Report of the Cabinet Member for Highways and Transport.
Minutes:
The Cabinet Member for Highways and Transport provided operational performance information on two long-term highway service delivery contracts: Infrastructure+ and Streetlighting Private Finance Initiative (PFI); and invited direction on future or additional performance measures necessary to demonstrate these contracts are achieving their required aims.
By way of background, members were reminded that Infrastructure+ is an overarching agreement between the County Council and Amey LG providing an outcome focused approach to the delivery of highway and non-property infrastructure services across Staffordshire. A core element of the Infrastructure+ partnership is a Term Service Contract (TSC) for the maintenance, management and improvement of over 6,300kms of highway network.
Infrastructure+ operational performance is managed through a balanced scorecard process. At the last meeting of the Strategic Partnership Board in July 2020, operational performance was scored as +23 on a range of +/-58 and accepted as satisfactory taking into consideration the funding constraints particularly around highway maintenance.
As part of the 2020-21 Infrastructure+ Business Plan the Strategic Partnership Board agreed some improvement plan priorities which were accompanied by an Extra Investment Strategy. The local road network is the council’s single largest physical asset with a gross replacement value of over £7billion. The Government’s own endorsed Asset Management approach to highway maintenance recognised that a highway network the size of Staffordshire’s required a one-off investment of around £75m to bring it up to target condition followed by £42m/year ongoing to achieve ‘steady-state’ condition in carriageway condition alone.
The £26m available revenue budget (approximately 5% of the Councils total annual revenue budget) services commitments including the streetlighting PFI, school crossing patrols and a range of statutory functions. Approximately £10m (2% of the Council’s annual revenue budget) remains for highway maintenance operations. The extra £20m investment strategy approved by Cabinet in 2017 provided an additional £5m/year over 4-years to reduce the backlog and associated reputational and financial liability of long standing pothole defects. Levels of public satisfaction measured through the NHT survey have started to see improvement in some aspects of highway maintenance associated with this extra investment.
In May 2003 Lighting for Staffordshire Ltd commenced delivery of the street lighting Private Finance Initiative (PFI) contract which would operate for a period of 25 years. The value of the contract at its commencement was £250m and the Council has received revenue support grant of £1.54m per annum to support delivery of the contract. The primary reason for the PFI had been to redress a continued lack of investment in street lighting assets. The Staffordshire contract constituted a continuous programme of asset renewal throughout the contract period.
Since the contract commenced back in 2003 the number of street lighting assets on the highway network has risen from 99,343 to 108,626 (June 2020), a growth of 9.3%. Following the credit crunch high value contracts such as the Street Lighting PFI contract were re-assessed for their value and to ascertain if costs could be reduced. Officers entered into negotiations with the PFI contractor with a view to achieving increased value against the requirements of the contract. A Contract Modernisation exercise was completed in December 2012, with additional savings being recovered by the council over the residual life of the contract.
In terms of contract modernisation, converting the energy savings per annum to a fiscal value generated savings of £2.3m over the period April 2013 to June 2020. The total savings to the end of June 2020 because of contract modernisation is £4.5m.
As part of Contract Modernisation the core specification was amended so the authority could benefit from the rapidly advancing LED street lighting market. To implement LED invest to save initiative required formal agreement with the PFI Contractor (Lighting for Staffordshire Ltd). Unfortunately, this process had taken longer than originally anticipated due to the need to embed the arrangement within the PFI contract. The current status of the contractual change requirements was approaching completion and works were planned to commence Nov / Dec 2020 against a 4-year delivery programme.
The Cabinet Member maintained that the PFI contract demonstrated a high level of public satisfaction.
The Chairman drew members attention to the Strategic Partnership Boards identified improvement-plan priorities. He was surprised to see many initiatives which he would have thought were already being done, indeed, thoroughly embedded and refined (for example, ‘to develop and implement a Communication strategy, roadmap and delivery plan).
The Assistant Director for Highways and the Built County explained that as part of the annual business planning process the Infrastructure+ Strategic Partnership Board approved an annual plan of continuous improvement priorities that could be resourced – some aspects are new and others are updates.
Another part of the annual business plan is the forward delivery programmes. Whilst a Highway Infrastructure Asset Management Plan exists the level of future funding is not known at this time making works programming and projected road condition difficult. It also undermines market confidence to invest in Research and Development to support innovative new materials and techniques.
A Member raised the matter of the closure of call centre lines and what had been the impact of this. In Tamworth, training on smart phones had enabled residents to report live issues. The Cabinet Member did not have statistics but was aware people were concerned and wanted a conduit to report. Officers were looking for a cost-effective solution and hoped to be in a position to report to the next meeting.
A Member asked what the Cabinet Member had planned to improve cycle and walking routes as part of the green agenda. The Cabinet Member explained that details are set out in the Council’s Local Walking and Cycling Infrastructure Plan (LCWIP). He also explained that he had only recently put a paper to Cabinet requesting an additional £2m in-year funding for Community highway maintenance priorities and upkeep of the Public Rights of Way Network. In conjunction with Amey, District and Borough Councils will be asked to support opportunities to work in partnership to improve the condition of cycle and pedestrian routes. Furthermore, an additional £0.1m had been allocated to improve public rights of way.
This was welcomed by members as a necessary boost to highways funding and hoped to see the backlog of outstanding work reduced. The Assistant Director for Highways and the Built County maintained that the new permit scheme introduced from April 2020 worked in the County Councils favour. Under the previous regime, the utility sector had a given right to access to the highway network but under the permit scheme they had to apply for access and so the service could be more planned. Furthermore, they had to pay for the permit which contributed towards the cost of supervisory work, including duration and quality of the reinstatement.
A Member asked about the distinction between urban and rural grass cutting contracts. The Assistant Director explained that there were two separate specifications: in rural areas to support ecology, only 1m swathe cut is made once or twice each year, with further enhancements at visibility splays as required. In urban areas (speed limit of 40-mph or lowers) where there is more amenity value there were 6 cuts (previously 8). He acknowledged that some Borough, District and Parish Councils that delivery highway grass cutting for the County Council also undertake some additional amenity work. Rural cutting accounted for about one quarter of the spend compared to urban cutting. Some members had encountered specific issues with the grass cutting contractor in their locality which they would take up outside of the meeting.
A Member asked about satisfaction rates and contact numbers for roadworks. The Assistant Director stated that all incidents of roadworks should include an information sign providing contact details of the works promoter. In the case of highway maintenance work this will be the County Councils own 24-hour contact number.
The Chairman suggested there was some disparity between performance which appeared to be improving across key criteria whilst satisfaction rates did not necessarily reflect that. The Assistant Director explained that the customer satisfaction data was obtained from a national annual public satisfaction survey conducted by Mori and as such there is a lag effect. He hoped to see continued improvement and satisfaction rates would follow through. The service did consider customer satisfaction in prioritising service direction.
Regarding the Street lighting PFI item and the LED invest to save project, an interest free loan of £8.8m towards the replacement of traditional lanterns with LEDs will generate £1.6m financial savings and 2,600 tonnes of CO2 emissions each year. The Chairman asked about the cost of borrowing and for assurance that due diligence had ensured the spend represented good value for money. The Cabinet Member assured the select committee. Members asked to be advised when LEDs would be installed in their area.
RESOLVED: That the report on operational performance information on two long-term highway service delivery contracts: Infrastructure+ and Streetlighting Private Finance Initiative (PFI) be noted and that the Assistant Director for Highways and the Built County share location specific information regarding the roll out of LED street lighting.
Supporting documents: