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Managing roads maintenance
Contract Journal; 16 September 2008

The way that roads are run has changed. Road maintenance is now being managed in the same manner as buildings, by valuing it and then planning the maintenance spend. Mark Smulian explains how the highways budget is now being spent

Despite the current climate of belt-tightening, council highways engineers are preparing for an innovation they think might not only allow them to spend their budgets better, but ultimately secure more money for roads maintenance. This new approach - asset management - is also being taken forward by the Highways Agency (HA).

Last January, transport minister Rosie Winterton announced a somewhat modest 15m to help councils make inventories of their roads networks.

But why do they need inventories? Surely each council knows how many km of roads it owns and in general terms what condition it is in?

Some do, but roads maintenance has never been approached in the way that one would maintain a building, by valuing it and then planning the maintenance spend needed to keep it in a sound, usable state.

Instead, a lot of highways budget go on reactive maintenance, paying contractors to fill in potholes as and when they appear, rather than on joint working between councils and contractors to plan how best to spend the highways budget to sustain the network.

Matthew Lugg, chair of the County Surveyors Society's Engineering Committee, thinks asset management's time has come, and that both contractors and councils will benefit.

"It is time this was applied to highways. In the utilities industry asset management has enabled effective infrastructure management, but the view in councils has been that since we can't sell the highways network there is no point in treating it as an asset," he says. Lack of an asset management plan means that councils "habitually spent their highways budgets, and if they had a bit left over did some more, but with no plan to it".

Lugg continues: "The current approach is to fix potholes and work reactively. Asset management allows you to work in a proactive way but it requires upfront investment."

That is where the 15m will be used, but beyond that is the prospect of extra money. If a highways department can demonstrate that it knows the state of its roads network, what needs to be done to keep it in good condition and has planned the long-term work needed, it is far more likely to persuade council finance chiefs to borrow money for this work than it could if it effectively said, "could we have few hundred thousand pounds to do the potholes".

This 'prudential' borrowing is a recently acquired power for councils to borrow money for any purpose that promotes the well-being of their area. That is a wide definition but the key concept is 'prudent' - being able to demonstrate that it will be put to good use.

"Once you have an inventory of assets it should mean that contractors will be looking at techniques like whole-life solutions," Lugg says. "It allows investment to be planned efficiently and spent where there is greatest risk. If you know whether a road is going to fall apart and when to put it right, you can extend carriageway life."

From the contractors' viewpoint, he expects asset management to lead to "a more enlightened approach to the client, consultant and contractor split, allowing for more joined up solutions".

"The difference it that it would be a continuous process of partners looking at what needs to be done", he adds.

This is a view that has gained heavyweight support from the Chartered Institute of Public Finance and Accountancy (CIPFA), which has backed the arguments about better value for money made by highways engineers.

Rob Whiteman, chief executive of Barking and Dagenham Council, who led CIPFA's asset management work, says: "More resources will not be deployed [on highways maintenance] until there is a sound basis of data on which to make decisions but at present the lack of resources means that the need for better data and reporting remains to be properly addressed.

"This 'chicken and egg' problem must end with local government and central government giving greater priority to their responsibilities, because for the public the poor state of our roads continues to be a major concern."

His report for Cipfa noted: "Comprehensive transport asset management has the potential to deliver significant efficiency gains and improvements in the services delivered to users."

It said that some 250m a year could be saved across all councils and that the experience of utilities pointed to even greater efficiency savings being possible. Contractors are broadly supportive of asset management. One place that already uses it is Bedfordshire Highways, a partnership between Amey and Bedfordshire County Council.

Amey's technical manager there, Nick Woodgate, says the firm has had a highways asset inventory since the 1990s and has found it a good idea: "It allows you to know what you have and what the value of your network is, and then you can use depreciation and work out your asset's performance against indicators."

Spending can be targeted effectively on a rolling programme of maintenance within a general target to maintain the value of the network. There are also asset and performance-based targets for different types of road. It has given Amey an objective basis on which to plan spending, which it does jointly with Bedfordshire under its partnership.

This means money goes where engineers think it should be spent, not where influential councillors who want work done in their constituency would like it to. Amey consults each year with parish councils in the county over their priorities for roads work and tries to align these requests with its performance targets.

Woodgate says: "Money is spent where the condition survey indicates it should be and not based on political considerations, and there is a target to reduce the spend on reactive maintenance, which is not cost-effective.

"I think quite a lot of people will take this approach as a way of working, but you do need to get the politicians on side."

Dennis Parkinson, an adviser to Ringway and its former group technical manager, thinks asset management is "a good process involved with partnering arrangements".

"In the past, local authorities have had little option but to do reactive work, and asset management should help their budget process," he says.

"Partnering needs clear relationships focused on best value and information that allows you to look at whole-life costs, so it needs inventories of everything they have and then term maintenance contractors can work with them to secure improvements."

Asset management needs upfront investment in inventories to work, and with tight budgets councils may be reluctant to commit to that, but those promoting the technique are convinced that they will get more for their money long term and that contractors will see more work.

Prevention is better than cure

The Highways Agency has been developing an asset management strategy for the past year, which it hopes will by next year become an integrated system that will both log and monitor its assets, providing a better tool with which to manage them.

A spokesman explains: "It will allow us to be far more efficient, to carry out improvement and maintenance work where there is a 'need' not just as routine work, and to be more effective - we will have the ability to better manage and prioritise our work."

Assets to be logged are bridges, roads, drains, tunnels, signs and street furniture such as crash barriers. The HA has some 7,100 km of roads, 16,000 bridges, with an estimated value at present of 84m.

"The new system will provide us with a new way of working, which will be better and more efficient," the spokesman adds.