We've written before about the importance of the road network to manufacturers. Despite efforts in the past year local road quality continues to deteriorate, according to the annual local authority road maintenance (ALARM) survey.
The aggregate one time catch up cost for all local authorities (the amount it would cost to bring all roads up to an adequate level) has increased from £10.5bn in 2013 to a record £12bn this year. Last year's figure was also an increase on the £9.8bn reported in 2012.
This is partly driven by this year's severe winter weather but other factors have compounded the issue including:
- The number of local authorities which still lack a long term preventative maintenance plan, driven by a highways asset management plan
- The annual budgeting cycles of local authorities (as a result of the Government's own annual approach to the local authority finance settlement) reducing opportunities for economies of scale to be developed
- In addition, the annual budget cycle results in reduced planning for preventative (as opposed to reactive) maintenance. Planned maintenance is at least 20 times less expensive than reactive work
While local authority highways departments may be losing the war, in the past year they have won several battles. The report:
- Shows that the Department for Transport's Highway Maintenance Efficiency Programme has allowed greater knowledge sharing of best practice amongst authorities
- Gives the example of one local authority which, through moving to a long-term PFI structure, improved their overall network condition by 40% within the first year
- Shows that 60% of authorities have a highways asset management plan in place, allowing them to demonstrate the escalated cost of delaying repair to elected officials
As a result of this, the gap between what highways departments in England (excluding London) say they need to maintain adequate condition and what they got allocated by councillors has reduced significantly in the past year.
After a sharp increase in the annual shortfall to £741m in 2013 it fell this year to the lowest level recorded in the last decade at £587m.
But the results show there is still a long way to go:
- Just 60% of local authorities have a highways asset management plan, the local road network in England and Wales is a £400bn national asset a significant proportion of local authorities are mismanaging this asset
- 20% of local authority roads in England have less than 5 years remaining life based on present asset deterioration, another winter of bad weather would have a dramatic and expensive effect on local roads
- The average length of time between resurfacing local roads in England (excluding London) is 68 years, in 2013 this figure was 54 years. The recommended frequency of road resurfacing is between 10 and 20 years
As we blogged earlier this week, from 2015/16 the amount planned to be spent on transport infrastructure projects is set to increase markedly. Encouragingly the Government is looking to allocate a proportion of the budget for local road maintenance based on local authorities using asset management principles.
Additionally, this budget will be guaranteed for six years ensuring local authorities who wish to, can put in place multi-annual programmes to enable efficiencies to be achieved - this will be crucial as:
- Despite the increase, the budget from 2015/16 represents an average increase of just £193.4m per year against this year's estimated annual shortfall of £587m
- The increase in transport infrastructure spending is across the board, if the supply chain fails to effectively gear up, supply side inflation could see the purchasing power of increased budgets remaining static
- Local road maintenance funding is not ringfenced, while at the moment local authorities match the amount given to them by central government from their own budgets - with further cuts to local authority budgets expected a squeeze on local road maintenance spending is not unforeseen
Some local authorities have started to look to alternative sources of funding taking on board arguments from bodies such as the OECD which argue that it is 'better off borrowing to maintain roads compared with the alternative cost of deferring maintenance'.