Highways Agency

Improving efficiency

Improved efficiency is an important element in adding value to service delivery. We have developed a framework of performance indicators to measure efficiency improvements in our existing roads procurement and maintenance contracts for strategic roads.

We plan to achieve total efficiency gains of £200 million in our strategic roads procurement by 2007-08, and our procurement experts are collaborating with local authorities to achieve gains of £190 million in their roads procurement. Together, this will secure approximately 50% of the Department for Transport’s efficiency target.

We chair the Highways Efficiency Liaison Group (HELG), which steered development of a Strategy for Achieving Efficiency Gains from Collaborative Roads Procurement, published in September 2005, and has continued to help drive further collaborative initiatives. HELG is a unique cross-industry group, and is the main means for engaging with the industry, taking initiatives forward and challenging the way procurement is carried out. It helps to get the message on collaboration and efficiency out to local authorities and suppliers.

Effective business processes

Our ’Way we Work’ quality management system has been developed to help us follow best practice processes and procedures. Key processes have been analysed, improved and loaded onto the new system which delivers:

• Consistency across the organisation, with everyone using the same up to date processes
• Clarity, with one easily accessible point for information about how we do things and what tools we use
 Continuously improved processes to meet our changing needs
• Compliance to reduce the risk of not doing things properly and jeopardising our good work

Response to the Nichols review

Last year the Secretary of State for Transport initiated a report on cost forecasting and programme management of our major road schemes. The review was undertaken by the Nichols Group, and it confirmed that estimates have increased above initial forecasts, largely on schemes which are not yet in construction. The biggest single factor was higher than expected inflation in construction prices.

The review noted that estimating is inherently difficult for schemes with expenditure spreading over ten or more years ahead. Nichols made a number of recommendations for improvements in the development and management of schemes, so that our large forward programme of investment can be successfully managed:

• restructure the roads programme into phases
• improve governance arrangements between the DfT and the Highways Agency
• improve estimating, risk management, procurement and delivery capability

We have developed an action plan, and are working closely with our supply chain to implement these recommendations.

Resources allocated by priority

Regional operations boards have been established in every region to direct resource allocation. Their role is to discuss and review performance of the regional network, in terms of reliability, safety and information provided to travellers, identifying issues and actions to be taken regionally or taken to national level for consideration.

Quality support services

We are committed to our support services being best in class. We have made a start on this by benchmarking our Procurement and Corporate Communications functions.

We meet the benchmark of excellence in procurement competence set by the Chartered Institute of Purchasing and Supply (CIPS), placing us alongside the best procurement organisations in the UK.

Early contractor involvement

We have designed and implemented new forms of contract, including the Early Contractor Involvement (ECI) contract for major new-build projects, which involves the supply chain earlier in the planning and designing of projects and service requirements.