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Chapter 3 Value for money
The OC contracts seek "to achieve the maximu efficiency in the use of the substantial sums of moneyexpended on the maintenance of the network"
Key points
Cyclic maintenance
These are repetitive activities carried out as necessary to ensure the safe operation and amenity of the network, rather than at set intervals.
- Overall the OCs' performance in cyclic maintenance was generally to a reasonable standard, indicating value for money ( VFM) was generally achieved.
- Litter control was good, with a noticeable improvement in SE.
Winter maintenance
Measuring response times, treatment times and salt spread rates on the network provides an insight into the OCs' winter maintenance performance and therefore weather-related road safety during the winter period.
- On the network as a whole, there was a 5% increase in the tonnage of precautionary salt used in 2004/05 by comparison with the previous year.
- By comparison with 2003/04, NE and NW spread significantly more precautionary salt, while SE, SW and M6 DBFO spread significantly less, reflecting weather conditions across the network.
- The highest precautionary salting rates were on some routes in NE and NW.
- KPI results indicated that all OCs are close to achieving their contract targets. While there has been improvement in some areas there has been slippage in others.
Works contracts
The Department invested £56m in works contracts in 2004/05. It is therefore important to ensure that this delivery of major investment is achieving VFM.
- The number of tenderers was similar to previous years and continues to be a good basis for competition.
- The average percentage difference between lowest and highest tenderer has reduced across the Units by 7% per year. This indicates tendering has become increasingly competitive.
- VFM was achieved in delivery of works contracts.
OC quality systems
The OCs' QMSs are crucial to the smooth running of the contracts. Value for money is therefore achieved by ensuring the quality of the service provided is in accordance with the specified requirements.
- The number of findings raised by PAG and the time taken by the OCs to close these out has reduced each year.
- The OCs have improved the performance of their QMSs as the contracts have progressed.
- KPIs have improved and default notices have reduced.
- QMSs are delivering VFM.
3.1 Cyclic maintenance
3.1.1 Background
Cyclic maintenance was carried out throughout the year to ensure the safe working condition of the network and to maintain visual standards. It is undertaken, in line with contract requirements, as either:
- A measured requirement ( e.g. a height limit) - litter picking and some grass cutting activities are examples.
or
- A planned programme of works as detailed in the contract - for example gully emptying and sign cleaning.
The OCs are paid for cyclic maintenance activities through monthly lump sum payments. The total spend in 2004/05 for this was 2% of overall spend on the network.
At the start of the contract, PAG identified between five and twelve control sites in each Unit to monitor the OCs' cyclic maintenance performance from April to October each year. PAG has continued to monitor these sites to examine the OCs' performance.
PAG's analysis of VFM for cyclic maintenance looked at the OCs' performance against the contract in the following activities:
- Grass cutting.
- Weed control.
- Road drainage.
- Road sign condition.
- Litter picking.
3.1.2. Findings
Grass cutting
The contract requirements for grass cutting are:
- Verge swathe and visibility areas shall be cut such that vegetation does not exceed 300mm.
- Amenity grassed areas shall, after the first cut of the season, be maintained to a height between 50 and 70mm.
- Full width verge shall have an annual cut between September and early October.
- Central reserves shall be cut twice during the season, in June and early September.
PAG's assessment of compliance with contract requirements was through visual inspections of grass height and, where practical, physical measurements of height. To produce the data for figure 10, an assessment was made at the control sites of the overall average grass height and the percentage that was within specification.
Figure 10Overall percentage of grass within specification
Figure 10 shows SE was generally very good throughout the year and its performance was comparable with last year. Performance in SW, NE and NW dipped in the middle months of the monitoring period, but recovered to a better standard by the end of the period. Overall performance across the network was marginally better than last year.
Weed control
The contract requires the OCs to treat specified areas to stop weeds becoming a nuisance, and to prevent the infestation of injurious weeds.
PAG monitors the effectiveness of weed control by visual inspections of filter drains, verge and central reserves on a monthly basis. The results are shown in figure 11.
Figure 11Average percentage of weed-free areas
The data collated during the monitoring period has been used to calculate an average compliance over the period for each OC. This information has been presented in figure 12.
Figure 12Average percentage compliance throughout the monitoring period
Unit | Average compliance for 2004/05 | 2003/04 |
|---|
NE | 73% | 73% |
|---|
NW | 80% | 86% |
|---|
SE | 71% | 73% |
|---|
SW | 85% | 75% |
|---|
Average | 82% | 75% |
|---|
Figures 11 and 12 reflect PAG's general observations of a continuing weed problem across much of the network, although there has been a noticeable improvement in SW when compared with last year's data. Injurious weeds including Ragwort were less evident across the network throughout the summer of 2004. In general, performance is similar to last year and there is still room for improvement.
Maintenance of filter drains was poorest in SE and NE, and SE also performed poorly in controlling weeds on the verges of the control sites.
Road drainage
The contract requires gullies and grips to be cleaned as necessary and gullies to be emptied at least once a year to ensure water can flow off the carriageway.
Throughout the monitoring period, PAG inspected the gullies, grips and channels at each control site to examine the OCs' performance. The results are shown in figure 13. As last year, the OCs have performed very well in maintaining gullies and grips but there is room for improvement in ensuring the channels are free from silt.
Figure 13Percentage of gullies, channels and grips clear
Road sign condition
The contract requires the OCs to keep road signs in good condition, to carry out detailed inspection/ maintenance and to clean the signs every two years.
PAG carried out visual inspections of the signs located in the control sites and the results are shown in figure 14.
Figure 14Percentage of signs in good condition
As in previous years, all the OCs performed very well in maintaining signs in a good condition during the monitoring period.
Litter picking
The OCs are only directly responsible for removing litter from motorways and special roads (certain dual carriageways). There are no motorways or special roads in NW. On all other roads on the network, the Local Cleansing Authority ( LCA) is responsible for removing litter. Nevertheless, the OCs are still responsible for advising the LCAs of any litter problems requiring attention.
To monitor the level of litter on the network, PAG uses the Environmental protection act ( EPA) classification system which grades litter levels into four categories A, B, C and D. EPA grade A represents the highest level of amenity, with minimal litter evident. EPA grade D is the lowest level of amenity, when there are large quantities of litter present.
The EPA specifies gradings for different types of area and a time limit within which the area should be returned to the appropriate grading if litter has accumulated. The EPA only requires action on roads if litter is at grades C or D.
Figures 15 and 16 show the overall performance in each Unit.
The OCs and LCAs performed very well, keeping almost all of their monitoring sites to EPA grade A throughout the year, with standards only occasionally dropping to EPA grade B. There was a noticeable improvement in SE, where in the previous year there had been a small percentage of sites at EPA grade C. Overall, standards were broadly comparable with last year.
Figure 15Overall litter control performance by OCs on motorways and special roads (no motorways or special roads in NW)
Figure 16Overall litter control performance by LCA on other roads
As could be anticipated, litter tended to be more of a problem in the more densely populated and heavily used southern Units than the more rural north. There were some litter blackspots on the network, particularly on urban motorways, that were not in the monitoring sites. PAG brought these to the OCs' attention and monitored their performance.
Amey continued to demonstrate its commitment to litter control through its membership of the 'people and places programme' of Keep Scotland Beautiful.
3.1.3 Summary of findings
From a review of the data collated at the control sites throughout the monitoring period, PAG considers:
- Overall, the performance of the OCs generally was to a reasonable standard, indicating VFM was achieved.
- Grass cutting was generally good in all Units and a marginal improvement on last year, despite a dip in performance in SW, NW and NE in the middle of the period.
- Weed control was disappointing in SE, NE and NW where standards were similar to last year, but improvements were observed in SW.
- Maintenance of gullies and grips, as well as road signs, was very good.
- The OCs continued to perform well in managing litter levels at the control sites.
3.2 Winter maintenance
3.2.1 Background
Winter maintenance is an important part of the OCs' contract responsibilities. Their performance has a direct influence on the safety of road users and is an area of considerable public, media and political interest.
The OCs' prime activities are precautionary and reactive salting, as well as snow ploughing. Precautionary salting is applied to the road surface in advance of forecast low temperatures. Reactive salting covers salting in conjunction with snow ploughing and treatments to footpaths and cycleways when snow is laying or ice has formed.
In addition, they are required to make decisions on necessary treatments to comply with the contract. The OCs are also required to gather information and maintain records of their winter maintenance activities.
Figure 17A96 North of Huntly in NE
Winter maintenance is undertaken on a lump sum payment basis. As this comprises around 3% of the overall spend on the network, it is important to ensure VFM is achieved. To do this, PAG has investigated the following over the 2004/05 winter:
- Precautionary salt usage.
- Precautionary salt application rate per route.
- Salt usage on night time patrols.
- Winter maintenance KPIs.
3.2.2 Findings
Precautionary salt usage
PAG reviewed the OCs' gritting action records to identify how much precautionary salt was applied to the network. As could be expected, precautionary salting rates varied between the contract requirement limits of 10g/m 2 and 40g/m 2 depending on the weather. A 20g/m 2 spread rate was the most common coverage applied by all four OCs and Autolink on the M6 DBFO.
Figure 18Winter conditions on A985 near Limekilns Junction in NE
Figure 19A gritter being loaded with salt at BEAR's Keith depot
To allow wider analysis a comparison was made between the precautionary salt spread over the winters of 2003/04 and 2004/05 (see figure 20 below).
Figure 20Precautionary salt usage in 2003/04 and 2004/05 winter seasons
Figure 20 shows:
- There was a 5% increase in the total precautionary salt spread on the network in 2004/05 winter season, compared with 2003/04.
- Compared with 2003/04, NE and NW spread significantly more precautionary salt (45% and 15% respectively) in 2004/05.
- By comparison, SE, SW and M6 DBFO spread less precautionary salt (4%, 21% and 43% respectively) than in the previous winter.
- The amount of precautionary salt spread reflects the geographical north-south divide of the Scottish trunk road network.
- The overall tonnage used in each Unit, broadly corresponds with its extent. NW, the longest Unit, used the most precautionary salt, while M6 DBFO, the shortest, used the least.
Precautionary salt application rate per route
Precautionary salting is unlikely to be identical across all routes in a Unit. PAG's detailed analysis of the OCs' records enabled the average precautionary salt spread rates to be calculated for individual routes on the network. These results are shown in Figure 21.
Figure 21Average precautionary salt spread rate across the network in 2004/05
Figure 21 shows:
- The highest precautionary spread rate of 1801-2100g/m 2 occurred on some routes in NE and NW.
- All routes in NE were treated on average with more than 1500g/m 2.
- Routes in NW varied more, with treatment levels in all four bands, possibly reflecting the varying topography of the Unit.
- All routes in SW fell into the lower two salting bands. This may reflect the wetter and milder climate of this part of the country. Higher precautionary spread rates were noted on some of the more inland sections.
- Treatments in SE varied between the middle two salting bands. The higher precautionary spread rates tended to be on the rural, hilly parts of the Unit.
- M6 DBFO received a similar average precautionary spread rate to adjacent trunk roads in SW.
- Average precautionary salt spread across the four OCs and M6 DBFO reflect the north/south weather divide as shown in figure 22 below. This table also highlights the high average precautionary salt spread implemented across the NE in the past winter.
Figure 22Average precautionary salt spread over the 2004/05 winter
Unit | Average salt spread over season (g/m 2) 04/05 |
|---|
NE | 1,885 |
|---|
NW | 1,580 |
|---|
SE | 1,493 |
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SW | 883 |
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M6 DBFO | 741 |
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Salt usage on night time patrols
Night time patrols are carried out by the OCs on contract-specified routes when the temperature drops below 4 oC between 10pm and 6am. The patrol season under the contract is from 1 November to 31 March.
Historically, the patrol routes have been considered to require extra scrutiny, in addition to the standard precautionary salting regime. The patrol's aim is to identify areas where ice is forming, or has already formed and take appropriate action to alleviate the problem. In comparison to precautionary salting, where the whole route is salted, patrols only apply salt where the driver or the control centre deem it necessary.
In NE and NW, BEAR primarily used 4x4 vehicles, with gritters on standby at the depots. One route in NW used a loaded gritter. In SE and SW, Amey's patrols were conducted in loaded gritters. Both these approaches comply with the contract.
Figure 23Gritter carrying out spot treatment on A68 near Fordel in SE
The OCs assisted PAG by supplying information on the tonnage of salt used on spot treatment during night-time patrols. This information is not required under the contract and had not been collected before. Figure 24 shows details of salt used during patrols:
Figure 24Salt used during night time patrols
Unit | Salt used during patrols (tonnes) 2004/05 |
|---|
NE | 0 |
|---|
NW | 129 |
|---|
SE | 94 |
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SW | 139 |
|---|
As can be seen from figure 24:
- Salt usage by NW, SE and SW was broadly comparable in scale.
- In comparison to precautionary salting, the tonnages used during night time patrols were very small. This is because:
- Salt is only spread where the control centre or the driver deem it necessary.
- Scheduled precautionary salting runs are often programmed to occur during the early evening, therefore there is often adequate salt coverage along the particular route when patrolling starts.
- Records indicate NE did not encounter any adverse conditions as a result of patrols, consequently it did not instruct any subsequent spot treatments.
Winter maintenance key performance indicators ( KPIs)
To measure the winter maintenance performance, two KPIs are published in each OC's monthly report. These are:
- KPI 05 - Winter maintenance response times This measures OC performance in commencing salt spreading on a specific route. Spreading must start within one hour of the decision to treat.
- KPI 06 - Winter maintenance treatment times
This measures OC performance in relation to completion of salt treatment on a specific route. The treatment must be completed within two hours of starting.
Both KPIs relate directly to contract requirements.
Figure 25Comparison of KPI 05 - winter maintenance response times - performance in 2003/04 and 2004/05
Figure 25 shows:
- Performance in NE (88%) and NW (79%) has declined from last year. The Department and PAG will monitor BEAR's performance to seek improvement.
- Amey's performance in SE and SW was excellent, with a KPI of 99% in both Units.
- SE also recorded the most noticeable improvement in performance, with a rise of 27% from 2003/04.
Figure 26Comparison of KPI 06 - winter maintenance treatment times - performance in 2003/04 and 2004/05
Figure 26 shows:
- SE (95%) showed strong performance and improved on last year.
- In NE (94%) and NW (87%) performance has dipped from last year. The Department and PAG will monitor BEAR's performance to seek improvement.
- SW (93%) maintained its performance from last year.
3.2.3 Summary of findings
- There was a greater amount of precautionary salt used in the 2004/05 winter season than in 2003/04 winter season.
- Both NE and NW recorded an increase in precautionary salt usage from 2003/04, while SE, SW and M6 DBFO recorded less salt usage. The average salt spread rate was highest in NE and lowest on M6 DBFO.
- Night time patrols in SW carried out the greatest number of spot gritting actions, while no spot gritting was considered necessary in NE.
- KPI results indicated all the OCs are close to achieving their contractual key performance targets. While there are improvements in some results, there has been slippage in others.
- Overall the above data suggests VFM is being achieved.
3.3 Works contracts
3.3.1 Background
PAG's detailed study examined works contracts which were awarded in the 2004/05 financial year, but were not necessarily completed before 31 March 2005. In total, there were 55 works contracts awarded with a total tender value of £56m. Of the 55 works contracts analysed, 26 were completed prior to the end of the financial year. This reflects the higher number of works contracts awarded towards the end of 2004/05. This is in line with additional budget allocation.
Figure 27 shows the breakdown of the works contracts in the study:
Figure 27Types of works contracts
Type of contract | No. |
|---|
Pavement structural repairs | 34 |
|---|
Minor improvements | 17 |
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Bridges | 3 |
|---|
Investigations | 1 |
|---|
The purpose of this study was to:
- Examine the tender process.
- Identify trends in tenders.
- Examine tender value and outturn costs.
3.3.2 Summary of findings
Tender process
- The average number of tenderers varied between 4.8 and 5.4 across the four Units. This is similar to previous years and continues to provide a good basis for competition.
Trends in tenders
- Tendering across all Units continues to be close, with the difference between the lowest and third lowest tenders being in the range of 11% to 16%.
- The average percentage difference between lowest and highest tenderer has been reducing as a whole (across the four Units) by 7% per year. Again, this indicates tendering has become increasingly competitive.
- The highest average award value was in SW at £1,512k. The lowest was in NW at £565k.
- SE had the highest and lowest award values, £3.56m and £88k, respectively.
- As in previous years, pre-tender estimates varied in accuracy, but the average value was conservative when compared with the tender values.
Works contracts
Works contracts are schemes generally valued above £150,000. These are put out to tender by the OCs on behalf of the Department.
The OCs act as engineer, designing and project managing the work as well as supervising construction. The contracts are between the successful tenderers and the Scottish Ministers.
A works contract scheme in SE on A1 Craighall to Wallyford
Tender value and outturn costs
- The average increase between tender award and scheme outturn values ranged from 7% in SW to 17% in NE.
Generally the study showed VFM was achieved.
3.4 OC quality systems
3.4.1 Background
The contracts require the OCs to operate a QMS to demonstrate and ensure everything they are responsible for is executed in accordance with the contract. The QMS must comply with the requirements of BSENISO 9001, but registration by a third party accreditation body is not a specified requirement. An environmental management system ( EMS) complying with the requirements of BSENISO 14001 is also required.
Taken together, the OCs' QMSs are used to manage the activities of almost 900 staff working across the network.
The OCs are paid a lump sum for the provision of the QMS and a monthly payment to maintain and operate it. Value for money is therefore achieved by ensuring the quality of the service provided is in accordance with the specified requirements.
The study looked at data from the start of the OC contracts to 2004/05. This enabled PAG to identify long-term trends in the OCs' operation of their QMSs.
In the early stages of the contract, money was withheld from the OCs until the QMSs were fully established. The monthly payments were also reduced when the OCs' QMSs were deemed not to meet the contract requirements.
During the mobilisation period for the contracts the OCs prepared documentation for their QMSs. These were reviewed by PAG and, following consent by the Department, the QMSs were implemented.
Early in the contracts, as they settled into their roles, all OCs found their documented systems required significant changes to correspond with the way their processes developed. This was to be expected as part of the continuous improvement culture.
BEAR has continued to transform and improve its QMS by adding staff resources, introducing a computerised system and creating an effective integrated management system ( IMS). BEAR is now seeking third party accreditation for its system in 2005/06.
Amey has continued to revise and improve its QMS. Amey has also strengthened its quality management team and developed an effective IMS.
A well performing QMS should ensure all of the OCs' processes are continuously improving. From the beginning of the contracts, PAG has audited the OCs against the contract and their QMSs in accordance with a strategy agreed with the Department. The strategy is reviewed annually, considering the OCs' performance, and revised as appropriate.
3.4.2 Findings
PAG audit findings
The most significant quantifiable performance measure available to PAG is the findings arising from auditing the OCs. A finding is raised when an OC is not complying with the contract requirements or its QMS.
A simple count of the findings is basic, but effective. This can be influenced by many factors, such as the number and type of audits conducted and the consistency of approach taken by the auditors. PAG is aware of these and has taken steps to minimise their influence.
Figure 28Number of PAG audit findings
Figure 28 shows the number of findings per year for each OC. This demonstrates the progressive improvement of the OCs and the significant improvements made by BEAR in 2003/04. It also mirrors PAG's view of the OCs' overall improvement in performance.
A closer examination of the findings, particularly the time taken to close out findings, is also illustrative.
Figure 29Time taken to close out findings
A summary of time taken to close out findings is shown in figure 29. The plot shows the maximum, minimum and median values of the times taken to close out findings in each year. The plot for individual OCs exhibits broadly similar characteristics and therefore only the aggregated values for all OCs is shown in this figure. This shows:
- The maximum time a finding is open has progressively reduced.
- Overall the time taken has reduced significantly.
The greater influence of the strengthened quality management teams has been positive, ensuring the OCs address issues arising from PAG audits.
OC internal audit findings
In addition to findings identified by PAG, all OCs register other issues including actions to:
- Correct a nonconformance.
- Prevent a nonconformance occurring.
- Improve the effectiveness of a process.
These issues are identified from many different sources including:
- Internal audits.
- Contract quality manager ( CQM) audits.
- Third party external audits.
- Monitoring activities.
- Site visits.
An analysis of the 1,600 issues raised by the OCs shows they have been extremely active in improving their systems. BEAR initially identified many issues of varying severity to be addressed and later became more selective, recording and addressing only those which were significant. Amey, on the other hand, initially recorded few issues, but later recorded and addressed a much wider range of issues. Both these approaches indicate an active QMS.
All the OCs now generally address the issues raised within an appropriate timescale.
KPIs
Another measure of the performance of the QMSs are the KPIs in the contract. They include indicators for the performance of the OCs' QMSs and are shown in figures 30 and 31.
Figure 30KPI 12 - Close out of findings from internal audits on time
Figure 31KPI 13 - Close out of findings from PAG audits on time
The KPIs show a generally improving trend, following an initial period of inconsistent results early in the contracts. There is, however, still room for improvement in many areas.
Default notices
Default notices are reserved for the most serious issues. They are a highly visible performance measure which is directly controlled by the Department.
The issues which are the subject of default notices are rarely directly attributable to the QMSs. Most default notices are only raised after the OCs' QMSs have failed to remedy an issue. An effective QMS should therefore reduce the number of default notices issued.
For all OCs there has been a general reduction in the number of default notices issued each year. Full details are given in section 4.3.3.
3.4.3 Summary of findings
The performance of the QMSs impacts on the ability of the OCs to deliver the contract requirements. It also affects the OCs' ability to demonstrate compliance with the contract.
All the performance measures presented in this study indicate that the OCs have improved the performance of their QMSs as the contracts have progressed.
The principal conclusions of the study are:
- The number of findings raised by PAG has reduced each year.
- The time taken by the OCs to close out PAG findings has reduced each year.
- The OCs' QMSs have been actively managed.
- The contract KPIs show a generally improving trend.
- The number of default notices has reduced.
Overall the study indicates VFM was achieved.
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