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Roads funding shake-up could lead to mega deals

Mega-road maintenance contracts straddling council borders could emerge from the shake-up in funding distribution, a leading roads consultant figure has predicted.

Mouchel public services director Matthew Lugg said the soon to be introduced system of awarding highways upkeep cash based on performance could encourage councils to work together to be more efficient.

Lugg - also a board member of the government-funded highways maintenance efficiency programme - helped ministers create the questionnaire that will ultimately be used to determine funding allocations.

He said that among other things, the new set up was intended to encourage councils to work collaboratively with their contractors - and with each other.

“By working with other local authorities they can deliver economies of scale,” he told NCE. “I think potentially we will see bigger contracts coming along.

“The model to look at is London, where the huge number of contracts has been aggregated and brought down to four.

“This has led to 20% savings on tender price alone, and another 20% through better ways of working.

“Another driver for this is devolution, where we have groups of councils in places such as Greater Manchester, West Yorkshire and the West Midlands. I am almost certain we will start to see bigger contracts.”

Lugg said larger deals would give contractors the incentive to bring in new ways of working that would improve the efficiency of road maintenance work.

Transport minister Andrew Jones last week revealed that an initial self-assessment questionnaire had been distributed to local authorities as a step towards the new system.

“The questionnaire being issued asks about asset management - whether authorities take a long-term view of road repair or wait for problems to develop before taking action,” said Jones.

“It asks about customer satisfaction - and whether authorities are listening to road users and responding to their views.

“And it asks about collaboration - whether authorities are working together, to share practice and resources.”

The final version of the questionnaire will be released in the autumn, with a completion deadline later this year. Results will affect funding allocations for the 2016-17 financial year.
Jones said at a conference in London this month: “We have moved on from an approach in which money is handed out purely on the basis of where the need is greatest. “Frankly, sometimes the need is greatest because a local authority has not used the funds it has received as efficiently as it could.”

There will now be a gradual increase in the amount of money available on a performance basis, according to Jones.

“Authorities that spend money on roads efficiently will be rewarded with extra funds to keep up the good work,” he said.

“By the financial year 2018-19, over a quarter of funding will be allocated on the basis of either competition or performance.”



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