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Future of Highways Maintenance | Procuring differently

As Highways England reaches the halfway point in its road maintenance shake up, New Civil Engineer looks back at how things were, how things are and asks if things have really changed.

When England’s strategic road operator the Highways Agency sounded the death knell for its asset Support Contract (ASC) model in 2015, few mourned its loss. A flawed system put in place to accommodate the tight purse strings of a government hamstrung by austerity measures, the ASC model left contractors, the Agency and end users frustrated with the results. 

In the summer of 2010, the established regime of Managing Agent Contractor (MAC) contracts was replaced by the leaner arrangement: the ASC. Designed to deliver maintenance of motorways and trunk roads at less cost, contractors would work to lump sum, target cost contracts. On the surface it sounded commendable, but many contractors complained that it squeezed already tight margins to near suffocation. 

“The reality is that ASCs were developed at a time of austerity,” explains Highways England head of contract innovation and intelligence Martin Hobbs. “The intention was to drive cost savings for central government because of necessary spending restrictions.” 

In April 2015 a new era dawned as the Highways Agency became Highways England and its £15bn customer-focused Road Investment Strategy (RIS) was born. Highways England suddenly had key performance indicators based on outcomes such as minimising delays to users. It also had a new funding strategy, replacing its an annual spend to a five year programme. This forced a change in mindset, turning Highways England from a construction client into an owner/ operator. The ASCs were replaced with the asset delivery model. 

The key difference is that Highways England now makes investment and strategic decisions on when and how to carry out the maintenance and construction work previously done within the scope of ASC/ MAC contracts. Instead contractors are appointed to specific maintenance, design and construction contracts to carry out work set out by Highways England. 

As of 1 July 2016, Highways England Area 7 in the East Midlands became the first of 12 highway regions to be switched over to the asset delivery approach. In total, Highways England’s network has shrunk from 14 to 12 regions, with an additional area covering the privately-financed M25 design, build, finance & operate contract.

Highways england contracts

“The first major change was the development of RIS,” says Hobbs. “We could see the pipeline of work and the ASCs didn’t allow us to be flexible to make the changes that we wanted. “Under ASCs, contractors understandably took a commercial approach whereas we now take long term strategic decisions. It is effectively the same job, but done in a totally different way. “We have taken back the responsibility of managing all investment decision making, in order to give Highways England much greater control and understanding about what is happening across the entire network.” 

Scheme identification, maintenance decisions, planning occupancy and incident and severe weather management have all been taken in-house and under the control of Highways England. Meanwhile maintenance and response (M&R) work is arranged over 15 years with contracts awarded, or reviewed, at three year intervals. The M&R contracts sit alongside design services contracts, a construction works framework and specialist goods and services contracts, all of which would have previously been within the scope of the MACs/ASCs. 

The design and construction contracts have sparked innovation in project delivery – Hobbs points to the 4,500 solar road studs installed on the A38 in the East Midlands – while the M&R contractors focus on routine and cyclical maintenance, incident response and defect rectification. This month marks the halfway point of the switch over as Area 10 – North West England – moves to the new system, with Amey winning the £325M M&R role. Areas 13 and 14 covering Scotland went live in April 2017, while areas 1 and 2, which covers south west England moved over to the new model in July 2017. By the end of the year, Area 6 (Essex, Norfolk, Suffolk & Peterborough) and Area 8 (Cambridgeshire, Bedford, Hertfordshire) will also have transferred across to the new model. And by 2022, all 12 Highways England regions will be operating under the asset delivery model. 

Getting this far has been no mean feat, and 450 additional staff have been recruited by Highways England to take on the extra workload resulting from keeping its asset management in house. 

“We are about halfway there now, it is such a big change, but you aren’t going to see big benefits straight away,” says Hobbs. “It takes a while for the supply chain to fully understand the new model, for our new staff to be embedded and for everything to be operating at 100%. And the early signs are good. The East Midlands has already seen a 23% increase in activity at each intervention.

“What that means is that Highways England is successfully using traffic management systems in order to get more done quicker and in a better way for the end user,” Hobbs explains. The condition of the roads is also on the up. Highways England targets, now monitored by the Office of Rail and Road (ORR), aim for 95% of road surfaces to be in a good condition, not requiring further investigation. In 2017/18 it met its national target for road surface condition for the first time since the target was introduced in 2015. 

So while Highways England and the ORR agree that there is still a way to go until the benefits are truly seen, the asset delivery model is starting to show signs of promise.

When England’s strategic road operator the Highways Agency sounded the death knell for its asset Support Contract (ASC) model in 2015, few mourned its loss. A flawed system put in place to accommodate the tight purse strings of a government hamstrung by austerity measures, the ASC model left contractors, the Agency and end users frustrated with the results. In the summer of 2010, the established regime of Managing Agent Contractor (MAC) contracts was replaced by the leaner arrangement: the ASC. Designed to deliver maintenance of motorways and trunk roads at less cost, contractors would work to lump sum, target cost contracts. On the surface it sounded commendable, but many contractors complained that it squeezed already tight margins to near suffocation. “The reality is that ASCs were developed at a time of austerity,” explains Highways England head of

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