been significant renegotiations of the contract during its lifetime which had improved its value of the course of its operation. It was noted by officers that there was also additional scope for incremental improvements, but that the design was fundamentally good value for money.

  4. Officers explained that they had been exploring how the contract had been performing. It was highlighted that they had recently been considering activities undertaken with partners to ascertain their effectiveness, and that they had undertaken benchmarking exercises against other authorities’ performance to determine quality and best value for money. Officers noted that the next stage of the process was to determine how the service could achieve greater value for money in any redesign. Officers offered to share outline graphs and benchmarking against other authorities with the Committee.

  5. Members questioned the disconnect between the resident’s survey perception of the performance of the Highways Authority and the Resident Panel, and why there was a difference in the perception of performance between these two groups. Officers noted that customer assessment measurements were wide and that the panel was a smaller group of interested individuals. It was highlighted that customer satisfaction levels were generally low across all benchmarked authorities, but that satisfaction increased with an understanding and improved communication of how and why work was being undertaken.

  6. Members questioned the financial stability of the current contract holder and questioned whether the Highways Authority had confidence in their capacity to continue delivering the necessary service. Officers noted that there had been a significant reduction in confidence of Public Finance Initiatives (PFI) following the collapse of Carillion, but explained that that Surrey County Council carefully monitor any company contracted and that there were no significant concerns as of December 2018. It was noted that the Council would continue to monitor this as a matter of course.

  7. Members questioned the marketplace for potential new contractors, questioning whether there had been any initial interest in bidding for a redesigned contract. It was also queried what the market situation was. Officers noted that there was significant interest in the contract, noting at least six potential providers had expressed interest, including the current contractor. It was noted that any final interest would be dependent on contract design, but that the service had a good reputation amongst contractors and that it was working to determine what would be attractive to contractors as well as part of its market research.

  8. Members questioned whether it was the Highways Authority or the contractor who made assessment of repair criteria in the current contract and whether this was planned to remain the same in the new contract. Officers noted that defects were, generally, identified by Highways Authority staff, but that these were categorised on a shared system which significantly aided partnership work.

  9. Members stressed that there was a need to balance value for money with performance. Members also asked, to aid with quality assurance, that the committee review the Key Performance Indicators of the new contract on a regular basis.

  10. Members questioned whether there was any possibility for an in house bid to deliver the contract in future. Officers noted that there was a question of service capability to do this, but assured the committee that all potential options would be considered. The Cabinet Member also noted that engaging with a partner to undertake emergency work was more effective due to their increased capability to meet the need.

  11. Members questioned whether there was a potential for the profitability of the contract to decrease if work reduces in future, and whether this would reduce the attractiveness of the contract. The Cabinet Member noted that there were inevitable dips in activity but that this did not adversely affect the viability of the contract.

 

Further information to be provided:

  1. That officers share outline graphs and benchmarking against other authorities with the Committee.

 

Recommendations:

  1. To form a Task and Finish group, as designed in the Terms of Reference to understand the original Highways Maintenance Contract, changes to it, and reasoning behind why these changes were made, to provide an understanding of the context and potentially inform how the service could design the future contract.
  2. To provide input on the contract model to be used.
  3. To provide input on the Key Performance Indicators (KPIs) of the Contract, and how they will be measured and utilised to ensure good performance and value for money.
  4. Develop close working relationships with peer Authorities to maximise the outputs of the contract review

 

Supporting documents: