Sixteen road projects at risk of being scrapped

Aaron Morby 5 years ago

Up to 16 major roads projects are at risk of being scrapped because they are not value for money, according to a report by the Government’s spending watchdog.

The National Audit Office revealed the plans were on hold in an assessment of progress on the Road Investment Strategy published today.

The report also warned that Highways England was struggling to deliver a step change in project starts because of challenges in recruitment of staff to cope with the increased workload.

Highways England plans to procure contracts for 57 projects this year, compared to six in 2016. But is 19% below its target headcount for procurement and commercial specialists who are in high demand.

It has been filling gaps with consultants and interim staff, who cost on average three times more than permanent employees.

The NAO blamed some of the agency’s budgetry and delivery problems on the Department for Transport’s rush to draw up the RIS in just 17 months, so it could be published before the May 2015 General Election.

This meant projects were selected without knowing whether they would be the best value.

The report also warns of a supply bottleneck and significant disruption to motorists if 54 of the 112 projects currently scheduled to start in 2019/20 go ahead.

Highways England is now reviewing the portfolio of enhancement projects to improve value for money, and has so far identified the 16 unnamed projects, which present a risk to value for money.

One is thought to be a controversial tunnel past Stonehenge.

The report says that Highways England and the Department are exploring several ways to manage risk, including revising project design, cancelling projects or delaying projects to enable further assessment of benefits.

Chiefs at Highways England have also developed options to bring forward the start dates of up to 10 projects and to delay up to 19 to reduce project starts in 2019-20.

£11.4bn RIS progress on 112 major projects

So far Highways England has completed six projects on or ahead of schedule and has started construction on a further 19, with 16 planned to be on or ahead of schedule.

It forecasts that these projects will be delivered 5% over budget.

Highways England met its efficiency savings target of £33m for 2015-16, and expects to exceed its target for 2016-17, but it has to achieve 70% of its savings target of £1.2bn in the final two years of the strategy.

Costs forecast to exceeds available capital funding by £841m, mainly due failure to account for post-project evaluations and IT investment.

Highways England chief executive Jim O’Sullivan said: “We are confident we will deliver our capital programme without overspending our budget.

“So far we have delivered nine schemes on time or ahead of schedule, with one of them, the M25 Junction 30, opening in December 2016 six months earlier than planned.

‘We will be publishing our delivery plan update in June laying out the programme for the current year and again we expect to deliver all of the required work.”

Amyas Morse, head of the National Audit Office, said: “The Department and Highways England need to agree a more realistic and affordable plan if they are to provide optimal value from the Road Investment Strategy.

“Decisive action needs to be taken before the updated delivery plan is published in the summer if shortcomings in the current strategy are not to be carried over into future road investment periods.”

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