Highways Investment Strategy - PowerPoint Presentation

Slide1

Highways Investment Strategy

May 2014Slide2

Background

1,100 km of roads

One of the lowest spends in the country

Consecutive years of severe weather

Significant damage to an already deteriorating highway and drainage network

£30m+ backlog

Residents’ survey results show very low levels of satisfaction

The highest residents’ satisfaction in the country for highway condition is 49% (we are 23% and not the worst!)

Condition survey indicates ACTUAL condition in NS not worse than elsewhere in the countrySlide3

Initial conclusions

We don’t charge very much (Council Tax, car parking)

We don’t spend very much

BUT

The condition of our roads is good compared with the average and our neighbours

YET

Resident satisfaction is very low

BECAUSE

Our residents have higher than average expectationsSlide4

Asset Management Approach

Fundamental review in 2010 led to embedding of asset management, change in treatment approach and a significant increase in asset life (equiv. of £1m investment per annum)

Our changing approach validated by May 2011 Audit Commission report

“Going the Distance”

and Highways Management Efficiency Programme report April 2012

“Prevention and A Better Cure”

Reactive vs preventative / structural

“Worst First” vs “Whole Life”Slide5

Reactive vs Preventative / Structural

Reactive maintenance restores the asset to a safe state but does not improve its structure or extend its life

Preventative / structural maintenance treatments (such as surface dressing) preserve or extend the life of the asset

Public demand is to spend money on immediate and reactive repairs, but evidence shows that spending money on preventative and structural maintenance is much more cost effective in the long term

The more the overall network deteriorates, the more the demand for reactive gets out of control; this can lead to a

vicious circle

of prioritising spend on reactive maintenance and making less and less available for structural and preventative measuresSlide6

Uncontrollable Pressure

Each year for last 3 years = c. £250k overspend on potholes / reactive maintenance

2010/11 and 2011/12, pressure funded by Gvt Winter Damage Grant

2012/13 – materialised as overspend plus drainage overspend (£750k)

2013/14 onwards – as network deteriorates – spend on reactive maintenance will increase – Overspend much reduced but partly due to relatively mild winter…

This is a financial strategy . . .

Spend money on improvements not on failure demand

However in short-term still need to address pressure to reactive maintenance budgetSlide7

“Worst First” vs Whole Life

Worst first fixes the roads in the poorest condition and is typically costly resurfacing and reconstruction and means only a small number of roads are fixed

Whole life / asset management approach requires

intervention at the right time,

and over time is more cost effective

A road can often be cheaply restored to “nearly new” and its life extended significantly by intervening at the right time. This means more roads are repaired.

“Whole life” repairs (such as surface dressing) can appear to be on stretches of road that are in good condition

HOWEVER - When total resources are insufficient (as they are now), prioritising “whole life” work will leave some “worst first” roads unrepaired for longer than we would wish

Residents’ concerns may push councils towards a “worst first” strategySlide8

Issues

Highways are vital to the economic, social and environmental well being of the area

Highways are increasingly fragile and less resilient

Public expectations are high

Resources are reducing

Short term repairs provide poor value for money

Asset management delivers efficient and effective repairs based on evidence

Strong leadership and commitment to the principles are requiredSlide9

Budget Response

Short Term

Prevent

– additional £180k for gully emptying

React

– c. £796k to be spent on reactive maintenance (incl. one off £296k).

Fix

(drainage) – up to £1.7m available over 3 years for drainage schemes

Medium to long term

Plan and Improve

- £4.3m to be spent on preventative and structural improvements (including additional £200k revenue growth, additional NSC capital and additional Gvt grant)Slide10

Long term investment strategy

C. £5.3m per annum needed to maintain

“steady state”

(in today’s price) assuming Asset Management principles are followed

Worst-first approach would add £1m+ p.a.

2012/13 budget = £3.4m

2013/14 budget = £4.3m

2014/15 budget = £4.4m (but see next slide)

Options / scenarios for how to close gap in the future ….Slide11

May 2014 - Update

£395K announced following budget in March. Mix of reactive & planned works

Pothole challenge fund announced in April 2014. Deadline 22

nd

May

Further opportunities to close funding gap being explored.Slide12

Scenario 1 - Do nothingSlide13

Scenario 1Slide14

Scenario 1Slide15

Scenario 2 - £200k revenue growth per annumSlide16

Scenario 2Slide17

Scenario 2Slide18

Scenario 3

(as 2. but with capital injection)Slide19

Scenario 3Slide20

Scenario 3Slide21

Scenario 4

£200k revenue growth in each year (£1m in 2014/15)Slide22

Scenario 4Slide23

Scenario 4Slide24

Compare OptionsSlide25

Compare OptionsSlide26

Conclusions

If we do nothing, highway will continue to deteriorate

Highway will be prone to weather events

Revenue budget is likely to be inadequate to meet demand for reactive repairs

Any short-term improvements in resident opinion will rely on communication improvements and changing expectations / perceptions in context of continuing deterioration for at least 3 or 4 more years. Slide27

Conclusions

Investment in the highway is a political and public priority

Options are just that and they are endless – it’s just a model into which we can input infinite variables

Early improvements require significant early investment

Challenge is maximising investment in the short term (in the face of reductions in overall funding)

How do we make this strategy part of the budget setting process? How do we make this a priority in the current financial climate?

ONE FINAL SLIDE . . . Slide28

It’s not just about more money

Continuing to review the balance between structural, preventative and reactive maintenance, including minimising temporary repairs

Balance spend between principal, non-principal and unclassified roads (90% of journeys are made on principal roads)

Ensuring that the right choices are made when designing and specifying techniques and materials for the maintenance and repair of highways

Maintaining effective coordination of street works and minimising highway openings

Enhancing inspections and training

Monitoring public satisfaction and improving communication and engagement

Providing clarity to the public in relation to response times and treatment of potholes / defects

Continuing to monitor and manage contractor performance