Highways Agency

How the Vision will be Delivered

Seven interlinked, strategic objectives have been identified. These have resulted from informal discussions with stakeholders and potential partners, a formal consultation exercise held during December 2004 and January 2005, and the stakeholder workshops that preceded and followed the formal consultation:

• Working closely with other delivery partners
• Developing a consistent culture, based on the principles of partnering
• Encouraging the use of collaborative contracts between individual local authorities (LAs) and between the Highways Agency and LAs
• Encouraging operational collaboration
• Identifying, sharing and promoting best practice
• Developing a consistent approach to efficiency and performance measurement
• Communicating effectively.

4.1 Working closely with other delivery partners

Since mid 2004, the Highways Agency has been exploring how to work more closely with local authorities to deliver efficiency targets. In addition to direct consultation with many local authorities and suppliers, and bodies who represent the technical, professional and political interests of local roads, a formal consultation exercise was held during December 2004 and January 2005. The fi ndings of this consultation have been fed into this document.

It was essential to gain the wider views of the local roads industry. This has been achieved through close working with key organisations including: Institution of Highways and Transportation (IHT), County Surveyors Society (CSS) and Technical Advisers' Group (TAG). The Highways Agency is also working with the IHT Procurement Board; the CSS Best Practice Groups; various Regional Centres of Excellence; and the National Highways Best Value Benchmarking Clubs.

The Highways Efficiency Liaison Group was formed (see appendix A), to engage the industry on a wider basis and to give advice on matters potentially outside the highways sector in England that might be of value in taking the work forward. Looking to the future there is potential for extending the collaborative approach to encompass clients and suppliers operating in other parts of the UK.

4.2 Developing a consistent culture, based on the principles of partnering

The key to changed procurement practice lies fundamentally in changing the way the industry behaves, particularly the way clients and suppliers interact. The new forms of contract (such as longer term MAC style contracts) will only be fully effective if true partnering and supplier empowerment are allowed to develop, with clients focused on longer term planning and contracts as opposed to project and incident management. The adoption of behaviour that supports a consistent culture across the whole industry would achieve significant efficiencies and deliver substantial benefi ts. Other key elements are compatible and meaningful performance measurement and management across all supplier/client organisations.

One element of developing a consistent culture is the importance of shared values. Discussion at the post-consultation workshop, which agreed the thrust of the Strategy, stressed the importance of this. That discussion also indicated that the HA's values : customer service; teamwork; improvement; best value; diversity and integrity are helpful to achieving consistent cultures.

4.3 Encouraging the increased use of collaborative contracts

There are clear opportunities for public sector clients to collaborate in developing more efficient forms of contract that reduce the need for procurement effort. Collaboration should also extend to the supply chain to develop contracts which allow greater efficiencies to be obtained from supplier organisations - including by achieving greater clarity of the expectations on delivery and quality and enabling suppliers to plan more reliably for the longer term. Examples of such opportunities might be:

• Joint (HA / LA) area maintenance contracts
• Joint project contracts
• Regional framework contracts with access available for HA and LAs
• Aggregation of demand - e.g. bulk purchasing
• E-procurement
• Joint Research & Development
• Exploring new procurement models - e.g. NHS ProCure 21
• Communication and Information Technology developments
• Making optimal use of project management expertise with the public sector.

Key partners in this development work, and in other areas of collaboration (see below) will be the Regional Centres of Excellence (RCEs). These regional organisations, originally set up to deliver the National Procurement Strategy, have now been given an efficiency focus to take forward the implementation of the Efficiency Programme and they are charged with driving efficiencies through all local authorities and across all spending areas. Close working between the industry leaders and these regional bodies is essential in developing new approaches and in understanding how public clients can work more effectively and efficiently together.

4.4 Encouraging Operational Collaboration

There is a huge potential to develop efficiency opportunities in the area of operational collaboration, building on existing HA and LA expertise. These include:

• Improving network management and operation by closer forward planning and liaison
• Jointly tackling health and safety initiatives
• Sharing supplier performance and appraisal techniques and data and joint supply chain management
• Jointly supporting implementation of Office of Government Commerce (OGC) Gateway processes
• Setting up joint client/ supplier communities - possibly regionally as well as nationally - to help drive continual improvement initiatives
• Development of project based insurance
• Sharing initiatives such as CAT and CAF and developing other joint initiatives such as a CAT approach for small and medium sized enterprises
• In conjunction with RCEs, development of regional procurement strategies for highways services and infrastructure, aligned to other service strategies
• In conjunction with RCEs, learning from the experience of delivery and procurement strategies in other Central Government and LA delivery areas
• Developing consistency in contract types, contract documentation and performance measurement and management (see also 4.6 below)
• Exploring and encouraging strategic alliances between highway authorities
• Better understanding, planning and management of the demand for public sector roads services.
• Exploring opportunities for joint client delivery, including programming and planning.

4.5 Identifying, sharing and promoting best practice

This is likely to be the greatest area of collaborative opportunities for achieving efficiency gains - underpinned by robust performance measurement (see 4.6 below) and cultural development (see 4.2 above) regimes. Examples are likely to include:

• Identifying the optimal 'highways client' role in highway authorities
• Understanding risk and risk allocation
• Sustainability in construction practice (for example the recent Waste and Resources Action Plan (WRAP))
• Environmental protection and sustainability
• Developing alignment between the work of the highways benchmarking clubs
• Developing measures that relate to outcomes and outputs as well as inputs
• Finding opportunities to share and explore good practice and examples of best practice
• Development of good practice processes
• Understanding the costs of service delivery as opposed to the price paid
• Integration between client and supplier delivery teams (e.g. CAF)
• Adoption of common values and procedures between clients to unite the roads services and construction industry
• Reduced defects and better quality design
• Understanding the conditions for different procurement choices, e.g. Public Private Partnerships (PPPs) / Design Build Finance and Operate (DBFO) etc.

4.6 Developing a consistent approach to efficiency and performance measurement

Performance measurement of cost and quality / quantity of service delivery, aligned to delivery of customer requirements and an organisation's corporate objectives, is an essential component of driving forward a continual improvement strategy. The recent toolkit published by ODPM ("Toolkit for Measuring Roads Local Transport Efficiency Gains" - see www.rcoe.gov.uk) is aligned to the measurement framework in the new Code of Practice for Highways Maintenance, published by the Roads Board on 6th July 2005. This work illustrates that while there are differences between the objectives of different parts of the road network there are also clear strategic and operational similarities.

However, there are many practical and cultural differences in the ways in which highways clients actually measure performance and, in order to objectively evaluate and share best practice, a more uniform approach to measurement is essential. The CoP and the Toolkit provide a useful starting point. The Highways Agency will be taking forward an important piece of work to improve its understanding of best value and how this could deliver improved customer service on the network.

Various performance measurement, benchmarking and best value organisations exist to assist delivery of continual improvement. Their objectives are similar but their approaches are not entirely aligned and communications between clubs is limited. Bringing these approaches and organisations closer together is seen as a primary strategic objective. A common understanding of best practice measurement would also assist the Audit Commission in reviewing local authority performance and in verifying efficiency claims.

Other, more detailed proposals will include:

• Using measures which focus on customer needs and expectations
• Measuring outcomes rather than outputs
• Relating delivery performance to planning and budgeting processes
• Measuring the real cost of service or infrastructure provision rather than payments or 'unit rates'
• Relating delivery performance to continual improvement of people (e.g. skills, and culture), tools and delivery processes

4.7 Communicating Effectively

Communication will be at the heart of the delivery of this Strategy. The Liaison Group will act as a conduit for the views of the HA, local authorities, suppliers and other industry and representative partners. A variety of media such as the web, technical press, seminars and conferences, workshops and through direct, individual and group, contacts, will be used to share efficiency messages and good practice.

Where appropriate, the Agency will seek to demonstrate connection between the efficiency improvement work of the highways industry and activities by other relevant change agents, including encouraging mutual development and identifying synergy and encouraging joint initiatives where there may be potential benefi t for improved efficiency in roads procurement.

The Agency, as guided by the Liaison Group, will work with Government and Non- Government Organisations which are working with LAs in respect of other service areas, including DfT and ODPM working groups and OGC, to ensure a consistent message. A communication plan is being developed with an element specifically focusing on documenting and publishing information on clients' experiences of best practice and the advantages gained from new forms of contract.