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Councils face Best Valueanalysis
Possible externalisation of North Yorks DLO
Major term contract for highwaymaintenance on offer
The current buzzword inthe corridors of North Yorkshire County Council's stately Victorian headquarters in Northallerton is 'Best Value'. From next week, England's largest county, along with all other local authorities, must be seen to practice Best Value in virtually everything it does.
Design, management andcontract procurement of a vast portfolio of services - from maintenance of the county's farms, grass verges and a single plank footbridge across a Yorkshire Dales stream, to the stewardship of more than 9,000km of roads and 2,200 bridges - are all being reappraised to ensure optimum value to both council and ratepayer.
Even the efficiency of the client team itself - the council's own engineering staff - must now be best valued. 'It formalises the informal and forces us to ask why as well as how,' says director of environmental services Mike Moore, whose department provides the procurement route for most construction related contracts.
Under his wing lies the maintenance of 8,300km of local roads and 700km of principalA-class highway. The county lost its Highways Agency motorway and trunk road maintenance contract to Halcrow a year ago.
But there is also the upkeep of 1,600 highway bridges - of which 150 still need strengthening to take 40t lorries - plus 600 other crossings of various sizes down to the footpath plank in the Dales.
Moore also offers capital works but, as he points out resignedly; 'current spend is zero and has been for five years'. Of the 20 bypass ideas gathering cobwebs in his pending tray, only one is free from dust - an integrated road and public transport scheme for Scarborough.
Following provisional government approval a few months ago, this £18M project, involving the construction of an 8km bypass plus creation of park and ride facilities, now also waits Best Value analysis. Engineers must decide if the original idea of procuring the scheme through the Private Finance Initiative is still the most cost effective compared with traditional government funding.
But most of Moore's engineers do not have the luxury of choice. They spend their time juggling the financial offerings of central and local government politicians, prioritising which of the county's deteriorating road stock needs it most.
Years of serious underfunding has left that stock in a desperate state. Most needs reconstruction but will be lucky to get potholes refilled or surface redressed.
Head of environmental management Mike Masterman reckons he has a road repair backlog of £120M. This year he asked Government for £10M for structural maintenance of the 700km of principal roads. He got £2.4M plus a note on Whitehall paper that his request was 'unrealistic'.
His annual government allowance for overall maintenance on 8,300km of local roads is around £25M. It should have been £30M, but local councillors can and do reallocate the cash, still seeing more votes in education and social services than roads.
However Masterman is slightly more cheerful than this time last year. 'Our principal roads budget has doubled and at last there seems a realisation, both nationally and locally,that we have a serious problem.'
His allowance covers all highway work from winter maintenance to resurfacing. This is tied up in a six year term contract won in 1995 by the council's own Direct Labour Organisation.
But this is up for renewal next year and the council is thinking seriously of externalising its DLO. The entire in-house operation could be wound up and the next termcontract offered only to outside contractors. Tenderers competing for the £20M/year contract would have to take on the entire 330-strong DLO workforce.
The prime reason for the possible DLO closure is the substantial winter maintenance commitment. This essentially rural county demands a lot of gritting and snow clearing, which dictates the size of the DLO workforce. But, during summer, the DLO struggles to maintain the same numbers and council engineers feel both theworkforce and the authority could benefit from its externalisation.
Back in 1995, the DLO won the term contract easily. But now the private sector is more geared up to such work .
'Our DLO faces a declining future,' says Moore. 'But if it was transferred to the more flexible private sector, the workforce would be in an expanding industry.'
Already externalised, and novated to the private sector exactly a year ago, are the department's 65 design staff. They now work for consultant Mouchel which has a five year contract to design and supervise construction of capital works, including major repairs.
An annual budget of £3M is earmarked for bridge strengthening and, of the 450 that needed upgrading, about a third have still to be completed. Though Best Value principles do not demand compulsory competitive tendering for all work, the council feels competition remains the best way tobenchmark efficiency and bridge strengthening contracts are offered individually and competitively.
'We believe in CT rather then CCT ' says Moore. However next month sees the start of a more esoteric Best Value benchmarking exercise on Moore's own staff.
Engineers will be casting more than the usual inquisitive eye on their counterparts in neighbouring councils to ensure the department is getting the best deals around. 'It is rather like shopping around different supermarkets for the best priced can ofbeans' says Masterman succinctly.
Andrew Hugill, senior roads engineer.