Agenda item
Overview of the Highways' Core Maintenance Contract
- Meeting of Highways and Growth Select Committee, Thursday, 6 December 2018 10.00 am (Item 16.)
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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:
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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:
- That officers share outline graphs and benchmarking against other authorities with the Committee.
Recommendations:
- 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.
- To provide input on the contract model to be used.
- 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.
- Develop close working relationships with peer Authorities to maximise the outputs of the contract review
Supporting documents:
- HGSC Report Dec 18 (Highways Contract - Kier), item 16. PDF 88 KB
- Annex A KPI description, item 16. PDF 78 KB
- Annex B KPI results, item 16. PDF 40 KB
- Annex C Benchmarking results updated, item 16. PDF 57 KB
- Annex D (HGSC Report Oct 18 (Highways Contract) - Annex (Final), item 16. PDF 58 KB
- Annex E - Highways Maint scoping doc v0.3, item 16. PDF 77 KB