NAO calls for urgent action to agree 'realistic' RIS delivery plan

 

The Government and Highways England urgently need to agree a more realistic delivery plan for the Road Investment Strategy (RIS), the National Audit Office (NAO) has warned.

In a new report, the NAO says that while the 2015-2020 RIS represents a significant improvement in the efficient management of the strategic road network, the speed with which the Department for Transport (DfT) designed it created risks to value for money and deliverability that have not been resolved, including an £800m cash shortfall.

”Local
Highways England chief executive Jim O’Sullivan

The report also points out that the DfT set a capital programme forecast to exceed funding by £652m and that by August 2016 the projected funding shortfall had increased to £841m.

The warning follows similar concerns expressed by regulator the Office of Rail and Road in a report last month.

The report covers 112 major road enhancement projects, such as smart motorway upgrades and upgrading single-carriageway A-roads to dual carriageway at a cost of around £8bn.

It says cost, staffing and timing issues in delivering the projects mean decisive action is needed before the summer to deliver optimal value from the RIS and avoid carrying over problems to the next road investment period.

NAO head Sir Amyas Morse said: ‘The Department and Highways England need to agree a more realistic and affordable plan if they are to provide optimal value from the Road Investment Strategy.

‘Highways England has been working to address the risks to deliverability, affordability and value for money that were present in 2015, but we are now nearly two years into the 5-year road investment period.’

The report points out that the DfT planned the RIS in 17 months, in order to publish it before the 2015 General Election.

It states: ‘As a result of this, the Department selected projects without knowing whether they would be the best value and 54 of the 112 projects are currently scheduled to start in 2019/20, which could cause significant disruption to motorists.’

Highways England chief executive Jim O’Sullivan said: ‘We are confident we will deliver our capital programme without overspending our budget. So far we have delivered nine schemes on time or ahead of schedule, with one of them, the M25 Junction 30, opening in December 2016 six months earlier than planned.

‘We will be publishing our delivery plan update in June laying out the programme for the current year and again we expect to deliver all of the required work.’

The NAO points out that Highways England met its efficiency savings target for 2015-16, and expects to exceed its target for 2016-17, but it has to achieve 70% of its savings target of £1.2bn in the final two years of the strategy.

It says the Government-owned company is also facing challenges in recruitment of staff to cope with the rising number of contracts.

Highways England has identified 16 projects that present a risk to value for money and with the DfT is exploring ways to manage this, including cancelling or delaying projects.

It has also developed options to bring forward the start dates of up to 10 projects and to delay up to 19 to reduce the number of projects due to start in 2019-20.

The NAO recommends that the DfT should also re-evaluate its approach to oversight of Highways England, which could include establishing a joint portfolio board like that which it uses to monitor Network Rail’s portfolio.

 

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