Contact: Alan Giles, ext 7712

1. Introduction

1.1 This report explains the work carried out over the past couple of years to end the district agency arrangements for highway maintenance in Hampshire and to bring the work back under Hampshire County Council management. It also reviews the current arrangements for highway management activities in Hampshire and explains how the traffic management arrangements now work in partnership with the district councils.

2. History

Network Management Best Value Review

2.1 In 1999 Highways Network Management became one of the two service areas (along with Recreation and Heritage) to carry out a Pathfinder Best Value Review of its functions. The objective was to carry out the review, following the Best Value guidelines available at the time, prior to the introduction of formal Best Value requirements in April 2000. The results from the review would be treated as if it were an official Best Value Review, ie subject to District Auditor scrutiny and reported to Committee. The lessons learnt from the review would be used by other Hampshire County Council departments to guide their own Best Value reviews.

2.2 The functions carried out by the Highways Network Management Branch are extremely diverse and the Pathfinder Review identified a wide range of technical and managerial issues that needed to be addressed. The review also took into account the results of a MORI poll and local workshop, which identified several public concerns. However, underlying those issues were a number of key factors that needed to be addressed first. These centred on the longstanding agency agreements with the district councils, the inefficiencies of such arrangements and the confusion in the minds of the public with regard to highway responsibilities in Hampshire.

Blueprint for Agency Reorganisation

2.3 A report into the suggested way forward was made by the Network Management Board in conjunction with the District Chief Engineers' Group at the end of 2000. This report became known as the Blueprint for Agency Reorganisation.

2.4 Several key recommendations were made to the Policy and Resources Committee on 17 July 2001, following which the former County Surveyor was asked to put measures in hand to:

(i) arrange for the ending of the highway maintenance agency arrangements with the district councils;

(ii) provide for uniform arrangements for the traffic management service;

(iii) implement a county-wide highways Term Maintenance Contract; and

(iv) put in place a system of improved political involvement and consultation for both County and District Council Members with regard to highway maintenance and traffic management functions.

3. Planning for the New Arrangements

Project Management

3.1 A senior member of the Network Management Board was seconded full time to act as Project Manager for the planning and implementation of the Blueprint from September 2001. This enabled detailed planning to proceed on the project, which would involve:

(i) the review of the whole highways network management structure and the functions carried out;

(ii) a review of the job roles of 200 staff;

(iii) the potential transfer of over 60 staff from district to Hampshire County Council employment;

(iv) the establishment of Hampshire Highways teams in ten district council civic offices; and

(v) detailed consultation with County and District Council staff and Members, including supporting the Executive Member for Environment at a series of meetings with District Council Members to explain the new arrangements.

3.2 One major problem was that the original implementation date for the changes, April 2003, was considered too late by a number of districts, which wanted to transfer the highway maintenance functions back to Hampshire County Council by May 2002. This resulted in a project, originally estimated to require two years to properly accomplish, to be completed within eight months.

Structure

3.3 It was recognised at an early stage that an overall management structure similar to that which existed at that time at the Area Surveyors' offices would be a suitable starting point for re-structuring the management of the highways service. Given the geographical layout of Hampshire and the commitment made to district councils to maintain staff in each of the districts, it was decided to establish four main Highways Units, each responsible for two or three districts, at which local highway teams would be located. The arrangement involved the establishment of a new Highways Unit in the south, to manage Fareham, Gosport and Havant, and the expansion of the previous Area Surveyors' areas to incorporate the highway networks within the former agency districts in the north, east and west.

Joint Teams

3.4 Joint teams of Hampshire County Council and District Council staff were established to look at the various functions undertaken in Highways Management, to help determine at what level those functions were best carried out, eg centrally by the HQ team, at Highways Unit level or at a more local level. This provided guidance on staffing required at each of the management levels.

Staff Numbers

3.5 The staff numbers already employed in delivering the service were reviewed and, where possible, efficiency savings were made by combining teams together. However, due to the commitment to maintain highway teams in each of the district offices, not all of the possible efficiency savings could be achieved. This has particularly affected the numbers of reception and administration staff who need to be spread over 13 offices instead of just four.

3.6 Alongside the Blueprint changes to the highways agency arrangements, other changes to national legislation and codes of practice were taking place at the same time which would ultimately impact upon the functions carried out and the staffing levels required to do the work. For example, changes to the National Code of Practice for Highway Maintenance has meant that more staff are required to carry out highways inspections. As a consequence, the Highways Units are finding that the numbers of inspection staff originally provided for are insufficient to cope with the increased workload.

4. Implementation

Approval for Implementing the Blueprint

4.1 The recommendations for implementing the new arrangements were approved by the Executive Member for Environment on 15 April 2002. The first tranche of transfers (from Fareham, Gosport, Havant, Winchester and Test Valley) took place on 1 May 2002.

Staff Structure (Highways Management)

4.2 Initial investigations showed that under the previous agency arrangements at least 196 client staff full time equivalents (FTEs) (both County and District Council) were involved in delivering the Highways Management functions county-wide. Due to the numbers of part-time staff involved and difficulties in getting a clear understanding of staff responsibilities from some of the districts, the exact number of actual staff involved was difficult to verify. The new structure identified a need for 179 FTEs in the new structure, excluding those externally funded, eg from charges to public utility companies or other fees.

4.3 It was originally anticipated that of approximately 82 staff involved in Highway Maintenance works in the district agencies, 63 would transfer from the districts to Hampshire employment. There were 104 existing County Council staff who would remain in the structure, leaving approximately 12 vacancies to fill.

4.4 In the event, the staffing numbers were constantly fluctuating and as of 1 April 2003 (when the last agency, Rushmoor, ended) a total of 44 district staff had transferred, and 13 vacancies still remain to be filled in a total structure of 179. Additional temporary staff funded from outside the Management and Support budget have increased the total numbers to approximately 182. The Human Resources Section in the Environment Department was able to use its experience of TUPE transfers of staff into the Area 3 Motorway and Trunk Road partnership to assist with the transfers of staff from the district councils to Hampshire County Council. In addition, the reorganisation affected many existing County Council staff. This required a series of individual meetings with District and County Council staff to discuss transfer arrangements and terms and conditions. All this was on top of the normal day-to-day activities of the Human Resources section and the need to maintain a continuity of service.

Office Accommodation

4.5 The Highway Management Branch has worked closely with Project Managers from the Estates Practice team of the Property, Business and Regulatory Department, to negotiate and agree lease arrangements for the Hampshire Highways offices established in the various district civic offices. The only exception has been in Petersfield, where it was agreed to retain the Hampshire Highways East Hampshire team at the former Area Surveyors office, which was considered to be more central for the public than the East Hampshire District Council offices at Penns Place.

Information Technology and Telephone Provision

4.6 The establishment of Hampshire Highways teams in the district civic offices required the provision of IT2000 computer links (so that they could access the various IT systems necessary for their day-to-day work) and also the provision of Hampshire Public Service Network (HPSN) telephone links (to maintain easy accessibility to other highway offices). The provision of the links involved close liaison between the Network Management staff, district IT staff and a Project Manager appointed by IT Services. In some cases it was necessary to arrange the re-wiring of a number of district offices.

Joint Members' Panels

4.7 One of the needs identified in the Highways Network Management Pathfinder Review was to provide greater involvement and influence in the Highways Maintenance decision making processes for both County and District Council Members. This has been achieved through the formation of Highways Management Advisory Panels in each district. The joint Panels consist of all the County Council Members for a district and an equal number of District Council Members, together with the Executive Member for Environment. Panels meet twice a year and receive reports from the local Chief Engineer on highway-related activities taking place in the district. Generally, these relate to programmes of maintenance works and progress reports on other highways capital projects that are in the process of design or construction.

4.8 Members have the opportunity to ask questions and influence works and programmes. The Panels appear to be appreciated by both District and County Council Members and give a local ownership to highway matters that might otherwise be considered as being dealt with at a remote level.

Public Relations

Hampshire Highways

4.9 The Highways Network Management service has now adopted the "brand" name of Hampshire Highways, in order to give a corporate identity to the organisation. The name is also used by the highway Term Maintenance contractor, Raynesway Construction Southern Limited, on leaflets and notices issued to the public relating to highway maintenance works and will also appear on vehicles.

Public Enquiry Manager

4.10 An important factor in Hampshire Highways' dealings with the public is the system used to record and monitor correspondence and telephone calls relating to highway defect reports and other issues raised. An electronic system called Public Enquiry Manager (PEM) has recently been introduced for recording correspondence and telephone calls. The system also generates reply letters from standard templates and reports can be run to monitor different types of queries raised and items outstanding. Queries or defects reported by the public can be logged onto PEM at any of the Hampshire Highways offices regardless of the location of the caller or the defect, and then passed to the relevant member of staff at the correct office to be dealt with.

4.11 It would be fair to say that the PEM system would have been introduced anyway, regardless of the Blueprint changes. However, it is important to note that, without PEM, the provision of an integrated highway service and reception facilities that could easily transfer information between offices, which is an integral part of the Blueprint philosophy, would have been virtually impossible.

New Telephone Systems

4.12 The HPSN is a virtual telephone system that links all County and District Council offices to each other through a private telephone network. As well as reducing the cost of calls (since calls to other offices on the system are just treated as internal extensions) it has the major advantage of enabling a seamless service to be provided to the public, who can easily be transferred to another office or even another authority without having to re-dial.

4.13 As with PEM, the HPSN system has enabled seamless contact between the Hampshire Highways Offices, which was not possible with the former independent British Telecom telephone-based system.

4.14 In April 2003 a new single contact number for Hampshire Highways was implemented (0845 850 4422). Callers are automatically redirected to the nearest local Hampshire Highways office. Callers from mobile phones or out-of-county locations are redirected to office headquarters where the call is dealt with. This system considerably simplifies things for the public, who only have one number to deal with. Valuable experience is being gained in the use of the single telephone number and PEM system that may be very useful in the event of corporate initiatives relating to call centres.

5. Outstanding Issues

Traffic Management Arrangements

5.1 In accordance with the Blueprint proposals, the offer has been made to District Councils to undertake traffic management work in partnership with the County Council, on the same basis as operated previously in the full Agency Districts. Under these arrangements District Council officers act as the first point of contact for traffic management issues and District Councils have powers under an Agency Agreement to make Traffic Regulation Orders (TROs), subject to County Council approval where more important traffic routes (`County Interest Roads') are affected, or where reserved matters such as speed limits and lorry controls are involved.

5.2 These arrangements have been extended until September 2003 in the former full Agency Districts of Rushmoor, Eastleigh, Havant, Fareham and Gosport, pending the signing of a new Agency Agreement. At Basingstoke, Winchester and New Forest the District Councils have agreed in principle to take up these powers, and District Council officers are dealing with traffic management issues; although until an Agreement is signed TROs are still made by the County Council. The terms of new Agreements are being finalised with those District Councils wishing to take up these powers, and it is hoped that these will be signed shortly.

Grass and Tree Maintenance Works Done by District Councils

5.3 Although responsibility for structural highway maintenance has transferred from former district council agents to being directly managed by the County Council, several District Councils have expressed a wish to continue carrying out tree maintenance works themselves, and all wish to continue with highways urban grass cutting works on behalf of the County Council. There are economies of scale to be achieved where the District Councils are able to include urban verge grass cutting with their local amenity or council house grass cutting contracts. Most District Councils also enhance grass cutting work (eg by carrying out 10 to 15 cuts per year on urban highway verges, instead of the five cuts that the County Council would normally fund). The main problem has been that financial allocations for the work by the County Council in the past have been unclear and sometimes inconsistent between districts.

5.4 Some districts have decided to hand back tree maintenance works to the County Council, and the Arboriculture section is assessing the resource implications for taking back this work.

5.5 The continuation of tree and grass cutting maintenance by the District Councils would be beneficial from the County Council point of view. However, the financial reimbursement of the work by the County Council needs to be clarified and agreement reached with the District Councils. Discussions are presently taking place, and it is intended to try and reach agreement during the summer so that adequate provision can be made for the next financial year.

Blueprint Costs

One-off Set Up Costs

5.6 Set up costs for the Blueprint fell into two main categories:

(i) premises (including furniture, minor building alterations and moving costs, etc). Overall one-off premises costs for setting up Hampshire Highways teams in ten district offices amounted to approximately £125,000; and

(ii) IT costs (including new or modified wiring, IT equipment and IT Services' resource time in organising the work). IT costs for works in ten district offices amounted to £109,000.

Ongoing Costs

Staff

5.7 Staff costs relate to the additional costs to the County Council due to taking on former district staff under TUPE regulations, ie under their existing terms and conditions which included salaries, car leasing, etc. A total of 44 staff, equating to 42 FTEs (due to some staff being part-time) transferred from the district councils to County Council employment. Due to salaries and other terms and conditions being more favourable in some cases than for Hampshire staff in similar posts, the County Council had to pay an extra £88,000 in 2002/03 and will need to pay £149,000 per year thereafter (or until harmonisation is complete - see paragraph 5.12 Harmonisation below).

Premises

5.8 Ongoing costs for leasing of premises in ten district offices amounts to £211,400 per annum.

Information Technology

5.9 Ongoing costs for IT provision in ten district offices amounts to £88,000 per annum. However, about 75% of these costs would have occurred anyway, even if the staff had been based at County Council offices. Hence only approximately £22,000 could be considered to be due to establishing the teams in the district offices.

Total Ongoing Costs

5.10 The total ongoing costs for continuing to maintain Hampshire Highways teams in district council civic offices amounts to approximately £382,000 per annum.

Staffing Issues

Vacancies

5.11 In any large organisation there are always a number of vacancies at any one time and Hampshire Highways is no exception. However, filling vacancies is becoming more and more difficult, with posts remaining unfilled for longer periods and staff less qualified than desirable sometimes having to be employed. This is more true in the north of Hampshire, where potential staff are within easy commuting distance of London. There are also issues arising with Hampshire Highways staff working in district offices finding that district staff in similar jobs are higher paid than they. Until these issues are resolved the County Council will continue to have difficulties in filling vacancies and retaining staff. This will have a knock-on effect on the quality of service that Hampshire Highways is able to provide.

Harmonisation

5.12 There will come a time when staff transferred from the districts to the Hampshire Highway teams will need to be fully integrated into the Hampshire County Council pay and conditions structure. This process is known as harmonisation. It was considered that the best time for harmonisation to take place was when the Hampshire Pay and Benefits exercise is complete, which is likely to be spring 2004. It is likely that the harmonisation process will be similar to that which occurred during Local Government Reorganisation some years ago, and that existing district pay and benefits would be frozen for a number of years until County Council salaries catch up.

Development Control Review Implications

5.13 Although not strictly speaking part of the Blueprint reorganisation, the Development Control Review has possible implications for the Hampshire Highways teams. The main issues are the proposals to transfer staff dealing with Section 38 work to the County Council (this relates to the adoption of new estate roads, etc). This will require space to be found in each of the main Highways Unit offices for an additional two or three staff.

5.14 There are also implications for the way in which Highway Status Enquiries are dealt with. These relate to the check of whether a piece of land is public highway or not and is most commonly done when houses are sold. This work is currently undertaken by a mixture of County Council and District Council staff at several different locations, and it is hoped to centralise the work in Hampshire Highways headquarters, which will be better able to provide the required level of expertise and efficiency.

6. Conclusions

6.1 Planning and implementation of the Highways Agency Review (Blueprint) has been a very complicated and time consuming process. It has involved the transfer of many district staff to County Council employment, and the setting up of new highway teams in ten district civic offices with relocation of both District and County Council staff in many cases. The actual transition has been carried out with virtually no disruption to delivery of the day-to-day highway service to the public and elected Members of Hampshire. Small efficiency savings in staff numbers have been achieved, but the commitment to establish Highway Teams in most district civic offices has reduced the potential greater efficiency savings.

6.2 Ongoing running costs and the need for future harmonisation of former district staff to County Council terms and conditions remains an issue. Recruitment and retention problems continue to result in high vacancy levels that reduce the level of service that can be provided.

6.3 The development of improved telephone and computerised customer care systems has helped ease the setting up of the new Highway Teams and will continue to ensure that the County Council remains a leading authority with regard to e-government initiatives. The new Highways Management Advisory Panels are generally considered to be very successful.

6.4 The initial conclusions of the Highways Management Board are that, apart from a need for some relatively minor adjustments to the staffing structures, the Blueprint Highway Agency changes have been a success. There is now an integrated management structure in place for Highways Management county-wide, providing a consistency of standards. It is much easier for the public to contact a local Hampshire Highways Team and the queries raised can be effectively monitored by staff. The Joint Members' Panels enable regular formal contact between County and District Members and the local Chief Engineer.

Recommendation

That the Director of Environment report back to this Committee in autumn 2004 on the operation of the new Blueprint arrangements.

8094/AG