News

Highways England’s new boss says industry has two years to to prove it can deliver

Future road spending to eclipse current plans is possible but only if Highways England and its supply chain are clearly seen to be delivering the current £15bn Road Investment Strategy. And that evidence has to be visible by year three of the programme in 2017/8, effectively just two years away, new Highways England boss Jim O’Sullivan said in his first interview.

“We are working on the biggest road capacity programme since the 1970s with RIS 1. If the economy continues to grow RIS 2 will be bigger. But that will depend on the successful delivery of RIS 1,” O’Sullivan said.

The Road Investment Strategy sets out plans to spend over £15bn in the six years to 2020/21. It is the first ever long term plan for developing the nation’s highways network and the Department for Transport has set out what it describes as a “deliberately ambitious” and demanding vision for Highways England to deliver.

“After six weeks in the job, however,  I am confident the Road Investment Strategy is deliverable but there are a number of organisations yet to be persuaded."

“Year 3 is the critical year (2017/18). That is when the workload really ramps up and when we are starting to negotiate RIS 2 with government,” O’Sullivan said. “By year three, we’ll have to have had a track record of delivery behind us.  But we need an organisation and a supply chain that is credible and looks like it can do the last two years of RIS 1.We have to be on programme and able to show that we are surrounded by an industry that is up for years four and five. Everything hinges on the people, equipment and organisational capability.”

Year 3 is when workload which has been settled at between £1bn and £1.5bn an year increases dramatically to £4bn a year, a huge step change for Highways England and its supply chain to manage.

“Delivering the Road Investment Strategy is absolutely vital. Especially when you consider the pressure on other sectors like Network Rail,” O’Sullivan said.

“After six weeks in the job, however,  I am confident it is deliverable but there are a number of organisations yet to be persuaded."

Keys to future success are having the right skills in Highways England and to develop effective collaboration with the supply chain, O’Sullivan said.

 “Long term contracts are a good thing but can lead to complacency. Our suppliers need to take  along term view of the market and upskill accordingly. They may lose out if they only upskill to the limit of the long term contracts allocated.”

“We need to have the right skills in the Highways England organisation, from recruiting apprentices to top management. And whatever we do internally needs to be reflected in the industry. There is no point in us being capable if they are not.”

The focus at Highways England is on upskilling existing staff, first and foremost, he said. And the organisation is looking to bring in supply chain expertise from outside the sector particularly to help develop collaborative partnerships such as those being set up for the Smart Motorways programme. 

“Collaborative partnerships are one of the ways you get the absolute maximum out of your resources,” O’Sullivan said. “I don’t want duplication and overlap. The idea of two guys doing the same job, one for the supplier and one for the client is duplication of effort and a waste of resource. Moving to a collaborative partnership, providing you can manage it effectively and efficiently, provides the best value for our customers – DfT and road users."

He is aware of the enthusiasm for long  term contracts in the supply chain but has some words of caution.

 “Long term contracts are a good thing but can lead to complacency. Our suppliers need to take a long term view of the market and upskill accordingly. They may lose out if they only upskill to the limit of the long term contracts allocated.”

In terms of dealing with ORR and oversight of delivery, there are issues ahead O’Sullivan, who was a non executive director of ORR for four years, explained.

"We can look at the Northern Powerhouse and if something, becomes a government priority then we can explain the impact to the RIS and that the work can be done with extra funding or rejigging programme.”

“The biggest challenge we face is we have a five year settlement for capital works but that opex is still government controlled and set on an annual basis. That’s a new challenge for ORR and for us.”

“We are also on a flight path to being funded by Vehicle Excise Duty and it has not been decided yet whether that will cover capex only or opex as well. We have got to reach a way of stabilising opex.”

A key deliverable in the years ahead is the smart motorway programme. Challenges include the A303 tunnel, A14 and deciding on the option for the Lower Thames Crossing near Dartford.

Changing government priorities are likely also to have to be managed, for instance the growing clamour for transport investment in the Northern Powerhouse region. DfT recently launched a study into a trans Pennine road tunnel.

“We have a five year portfolio of work that can be moved back and forward as we get planning,” O’Sullivan said. “And we can look at the Northern Powerhouse and if something, becomes a government priority then we can explain the impact to the RIS and that the work can be done with extra funding or rejigging programme.”

Read more from Jim O'Sullivan here

If you would like to contact Jackie Whitelaw about this, or any other story, please email jackie.whitelaw@infrastructure-intelligence.com.

Comments

The article mentions the very real problems that can be caused by partner suppliers being awarded long-term contracts. Japanese firms address this problem by contracting junior and senior partners. The junior partner will always be keen to impress; the senior partner can never become complacent about their status (whilst simultaneously having to treat the junior partner with fairness and respect, taking into account their mutual relationship with the client).
Jim. Great article in terms of 'can do' and realistic about potential barriers. In para 10 you mention " duplication of effort " in relation to " two guys doing the same job, one client-side and one supplier-side. I know this as MAN-MARKING. I am currently trying to tackle this issue. I am reliably informed by a number of well-respected, very experienced, very senior and highly qualified engineers that this scourge is currently costing £500m per £3.6bn investment. I am also informed that it is predominantly a UK-issue. Can you put me in touch with a ' shaker & mover ' with whom I might COLLABORATE in tackling man-marking and at least minimise its impact/cost to the public purse. It would go a long way, @ 15% , to more effective use of resources.Geoff