The national roads monitor, the Office of Rail and Road (ORR), has outlined plans for holding National Highways to account in this £4.8bn interim funding year, before the start of the third road investment strategy in 2026.
National Highways will face greater scrutiny on unit and asset class costs in this interim year, although exactly how it will be held to account on key areas such as safety and delays is still being ironed out by ORR.
In a published letter to National Highways CEO Nick Harris, the ORR highlighted three areas where it would adapt its established approach under the Holding to Account Policy published in March 2020. There were; efficiency, renewals and action plans.
For renewals, the ORR has stated that there will be a change to reporting. Rather than reporting on an annual basis, the ORR will instead expect quarterly reports from National Highways.
It also states that it expects the trend of increasing share of renewals in the investment plan to continue into the third road period (RP3). Given this, it asked National Highways to adjust the information it provides to include the following:
- Updated suitable disaggregation of assets comparable to RP2.
- Forecasts of volume and/or activity per quarter (to be updated quarterly).
- Forecasts of costs per asset class (to be updated quarterly).
- Reasons for changes to plans and between plans versus actuals.
- Progress on renewals delivery for schemes >£50m.
Regarding action plans, National Highways will need to produce and deliver on action plans for two key performance indicators (KPIs): safety and delay.
It is also expected to report its progress on a quarterly basis to the ORR. These will be in addition to the Interim Period Delivery Plan (IPDP) requirements as per part 1.8 of the statutory directions and guidance outlined in the Department for Transport’s Interim Settlement.
There will also be a change to efficiency reporting, with the expectation that National Highways will put more emphasis on unit costs, activity metrics and ‘other measures of productivity’. However, ORR added that the details were still being discussed and that they ‘expect to agree the approach in due course’.
This falls in line with the KPI aims outlined in the Department for Transport's IPDP document which stated: ‘As this is only a one-year settlement the opportunities to deliver efficiencies are harder to achieve and evidence and would be a relatively small figure in comparison to previous Road Periods.
'The funding available for delivery of the Interim Settlement has been based on cost estimates that assume efficiencies will be delivered. National Highways will continue to demonstrate to ORR its continued work to identify and achieve efficiencies rather than hitting a specific target.’
Notably, there was no mention of when or how the reporting will take place, in contrast to the quarterly reporting that was specified for both renewals and action plans.
The ORR has been approached for comment.
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