Update on Highways England’s capital planning and asset management

2 February 2017

ORR published its first annual assessment of Highways England’s performance in July 2016. It was broadly positive, but we reported concerns that the company needs to establish more robust long-term plans for investment delivery and asset management.

Our update reports on progress in two areas:

  • Highways England’s development of a robust capital baseline plan; and
  • its work to improve asset management and information – with particular focus on road condition.

The report notes:

  • Highways England is revising its plans about what capital projects it will deliver by 2020, their timings and expected costs. The revised plans, currently under development, are expected to mean a better spread of when schemes start, and should reduce disruption from roadworks for road users.
  • The updated plans may mean that some major improvement schemes are delayed or reviewed to make sure they deliver value for money. Highways England must agree the revised plans with government.
  • Highways England’s current forecast of capital costs – that is, costs of renewing and improving the network – is higher than its funding. Much of this difference is due to the company intentionally planning more work and expenditure than is funded in anticipation of some works being delayed or removed from the programme – which is an appropriate way to manage risk.
  • The company’s revised plans are likely to reduce, but not eliminate, the difference between current forecast costs and funding. The company must explain clearly how it will address the remaining difference.
  • Highways England was below its target for the condition of its road surface in 2015 16 due to deterioration in skid resistance. Road condition has since improved, but it remains below target. Highways England has committed to produce a road condition improvement plan.
  • Highways England must improve its processes to make sure that it has up-to-date information about the condition of roads, and that it reports performance in a timely way.

Our next annual assessment, providing a full review of the company’s operational performance in 2016-17, will be published in summer 2017.

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