National Roads Maintenance Review Phase 1 Report

D Interim Event Summary

D1 Introduction

An interim event took place on Thursday 23 June 2011 to share emerging findings of Phase 1 of the National Roads Maintenance Review (NRMR) with the wider stakeholder community. This was to ensure the review is shaped and informed by the views of all involved.

Attendees of the event included representatives from COSLA, just over half of Scotland's local authorities, Transport Scotland, Scottish academia, Transport Research Laboratory (TRL); Utility Companies, trunk road Operating Companies; Regional Transport Partnerships; private sector consultants, contractors and industry suppliers; Public-Private Partnerships and voluntary sector organisations^[103]. The event was chaired by Professor Malcolm Horner of Dundee University.

The first session comprised four presentations given by:

Keith Brown MSP, Minister for Housing & Transport - opening remarks;
Cllr. Alison Hay, COSLA Spokesperson on Regeneration & Sustainable Development - remarks on the Review;
Martin McLaughlin (Transport Scotland) & Ewan Wallace (SCOTS), members of the Steering Group for the Review - Context, Scope & Methodology of the NRMR; and
Donald Bell, Project Director, Halcrow - Phase 1 emerging findings.

The second and third sessions of the event comprised four workshops, each representing one of the work streams of the Review. These were preceded by a presentation outlining the areas for discussion covering each working group's scope, evidence base, emerging findings and any gaps or issues for further consideration.

Each attendee had the opportunity to attend two of the four workshops. Sections 2 to 4 below cover the discussions at these workshops.

The final plenary session of the event comprised feedback of the main themes from the workshop discussions followed by a question and answer session to a panel comprised of John Gooday (Scottish Road Works Commissioner), Ewan Wallace, Jim Irons (SOLACE), Kathy Cameron (COSLA), Professor Malcolm Horner, John Bryson (SCOTS), Christine Francis (SCOTS), Martin McLaughlin, Karl Johnston (Transport Scotland) and Donald Bell.

D2 Standards & Prioritisation

The Standards & Prioritisation Workshops were facilitated by Mike Bordiss of the Chartered Institution of Highways and Transportation.

Key topics raised across both workshops included:

Road Asset Management Plans (RAMPs);
Standards;
Longer term contracts / budgets; and
Communication

The following questions were posed at both Standards & Prioritisation workshops and acted as the catalyst for the discussions identified above:

Q. What factors are most important when prioritising spend on assets for the benefit of all road users?
A. The most influential factors identified were short term budgets, political barriers and the industry being too risk averse due to the 'claim culture'.

Q. How should spend be apportioned between different elements of the asset (roads, footways, lighting, signals, etc.)?
A. Assets with the most value to economic growth and sustainability targets, and including the public's priorities were noted most often throughout the workshop discussions.

Q. What, if any, reduction in standards or level of service is acceptable to deliver road maintenance services within reduced budgets?
A. A reduction specifically to those areas that are always granted departures. For example, lighting standards, Chapter 8 and a less rigid interpretation of the maintenance Code of Practice would appear to be welcomed by the industry.

Q. How can we better communicate issues and benefits with the public?
A. Management of customer expectations and more frequent communication was mentioned at the workshops. The backlog should be redefined to reflect a chosen level (which would recognise zero defects are not attainable).

Q. What needs to be done to deliver transformational change?
A. The road maintenance industry needs to be presented positively and there needs to be a move towards roads being viewed as a vital asset rather than a liability.

It was accepted that all roads authorities' RAMPs should continue to be developed. There were discussions around the possibility of individual local authority RAMPs feeding into a single Scottish RAMP, but there were mixed responses to this. It seemed to be generally accepted that RAMPs could address climate change objectives. Many agreed that one key to effective road maintenance is to ensure that the levels of service identified in RAMPs is appropriate and affordable - it was felt that current maintenance priorities are reactive and driven by complaints in order to minimise claims. There were also discussions on utility works and how they fit into RAMPs - for example, should utility companies be required to "buy into" RAMPs?

It was strongly felt that the interpretation and application of some standards / legislation / codes of practice are currently inappropriate in certain circumstances, such as the perception of the Traffic Signs Manual Chapter 8 being more suited to high speed roads, not local slow speed roads.

Issues relating to long term contracts with the private sector and how they could provide benefits were discussed. For example, it was felt by some attendees that with the right financial incentives the maintenance of the Scottish road network could be taken over by the private sector with the expectation that it would be in a better condition when the contract ended than it was when it started. It was generally accepted that if budgets were agreed on a long term basis, it would allow long term planning which would be more efficient than the current short term planning / single-year budgets. An example that was given during the workshop was the Mayor of Amsterdam who recently obtained cross party agreement to allow the implementation of a 10 year budget for roads.

It was felt the industry communicated poorly with the public and that if this changed political decisions could be influenced by industry more effectively. It was believed that politicians are currently prepared to listen due to the last two bad winters, and that the industry should build on this opportunity to generate debate.

D3 Technology and Productivity

The Productivity Workshops were facilitated by Professor Malcolm Horner of the University of Dundee.

The following questions were posed to the workshops. However, discussions were intense and fast paced, which meant that they were not directly answered:

Are there examples from other key sectors that we can learn from, where innovation is supported at the heart of the sector?
What types of structures would be required to support greater access to innovation / access to the market to deliver better outcomes for all road users?
How do successful productivity improvements in the road maintenance sector become more widely adopted?
What needs to be done to deliver transformational change?

Key topics raised across both workshops centred around what currently happens across the following topics and what could be done better:

Research and development;
When road works are carried out;
Appraisal and approval process;
Lean management; and
Communications technology.

Research and development (R&D) was the topic that generated the most discussion. It was mentioned in the workshops that R&D works best when it is undertaken in a collaborative manner - including the client, the research organisation and the industry. It was also a concern that clients and academia tend to commission research to deal with known issues. Therefore it was agreed that the best way forward for dealing with these issues is that a proactive research agenda needs to be identified and coordinated. It was also noted that more use and involvement of the voluntary sector should take place. Incentivisation of innovation was also felt to be critical to the industry - France's Charte d'Innovation was quoted throughout the workshops as a good example and how in Scotland the current risk share balance seems to stifle innovation.

There was significant debate over when roadworks are carried out. Annualised budgets were seen to be largely responsible for works being carried out at the "wrong" time of the year. A good example of overcoming this issue was highlighted - City of Edinburgh Council has moved the approval of its capital works programme to September / October to allow schemes to start on 1 April. It was also agreed within the Workshops that restrictions of working times, for example during peak times, are an issue and that a more standardised strategy around the planning of works would be useful. It was noted that the Scottish Roadworks Register (SRWR) database and system could be used to help co-ordinate works better.

Discussions surrounding the appraisal and approvals process for new products and techniques intertwined with those of R&D. This included the appropriateness of current standards, current risk sharing models not being appropriate, the need for better targeting of approach and a quicker process for introducing new technology and the need for more young engineers to be involved were all highlighted as being necessary for change in the appraisal and approval process. Standards were also discussed and again noted as being too prescriptive and detailed and should perhaps be stripped back to allow professional engineering judgement to take precedence.

Throughout the workshops the view was expressed that "Lean" management should be applied to the road maintenance industry including across the full supply chain. It was noted that as a result of the tendency to work from October to March and at night time that the industry is not efficient. Many of the workshop attendees argued that if work could be programmed to be undertaken during the summer months (lighter nights / warmer nights) that this would be better.

A key issue raised under the brief discussions on the communications technology topic was that communication with all parties (including industry, politicians and the public) needs to be more effective. It was agreed that mobile phone technology offered opportunities to improve communication in the future.

D4 Resourcing

The Resourcing Workshops were facilitated by Dr. Emma Langham.

The following questions were posed to the workshops:

What scope is there for different delivery models to maximise efficiencies whilst maintaining quality maintenance services?
How can we utilise procurement or contract mechanisms to drive savings and benefits for all road users?
What are the barriers to more shared services and collaboration and how might these be overcome?
Are there alternative, or new, funding models which could be applied in this area to either deliver access to new streams of funding or to create better value for money than traditional funding methods?
What needs to be done to deliver transformational change?

The programme for each of the resourcing workshops was to have attendees answer each of the above. This was done by discussing topics under each question and then scoring the issues discussed by using green or red stickers - green indicated support / preference for the idea, red indicated disagreement with the issue / idea.

Q. What scope is there for different delivery models to maximise efficiencies whilst maintaining quality maintenance services?
Answers
The point most agreed with under this question was that there is a need for revenue funded road maintenance with much more consistency in funding levels.
An increase use of shared services was not opposed.
Views were equally divided amongst the workshop attendees about the idea of local authorities outsourcing their maintenance activities.
There was also a mixed response to the use of PFI contracts - the majority were opposed to the idea however.
The majority also opposed idea was that of increasing the use of 'externalising' service contracts to the private sector.

Q. How can we utilise procurement or contract mechanisms to drive savings and benefits for all road users?
Answers
Outcome based contracts and longer term contracts to maximise efficiencies and justify set up costs were strongly supported by the workshops.
The idea of using contract mechanisms for more use in sustainable techniques / products was not opposed and a small number were supportive of the idea.
The idea that Scotland Excel could be utilised more widely was not supported.

Q. What are the barriers to more shared services and collaboration and how might these be overcome?
Answers
It was strongly accepted in the workshops that political barriers and local priorities currently stand in the way of increased collaboration / shared services.
Some agreed that legislation was also a barrier.
It was strongly rejected that fears of change, job cuts, TUPE and loss of pension rights were a barrier.

Q. Are there alternative, or new, funding models which could be applied in this area to either deliver access to new streams of funding or to create better value for money than traditional funding methods?
Answers
The idea of ring-fencing and more flexibility on annualised budgets was strongly supported.
The idea of charging utility companies for road occupation and failures was opposed by some, but the majority of attendees supported the concept.
There was an equally mixed view among attendees at the idea of congestion charging in the first session. However in the second, there was wide opposition to road tolls and £ / mile and road fund licence as a funding mechanism.
PFI and private sponsorship of asset management was strongly opposed.
TIF models faced a small level of opposition.
Collaborative funding (i.e. less than the current 33 separate budgets) was supported a small number of attendees.

Q. What needs to be done to deliver transformational change?
Answer
The general feeling was that change is already happening through this review and the industry now has politicians' attention. However it was strongly agreed that real political will combined with strong leadership is what is needed for transformation change. It was not thought that public acceptance was vital for change.

D5 Wider Economic Issues, Impacts, Cost and Benefits

The Wider Economic Issues, Impacts, Cost and Benefits workshop sessions were facilitated by Professor Iain Docherty (University of Glasgow).

The following questions were posed to the workshops:

What is 'road maintenance' and why is it important?
Who is it important to?
Who suffers first and most when it goes wrong?
What is the rationale for the above and is there supporting evidence?
What should we prioritise?
Who are the different interest groups and how should we balance the needs of the different groups?

After the workshop, the following points were presented to the plenary session by Professor Docherty:

Are we having a good crisis?
- No consensus
- Whose standards?
- Prepared to let standards fall?
- Taxation / hypothecation
- Democratic failure?
- Those who cause damage pay
- No clear evidence re outcomes
- More funding

D6 Post Event Feedback

All attendees of the event were invited to provide post event feedback. The relevant feedback has been collated in the following table and is presented in a non-attributable format. The views given are those of the contributors.

Table D.1: Post Event Feedback
Event Feedback
Comments provided from stakeholder as follows.
General
We all know that freight transport does the major damage to our road networks and so it follows that if we could encourage/ subsidise the transfer of more freight from road to rail our roads would suffer considerably less damage and the investment we make with the limited money available would last longer. There have been successful initiatives in this regard but can more be done in the present economic climate? If the cost of subsidising the transfer of freight from road to rail was to be more than what would be gained from reducing damage/ extending the life of maintenance and improvement investments then clearly it would be a non-starter. Some work will have been done somewhere on a cost/ benefit model.
One thing that seemed to be mentioned a lot was that reduced budgets would necessarily mean lowering of standards and therefore by implication, that the travelling public would suffer. One could argue that in certain instances roads are over specified and therefore a relaxation in the specification or more willingness to allow exceptions could result in budget savings.
Event Feedback
Our organisation would be very happy to become involved in any ongoing work on resources and specifically procurement. We are already working closely with the Scottish Government's Procurement & Commercial Directorate on the standard Prequalification Questionnaire (sPQQ) as part of the Scottish Government's Supplier Engagement Working Group.
In the terms of road service delivery by local authorities it was disappointing that [The Audit Scotland Report ''Maintaining Scotland's Roads''] did not highlight the unique mixed market and LLP service delivery strategy that NLC have in their report, since it has many aspects that have proven to achieve best value. North Lanarkshire's response included a number of supporting graphics on the number and value of third party claims, the percentage of road carriageway resurfacing over a number of years which show the reducing trend in claims since the instigation of various carriageway and footway surveys. Supporting evidence also included details on freight movements in Thousands of Tonnes from start and end points in Scotland and the UK. This shows over 1.7million tonnes of freight movement across Scotland's roads. Details are held on file.
The road haulage sector remains keenly interested in road maintenance issues. In particular we seek the effective and speedy repair of potholes / damaged roads - a problem that has of course been exacerbated by the two recent harsh winters. Ineffective reinstatement of road surfaces by public utilities is also of concern and the sector believes the Road Works Commissioner now needs to take stronger action against those companies which make ineffective repairs. Poorly surfaced roads lead to increased costs / time delays for the freight industry at a time when hauliers are already suffering from large hikes in fuel costs. The sector recognises the measures already taken by the Scottish Government to provide funds to repair potholes despite the current public expenditure cutbacks.
Another concern to the industry is that in the last year or so roads authorities have increasingly resorted to road closures to effect road repairs. In many parts of Scotland these closures can result in long diversions e.g. fish lorries coming from the West coast. Road closures should only be used as a last resort - we appreciate the health and safety considerations for road repair staff but we would urge other measures such as traffic lights / convoy working to be used wherever possible.
Standards and Asset Management
Each authority should identify a sustainable level of service - this should not be to remove the £1.7B backlog of road carriageway repairs. Decision on the required investment of roads is premature at present. Each Authority should now be asked to identify a level of services for all assets - not just the carriageways. This will be developed through the current asset management project. For example :- NLC has historically targeted investment achieving a satisfactory level of service up until the adverse winter of 2010. Prior to this winter we had achieved a steady state investment of £5m delivering low claims and a slightly improving road condition index (RCI) at 34% or better. A one off investment of £3m would reinstate this historic level of service (34% RCI). Business case can be met by £3m one off funded by loan charges of £300k/ year equals a saving in claims from present compensation payments being returned to pre- adverse winter levels. Alternative level of service to remove red roads requires £20m investment where the loan charges of £2m per year would not be justified solely on finance compared to the potential £300k saving in claims. Removal of all of the backlog has a substantially worse business case.
Event Feedback
Based on purely financial consideration, the pre adverse winter level of service is investible. Removal of additional backlog is only investible from a public satisfaction point of view to meet the aspirations of residents who continually rate their perceived poor condition of roads as a high priority in household surveys.
Embedding Asset Management The most critical factor in achieving effective Asset Management is that it should be firmly embedded within each organisation at all levels, from the politicians down to the maintenance operatives, so that it provides real change to the way decisions are made and maintenance activities are carried out. This will require behavioural change and strong leadership. Other examples of embedding asset management are: Road Asset Management Plans (RAMPs) need to inform the whole lifecycle of assets from inspection to scheme identification to prioritisation to treatment selection to construction to inspection. There is anecdotal evidence that RAMPs are prepared by Councils because they have to be seen to have them, and that they are not implemented fully to provide real change to the way assets are managed and maintained. There are a number of reasons for this: Lack of understanding of the real benefits to be gained Implementing the RAMP may need restructuring of the organisation Training of management and operatives may be required Sharing of resources, such as the jet-patcher example given in Exhibit 12 of Audit Scotland's report, should be encouraged. Collaborative procurement will yield savings due to shared tendering costs, economies of scale and accelerated implementation. There is no conclusive evidence to guide Councils on what procurement models to use for road maintenance but, framework agreements or partnering will transfer more of the risk onto the private sector and performance related contracts, whereby Councils incentivise Contractors to provide an enhanced level of service (e.g. using a pain/gain approach to target costing, contract extensions, continuous market testing, etc.) should be considered. An example of delivering long-term efficiency savings and public and private partnerships is the Highway Maintenance Efficiency Programme (http://www2.dft.gov.uk/pgr/regional/hmep/index.html) which a consultancy is currently running the through the Midlands Highways Alliance (http://www.mhaweb.org.uk/index ). Councils need to share good practice repair and maintenance methodologies that provide best value for money, in particular where reactive maintenance repairs can be carried out to such quality that they become permanent solutions instead of temporary repairs that need re-visiting to provide a long-term solution. Management of reinstated trenches, in terms of both coordination and quality, needs improving, particularly in town and city centres where multiple reinstatements can exacerbate road deterioration. Reinstatements should not reduce the structural life of the road and should they do so, utility companies should contribute to the maintenance of the road. The outcome of the work that URS Scott Wilson are presently undertaking for the Scottish Road Works Commissioner will go some way to addressing this. There is variation in maintenance costs across Councils which cannot be explained by road condition, network size or user perceptions. Therefore there is a need to benchmark the cost of road maintenance activities across the country, and provide recommendations for an acceptable range (acknowledging that lowest price is invariably not the best value).
Improved Road Asset Management Plans There is a need to improve RAMPs as follows: The Councils' and Transport Scotland's Road Asset Management Plans (RAMP) should be integrated. There is scope to move away from each council having its own RAMP but there are regional variations in the focus of plans that needs to be taken into account, e.g. a RAMP from the north-west will be distinctly different from that of the central belt due to the different traffic composition, environment, geography and hence road configurations. Therefore there may be scope for a regional RAMP to form the backbone on which each council can build their individual RAMP; this would ensure a degree of consistency in RAMPs across different networks. Climate Change Adaptation measures are required to mitigate the risks to highway assets posed by hotter and drier summers, warmer and wetter winters, more extreme rainfall and drought events and rising sea levels, and these should be incorporated into the RAMPs. Quality inventory and condition data are needed for all asset types and this should be made a priority for Councils. The better the data, the more robust the RAMP. The methodology for calculating the maintenance backlog needs revising, as the SCANNER only measures the surface condition of carriageways; it does not measure the structural condition, i.e. how many more HGVs the road can carry until failure. The SCANNER may infer structural condition from the measurements of the surface condition but that is a crude approach. Obtaining a direct measure of the structural condition, using Deflectograph surveys (or Traffic Speed Deflectometer in the near future) will improve the accuracy of the calculation of backlog maintenance. It would be expensive to survey the entire network so surveys should be targeted on a representative sample of the network with priority given to heavily trafficked routes. Council's should also consider their approach to Network Resilience. For example the loss of a bridge structure due to flooding (as happened in Cumbria last year) or the loss of power (for whatever reason) and the impact on roadside communications and signalling.
Better Tools for Asset Managers Asset Managers need a suite of tools to improve their Asset Management Plans and enable high-level decision makers to make informed choices: Understanding the impact of alternative budget scenarios on the condition of the network is key to informing high-level decision makers of the outcomes of budget allocations. Currently Asset Managers do not have the necessary tools to model budget scenarios against network condition; they need tools which can model both the target network condition to derive the required budget and, the projected network condition based on the proposed budget spend. Such modelling would also inform whether a worst first approach or whole life cost approach to maintenance was most beneficial. Given the pressure on budgets at present, there is an inclination to adopt a worst first approach but this is likely to be more expensive in the long-term. Asset Managers need to be able to demonstrate this to their elected members and the public. The resilience of the network to Climate Change should be improved and this can be achieved through the Asset Management Plans. It is necessary to understand the specific risks posed by Climate Change by studying the climate projections and subsequently develop appropriate adaptation measures. A consultancy has developed a tool for such a task and would be willing to provide more information if required. The balance of initial cost to whole life cost and associated carbon footprints of alternative maintenance strategies for a given set of circumstances needs to be understood when defining asset management strategies. A consultancy has developed a tool for such a task and would be willing to provide more information if required. Asset Managers should report the condition of their network to elected members and road users on an annual basis.
Managing Service Levels In light of the current pressures on maintenance budgets, a critical review of service levels is required: Councils need to set service standards which they can afford. This may require current service levels to be reduced to meet available budgets. Indeed road users should be involved in any changes to service levels, through consultation, to understand and manage their expectations. The cost benefit of changing service levels must be thoroughly understood. A consuktancy has experience of analysing the cost of changes to standards having recently undertaken this exercise for the Highways Agency's new routine maintenance standards. Service standards (road condition and response times) need to be communicated, in simple terms, to the road users.
Technology and Productivity
In the opinion of one of the local authorities their experience suggests that this will not deliver significant savings or improvements other than there should be review on the use of stone mastic asphalt and its poor performance on urban roads.
Resourcing
North Lanarkshire procures all works from the private sector. LLP formed to undertake routine maintenance and other contracts let for market testing and capital. LLP awarded capital if they match or beat market rates. In 2000 partnership equaled DLO returns to central fund and in addition provided circa £350k/year in dividends. Retendered in 2010 delivering a further saving of 9%/year plus dividends. NLC have therefore already delivered demonstrable procurement savings of 11% compared with the previous DLO operating model. Recommend that Authorities should demonstrate value for money by market testing and benchmarking. Resources should be targeted to authorities that can prove competitiveness (either in house or externally) and have an approved asset investment strategy - or penalize authorities that do not.
Wider Economic Issues
Resources should be targeted at a national (dis-aggregation of budgets / AEF) and a local level based on damage factors and best return for investment to support the economy. Main damage factors are HGV's and utilities. Previous rejection of use of HGV registration to weight GAE were dismissed too quickly as it was said that registration did not reflect movements, however this was dismissed too quickly without giving proper consideration of this issue. Registrations should be re-examined along with government statistics on freight movement. Information is now also available from the road works register showing the number of utility openings across Scotland. Utilities should be required to provide longer guarantees and contribute to resurfacing.