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What did the review find?

The strategic roads network is the only major item of economic infrastructure in England still run by the civil service, with annual budgets set by the Department for Transport.

Its unique status and relationship with government do not reflect the wider interests of the economy or deliver the best value for money for taxpayers. Reasons for this include:

 the close proximity of the Agency to the DfT, which means that there has historically been little pressure for the Government to take, or stick to, long-term decisions for investment in the network;

 unlike in the regulated sectors, there is no continuous external pressure for efficiency;

 successive changes of approach and agenda, which have created duplications and inefficiencies between the Agency, its supply chain, and local authorities;

 perceptions of political pressure, and constraints on civil service recruitment and rewards, which have helped create an over-centralised working culture that is unnecessarily risk-averse; and

 the perceived need to secure flexible terms across the Agency’s business, which adds to costs and means that opportunities for efficiency from greater funding certainty have often been missed.

The report estimates that a programme of fundamental reform could generate efficiencies worth around £200 million a year after 5 years from maintenance and operation of the network, with further savings from the enhancements programme.

What does the report recommend?

The report makes a range of recommendations to the Department for Transport and to the Highways Agency’s Board, all of which are set out in the Executive Summary of the report. They include:

 The need for the DfT to be a more effective ‘customer’, clearly setting out its strategy for the network and taking a more outcome-based approach to specifying performance levels, alongside targets for financial efficiency modelled on the ‘RPI-X’ approach in the regulated sectors;

 That any specification needs to make firm commitments over a 5 year period, including a committed funding package, giving the Agency the flexibility to plan investment over the long-term and to obtain better value from its contractors by contracting with greater certainty;

 That the Government should focus on a new strategic role as the champion of the road user, ensuring that any specification clearly and transparently sets out the service levels and standards that road users should expect from the network, based on engagement with road users and representative bodies; and

 That the corporate status of the Agency should be reformed to make it a more arms length body, to provide a catalyst for building a more commercial culture in the organisation and to ‘lock in’ the benefits of longer term funding commitments.

Does the report recommend breaking up or abolishing the Highways Agency?

No. The report recommends a change in the corporate status of the Highways Agency, so that it is more independent of government. It would become a more businesslike organisation, with greater commercial autonomy and capability, facing a much tougher long-term performance challenge from the Government. A range of governance models could potentially achieve these goals.

The network provider would remain a national-level body, responsible for the operation, maintenance and enhancement of strategic roads across England – the report does not recommend breaking up these functions.

The above notes have been taken from the FAQ document published with the report.

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