Greater commercial focus and changes to governance structure are the key to delivering savings, report says
The Highways Agency should be reshaped and given more independence to procure five year programmes of work, an independent review of the management of the road network in Britain has concluded.
The review, written by non-executive chair of the Highways Agency Alan Cook for the Department for Transport (DfT), said the Highways Agency should be given a five-year funding settlement and a set of clear expectations from government to develop “a much more business-like relationship” based on a contract between the road management agency and government.
“The close proximity of the Agency to the DfT means that there has historically been little pressure for the government to take, or stick to, long-term decisions for investment in the network,” the report said.
Cook said the proposed approach would bring the management of the roads more in line with the management of other infrastructure sectors, such as rail, although the Agency would remain accountable to government as its sole share holder.
The review added a more independent Highways Agency would deliver savings above the year-on-year savings required by the Treasury.
The Treasury has set the Department for Transport a target of reducing spending on roads by 20% over the next four years.
Cook said that there was the potential to deliver £200m of savings annually in five years time if this approach was adopted.
The review recommended the agency be reformed with a largely non-executive board, a formally selected non-executive chair and greater commercial flexibility, free of ministerial intervention.
“This would create greater clarity of roles between the government as funder and ‘customer’ for the network, and the new board,” the review said.
The agency would have a greater commercial focus following the changes, argued Cook, which would allow it to achieve the government efficiency targets through better procurement.