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National Audit Office releases progress report on UK’s Road Investment Strategy

The UK’s National Audit Office (NAO), which scrutinizes public spending for Parliament and is independent of government, says the Department for Transport (DfT) and Highways England (HE) need to take decisive action before the summer, if they are to deliver optimal value from their Road Investment Strategy (RIS).

The progress report says the first Road Investment Strategy, which covers the five years between April 2015 and March 2020, is an important step toward better long-term planning of England’s strategic road network. But the speed with which it was put together has created risks to deliverability, affordability and value for money that could be carried forward into future road investment periods.

In 2013 the UK government committed £11.4bn (US$14.2bn) of capital funding to improving motorways and A-roads during 2015-20, with £7.7bn (US$9.6bn) for 112 major enhancement projects and other projects designed to promote cycling, improve air quality, and encourage economic growth. The remainder was allocated to the renewal of the existing network.

So far HE has completed six projects on or ahead of schedule and has started construction on a further 19, with 16 planned to be on or ahead of schedule. The agency forecasts that these projects will be delivered 5% over budget. HE met its efficiency savings target of £33m (US$41m) for 2015-16, and expects to exceed its target for 2016-17, but it has to achieve 70% of its savings target of £1.2bn (US$1.5bn) in the final two years. HE is also facing challenges in recruitment of staff to cope with the increased workload. It plans to procure contracts for 57 projects in 2017, compared with six in 2016, but is 19% below its target headcount for procurement and commercial specialists. The agency has been filling gaps with consultants and interim staff, who cost on average three times more than permanent employees.

HE is now reviewing the portfolio of enhancement projects to improve value for money, and has so far identified 16 projects that may be a risk. While this may mean that some expectations are not met, value for money depends on the DfT and HE proceeding with a realistic and affordable plan. The NAO has recommended that the two agencies should agree an updated delivery plan for the remainder of the road period, including a clear statement setting out the impact of this updated plan on any work undertaken in the next road period. The DfT should also re-evaluate its approach to oversight of HE, as the scale and complexity of its investment portfolio increases.

“The Department and Highways England need to agree a more realistic and affordable plan if they are to provide optimal value from the Road Investment Strategy,” noted Amyas Morse, head of the NAO. “Highways England has been working to address the risks to deliverability, affordability and value for money that were present in 2015, but we are now nearly two years into the five-year road investment period. Decisive action needs to be taken before the updated delivery plan is published in the summer if shortcomings in the current strategy are not to be carried over into future road investment periods.”

March 22, 2017

Written by Adam Frost

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