To receive the above report.

Barry Giggins, member of public, submitted a statement for the Panel to consider:

“The Volker Highways contract is due for renewal next year and, due to the complexity of this contract by combining the consultant and contractor roles, I request the Infrastructure Overview and Scrutiny Panel to recommend seeking an audit by a suitably fully qualified person to establish whether the current contract is value-for-money and conforms fully with the Council’s financial standing orders. The value-for-money element should include the actual cost of implementing works compared to other authorities.”

Simon Dale said he had spoken to Mr Giggins regarding the contract’s value for money aspect, which was subjective, and could be calculated by cost per square metre of tarmac, for example, but this was not necessarily a good measure of VfM. The contract did conform to the council’s financial standing orders. Simon Dale said the service area did not have much comparative information compared to other authorities due to the lack of benchmarking information; however, the borough was comparable to tarmac and the supplies VolkerHighways used when it came to materials costs.

Simon Dale introduced the presentation and said the initial contract term was due for expiry in 2022. An audit had been made on the service and a Task and Finish Group had looked at the service provided by Project Centre. It was incumbent on the council to indicate to VolkerHighways its intention for the contract, and the council was able to extend the contract for up to two years.

Cabinet approved the five-year term contract with VolkerHighways at Cabinet in June 2016 and the contract was awarded in January 2017. The commissioned service contained seven services; street cleansing was sub-contracted to Urbaser and scheme design and delivery was sub-contracted to Project Centre. The use of Project Centre increased resilience, as the council in previous years did not always have specialist engineers to call upon for specific issues, but now there was a repository available. VolkerHighways was monitored mainly through key performance indicators, and the borough had a duty under Best Value to continuously improve the services provided, and the team had been looking at new ways of working on highway maintenance work to increase effectiveness.

(Councillor Baldwin left the meeting.)

An asset management approach was used for maintaining the highway, and as a highway authority, the borough had to report on its performance, including reporting on the way the annual allocation for potholes was invested. VolkerHighways was performing well against its key performance indicators, with all but one of the key performance indictors in green. If the contract was agreed to be extended, the team hoped to set more challenging targets to be met.

Over the four-year period that VH have been maintaining the highways, there was an improvement in road condition due to the level of investment with many roads moved from the red, to amber to green RAG rating. Good road networks were important to develop tourism, regeneration, and inward investment. Road investment increased since 2015-2016 due to the Incentive Fund and the Department for Transport (DfT) grant regime. Investment tailed off in 2021-2022 as the grant has been cut by government and the council was unable to invest its own money within the Capital Programme in this municipal year and there was a reliance on the DfT grant. There was a correlation between investment and improved road conditions.

Resident satisfaction was based on National Highways and Transport survey where a random sample of residents were asked questions. The borough was, overall, above the national average, with a couple of areas the borough was just below the national average.

The future options available for the contract were reviewed and partnering opportunities with neighbouring boroughs highway service provisions illustrated, including many outsources provisions and a few in house teams. Service improvement proposals that could take place included optimisation of gulley routes, mapping of drainage assets, first time permanent pothole repairs, use electric vehicles, use of lower temperature asphalt, permitting and rationalise inspections and customer services team.

The Vice Chairman said he was supportive of the option to extend the contract with service improvements and was agreeable of first-time permanent pothole repairs. He asked if the DfT grant could only be spent on potholes, or if it could be spent elsewhere. Simon Dale said the capital grant from DfT could be used for other capital schemes, if the council deemed this appropriate, but this would undo all the work on the highways quality and undermine regeneration and inward investment. The pothole fund had to spent on pothole repair or broader patching but should be targeted at general repairs because of any service if the council wished

Councillor Hilton said similar information to this should be made available annually and helped answer queries about the cost and effectiveness of Project Centre and VolkerHighways.

The Panel noted the item, and the Chairman said the Panel should support the two-year contract extension and Councillor Bateson expressed her agreement.