Real-term cuts take a toll on maintenance budget

11 April 2007

Hammersmith & Fulham London Borough Council’s planned maintenance programme is threatened by the squeezing of its revenue budget, underlining the need for a real term revenue increase in this autumn’s spending review.
The highways revenue budget has already been reduced, following the chancellor’s 2004 roads revenue freeze and accompanying demand for year-on-year ‘efficiency savings’. With the possibility of further real-term cuts, and the new local Conservative cabinet’s desire for annual council tax cuts, officials fear that planned maintenance could suffer.
‘I’m going to lose the budget leeway I’ve got,’ predicts Gordon Prangnell, Hammersmith & Fulham’s highways projects group manager. ‘You can’t get a quart out of a pint pot. Our overlay programme’s going to suffer.’
Situated in the west London arc of prosperity spanning from Chelsea to Heathrow Airport – the world’s busiest international hub – Hammersmith & Fulham is booming. Coca Cola, EMI, Disney and AOL are among the global giants based here, and while there is significant poverty, 15% of households have incomes of £60,000 or more, and there are whole rows of £1M-plus houses.
If Hammersmith & Fulham, with its solid tax base, growing population and expanding office space, has a shrinking road maintenance budget insufficient to tackle the backlog of road repairs, then what hope for local highway authorities elsewhere? For, while the borough’s capital funding from Transport for London – £2.8M over the past three years – has left its principal roads in an impressive state, there is no such external funding available for local roads or footways.
TfL is injecting a projected £124M into principal roads to clear the maintenance backlog. Hammersmith & Fulham is nearly there. Ten per cent of the network needs possible structural repair according to the latest survey, with some of the remaining stretches recently treated since the last inspections.
The results are there to see. A thin veneer of stone mastic asphalt has left the bulk of these principal roads with a smooth, ‘as-new’ surface over their solid concrete base. But the vast bulk of the local road network has not received such an increase in investment, with predictable results. Its condition is not improving, and could be getting worse.
While the highways team believes that the detailed visual inspection results should carry a serious health warning, what they suggest is not encouraging. The proportion of local roads needing structural repair increased from 8% to 26% in the last five years.
Footways are even worse. The Surveyor team found ugly, cracked paving slabs on the first side road it walked down. More than 40% are in such a state, according to the best value performance indicator.
While capital funding has been running at relatively high levels for a borough six miles square and with 1,000 streets – almost £8M in total over the past three years, thanks in part to developer contributions and parking account revenue – the department remains revenue poor. And it is getting poorer.
Last year, a £300,000 ‘efficiency saving’ more than cancelled out the annual increase that the department usually gets to cover construction inflation. It was left it with £130,000 less than in 2006/07 to deliver the same service.
In the event, there was still £270,000 left over after safety and other routine repairs were carried out. But if there are further reductions in revenue funding, it is likely to wipe out the current surplus, affecting routine and planned maintenance. This could happen if the chancellor insists on annual 3% ‘cashable’ efficiency savings and cuts revenue in real terms for highways for a further three years, and the council’s administration cuts council tax by 3% in 2008/09 and 2009/10. The £270,000 left over in 2006/07 topped up the capital budget for overlaying local roads, some of which were, until fairly recently, still overlaid with clinker waste – ‘probably from [nearby] Battersea Power Station,’ he said.
Planned maintenance schemes ‘make financial sense,’ said Prangnell. ‘For about £30,000 a street, we won’t need to do any routine maintenance for at least five years. If our revenue is squeezed further, this will affect our ability to get round the borough and do every street once every 25 years.’
He insists that the highways service is not inefficient. Risk-based inspections – where repairs of defects most likely to affect people are prioritised – saved an estimated £100,000 over the last financial year. Officers are to ask their contractor to see whether they, too, could make savings and do more for the same amount of money.
But ‘further cuts will affect the level of service,’ Prangnell warns. This would mean reducing inspections and response times, and possibly limiting the amount of non-emergency work.
Capital funding from TfL and developers has allowed the council to implement large-scale improvements: £4-5M on repaving each of three town centres with York Stone paving slabs and installing street furniture. But this adds to revenue repair costs. The new fountain outside Hammersmith’s Lyric Theatre is costing £30,000 a year to maintain – what it costs to overlay one local road.
Given the council has almost no scope to raise revenue locally, if the Treasury does not provide a real-term revenue increase this autumn, the number of roads that can be resurfaced each year will be cut.

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