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Infrastructure in 2014: Responding to the roads revolution

A paradigm shift is happening in the roads sector that will see a radical change in the way the network is owned and managed.

“If you looked at the roads sector 10 years ago, it would be recognisable, but if you look 10 years ahead, it won’t be.” That’s the prediction of EC Harris head of highways Brian Fitzpatrick, who believes the sector is on the brink of massive change, caused by the convergence of some important societal factors.

“The change is being driven by a combination of events, including sustainability, austerity, technical developments, rising customer expectation and political will,” he says. “That convergence is leading to a different mind-set about how we manage assets, and I see a different paradigm emerging.”

It is a change that was acknowledged by the government in its Action for Roads: A network for the 21st century report published earlier this year, which set out plans to change the way the Highways Agency is run and its mission. The report also committed the government to giving more long term certainty, by identifying key projects and setting the Highways Agency’s budget for five years at a time, starting for the period from 2015/16 to 2020/21.

“We want to provide a guarantee that forthcoming work will not be disrupted by short-term fluctuations in funding,” says the report. “This will mean that the roads programme will be a clear commitment and not simply a statement of intent, and that maintenance, once planned, will go ahead.”

It confirms that the Highways Agency’s financial settlements will cover both capital spending and maintenance costs. “Certainty over the Agency’s capital budget will mean that it will be better able to plan ahead,” says the report. “This will mean quicker, more efficient delivery, as work will not need to deal with the threat of funding being removed at a critical stage in development. It will also be possible to make a sensible provision for the development of a pipeline of future work, ensuring long-term continuity in investment.”

The government says certainty over the maintenance budget will also allow the Agency to plan its work for maximum effect. “Instead of fixing roads whenever funding becomes available, they can plan long-term asset maintenance based on a clear understanding of what their resources will be,” it says, claiming this could save between 5% and 10% on the cost of maintenance.

“Government is moving from centralised, inefficient network control to a system with a thinner, leaner, more intelligent client”

Brian Fitzpatrick, EC Harris

Fitzpatrick applauds the move by government to release the Highways Agency from short term, annualised budgeting, but says the changes will present challenges for the supply chain, as the industry moves away from the responsive, “worst-first”, condition-based approach that has historically characterised maintenance spending. It could also lead to new players coming into the UK highways sector, he says.

“Government is moving from centralised, inefficient network control to a system with a thinner, leaner, more intelligent client,” he explains. “That will inevitably mean a transfer of risk - and of the innovation challenge - to the supply chain.”

In turn, he says, this will lead to new ways of owning, operating and maintaining the roads, with organisations involved in those activities having to invest and take a financial stake in the network, as they do elsewhere in Europe.

Inevitably, this will lead to a shift in the skills needed in the supply chain, and, according to Fitzpatrick, a certain amount of consolidation and integration in the marketplace. He sees contractors being best placed to take advantage of the sector’s new direction, as they are capable of raising the necessary investment and understanding of what is involved in maintaining the network, and will either take over consultants or buy in specific engineering when required.

“All of this change means that different skill sets and responses will be required by some of these organisations, and that’s where the consultancy market is going to be going,” he predicts. “You might start as an engineer, and all you do is design or cost consultancy. But now you will have to starting thinking about the whole lifecycle of the network, and understand contract and payment needs, and asset management issues, as well as understanding the materials.

“It’s a fantastic time to be an engineer, and hopefully we will see a renaissance of engineering and the value it can contribute to our everyday lives.”

Fitzpatrick anticipates that, once the UK’s inter-urban routes have been brought up to reasonable standard, these same big players will then look at taking the skills they have acquired in understanding the lifecycles of assets and managing networks into the big cities. Here, roads have traditionally also been subject to short term political cycles, and the pressure to act responsively when a section of road is in a poor condition.

“There is no momentum yet around the application of asset management and life cycle thinking in the roads sector, but it is coming,” says Fitzpatrick. “Highway engineers are too condition-focused, but they need to start thinking about other things.”

He says that local authorities are particularly strongly influenced by annual budgets cycles and short term political pressures, and that they typically adopt a “condition-led” approach to budget setting and prioritisation of roads spending. He advocates, instead, an “investment-led” approach that involves considering a wide range of different investment options and comparing their impact over a longer lifecycle and across an entire network.

According to Fitzpatrick, this traditional condition-led approach to highway maintenance leads to a focus on short-term requirements, resulting in intermittent peaks of high expenditure to tackle the backlog when the condition of the road deteriorates too much. Instead, he says, local authorities should look at ways of smoothing out those peaks by taking account not only of the asset condition but also how critical the asset is and the true cost and impact on the road users.

“The government is not going to use real tolls on existing routes, but what is a new route, what is an upgraded route?”

Stephen Tarr, Balfour Beatty

This issue of the impact of maintenance (or lack of it) on road users is becoming increasingly important because - as in many other sectors - more notice is being taken of the opinions of the “customer”.

“We work with a lot of local authorities, and we see that in their satisfaction surveys roads and potholes appear in the top three every time,” says Fitzpatrick, who also highlights the ever-growing cost of insurance claims faced by councils as a result of damage caused by poorly maintained roads.

“Customers are becoming more vociferous in terms of their expectations, and rising customer expectation is forcing a response from councils,” he adds.

EC Harris is highlighting this issue among local authorities by posing the question “Is the road the customer?” - aimed at challenging the traditional condition-led orthodoxy and encouraging a shift towards focusing on end users. Another reason why users’ views are likely to be given more weight in future is, Fitzpatrick believes, because some form of road charging or tolling is inevitable for more of the UK’s road network- both on inter-urban roads and within cities.

“Users will become involved because they will have to pay to use roads,” he says.

The technology needed for more widespread road charging is already in place, and technology is one of the factors Fitzpatrick believes will force the paradigm shift he predicts in the way roads are built, run, funded, operated and maintained - be it driverless cars, intelligent transport systems or in-car GPS and anti-collision systems. But he says that many of the behavioural and procedural changes needed for this new way of thinking are already in evidence, and will be apparent in the way roads jobs are managed in the year ahead.

“There will certainly be a heightened focus on value for money from schemes being delivered in the industry next year, as well as on collaboration, commercial rigour and asset management,” he says, adding that the supply chain must be prepared to change. “We will see an emphasis on collaborative development, further risk transfer and innovation from the supply chain.”

 

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