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Highways Corporation plan goes out to consultation

30 Oct 13 The government has published its plans to turn the Highways Agency into an independent public sector corporation, like the BBC or Network Rail.

Its thinking is that putting further distance between politicians and the running of the strategic road network will mean the network is better managed and the road budget will be less susceptible to the chopping and changing of political interference.

The proposal came out of a 2011 review of the Highways Agency by former Post Office managing director Alan Cook.

The government claims that turning the Highways Agency into a government-owned company will save “at least £2.6bn over the next 10 years”, although it prevaricates over how this number is reached.

Its consultation paper says that if a five-year investment plan for the highways is enshrined in law, then construction companies will reduce their costs by £49m a year on capital maintenance and renewal and by £57m a year on resource maintenance and operations.

On its calculations in reaching this figure, the impact assessment document states: “We believe that legislation will be sufficient to achieve a sustained commitment to five year investment plans ads that the supply chain will believe the plans and change behaviour accordingly; if this is not true the benefits will be significantly lower.”

It then goes on to say: “We have evidence that promises of funding certainty by HM Treasury are not sufficient to deliver significant change in supply chain behaviour, but this is the key uncertainty.”

The proposed changes are the next steps in the Action for Roads command paper that was published earlier this year, following up the Cook Review, and set out the future plans for the management of motorways and trunk roads.

The consultation paper asks for the public’s views on the proposed structure and accountability of the new government-owned company, along with input on how a proposed new watchdog should be run (Off-Road perhaps?) and a separate new organisation  that will monitor the performance of the agency.

According to the government, the new company will have more freedom in day-to-day operational decisions, but will remain fully accountable to the secretary of state for transport, Parliament and therefore motorists.

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It will not be given powers to introduce tolls on any existing roads.

The consultation closes on Friday 20 December 2013 with outcomes reported by spring 2014.

Roads minister Robert Goodwill said: “This government has committed to the biggest ever investment in our road network worth £50bn over the next 15 years, but we need to make sure it is spent wisely. Efficiency savings are there to be made, but to secure these means changing how our motorways and trunk roads are managed and maintained.

“Transforming the Highways Agency into a government-owned company means long-term savings for the taxpayer, and making sure our roads are fit for the 21st century – supporting jobs and growth across the economy.

“I also want motorists to have a greater say in how their roads are run and that is why I have proposed an independent watchdog - free from government - is set up to make sure the Highways Agency is delivering the wants, needs and expectations of motorists.”

The Institution of Civil Engineers has thrown itself firmly in favour of the idea. Its director general, Nick Baveystock, said:  “These proposals could finally end the stop/start investment that has hindered effective management of our roads for too long, and we look forward to prompt introduction of the promised legislation so they are implemented speedily. The supply chain also has a key role to play now in preparing for the changes and building its capacity.”

As previously reported,making the Highways Agency a corporation will also mean that staff will not be tied to civil service pay grades and the bosses can be paid more than the current upper limit of £208,100 a year.

What Cook said

In 2011 Alan Cook published his report A Fresh Start for the Strategic Road Network (the Cook Review), which staed, inter alia, the following:

“…the unique position of the Agency, and its relationship with government, has failed to reflect the wider interests of our economy. The close proximity of the Agency to the DfT means that there has historically been little pressure for the Government to take, or stick to, long-term decisions for investment in the network. Governments have tended to put their own short-term needs, as service providers and funders, ahead of the long-term interests of taxpayers and road users. Perceptions of political pressure, and constraints on civil service recruitment and rewards, have also created an over-centralised working culture that is unnecessarily ‘risk-averse’. Unlike in the regulated sectors, there is no continuous external pressure for efficiency. Successive changes of approach and agenda have also created duplications and inefficiencies between the Agency, its supply chain and local authorities.”

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