Transport,
Economy, Environment and Enterprise
Overview and
Scrutiny Committee
17
October 2024
NY
Highways Performance and Progress
Report of the
Corporate Director - Environment
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1.0
Purpose of Report
1.1
To provide members
with an update on the progress and performance to date of NY
Highways (NYH), North Yorkshire Council’s company for the
operational delivery of highway services.
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2.0
Key Background Information
2.1
A highway delivery options exercise was undertaken in 2018/19 to
determine the mechanism for the operational delivery of highways
services. In April 2019 the Executive approved the
implementation of a wholly owned “Teckal company” to
deliver the highways operational services. A Teckal company
was recommended as the preferred way forward as this would provide
greater flexibility for the then North Yorkshire County Council
(NYCC). Future years capital budgets were unclear, it was clear
that innovation and efficiency needed to be a main driver for a
replacement Highway Maintenance Contract. Upon the approval
of the Teckal company a 5 Year Plan was developed which contained
the following goals:
·
2019/20 and 2020/21
Development of NY Highways (years 1 and 2)
·
2021/22 Implementation
of NY Highways (year 3)
·
2022/23 and 2023/24
Review performance of NY Highways (years 4 and 5)
2.2
NY Highways completed Year 5 of the 5 Year Plan during 2023/24 and
has continued to undertake collaborative reviews with North
Yorkshire Council (NYC) colleagues on current and future ways of
working that promote innovation and efficiency throughout its
services. This is the latest in a series of annual update
reports.
2.3
A number of achievements were recognised in the report to the
meeting of the Committee on 10 July 2023 relating to the 2022/23
year, including:
·
Budget savings for NYC
- £350k of efficiency savings for NYC in revenue
activities
·
Increase the
operational staff base and resilience
·
Apprentices
(employing) 14+ apprentices within 2022/23
·
“Lunch n
learn” events continued and are well attended from colleagues
and partners
·
The Staff restructure
was reviewed in December 2022, and changes implemented in January
2023
·
ISO accreditation
– work to achieve ISO 9001, 14001 & 45001
accreditation
·
Review Schedule of
Rates (SoRs) to drive out further efficiencies and benchmarking
against National Schedule of Rates
·
KaarbonTech Gully
emptying programme - 85% of the whole cyclic programme was
completed in 22/23 – a 10% improvement on the previous
year
·
Improvements in
responses to defects completed within prescribed timescales
improved dramatically in 22/23
·
Delivery of a high
quality effective winter service
·
Enhanced working
relationship between NYH and NYC staff
·
business opportunities
being explored
·
a significant step
towards better integrated and refined financial systems
2.4
In a similar
manner,NYH set out a number of initiatives for 2023/24, aimed to
add value to its business:
·
Increasing workforce
resilience (and skills)
·
Evolving the Health
and Safety Process
·
Further improvements
to finance systems to provide robust data management
·
Develop robust
contract procurement management systems (includes DPS)
·
Review of inherited
fleet
·
Identifying
opportunities for commercial trading
·
Recognising the need
for positive end to end Customer Interface
·
Working towards the
ambition for carbon neutrality and sustainable material
use
·
Conclude ISO
accreditation - ISO 9001, 14001 & 45001 accreditation for the
company,
·
Continue Apprentice
Development
·
Further NYC budget
savings (revenue)
·
Continue to develop
staff across the business to reach their full
potential.
·
Trial innovative and
new ways of working
·
Review Schedule of
Rates (SoRs) - Continue to undertake cost/value reporting to
enhance the accuracy of the cost base and drive out further
efficiencies.
3.0
Review of 2023/24
3.1
A review of the 2023/24 year has seen NYH achieve a number of
significant successes.
3.2
Budget savings for NYC - £1.9m of savings for NYC in revenue
activities during 2023/24 was achieved as a consequence of
efficiencies and reduced costs of delivery.
3.3
During 2023/24 a total of 24 Apprentices were employed across NY
Highways. 15 in the Operations Team, two in Commercial, six
in Fleet and one in Street Lighting. Of the 24 Apprentices
currently on the programme, 42% completed within quarter one of
2024, with a further 17% expected to complete within the financial
year.
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Apprenticeship
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Total Number of
Apprentices
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Business
Area
|
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Highways Maintenance
Skilled Operative (L2)
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14
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Operations
|
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Construction Quantity
Surveying Tech (L4)
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2
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Commercial
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Heavy Vehicle Service
and Maintenance Tech (L3)
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5
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Fleet
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Motor Vehicle Service
and Maintenance Tech – Light (L3)
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1
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Fleet
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Civil Engineering
Senior Tech (L4)
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1
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Operations
|
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Installation and
Maintenance Electrician (L3)
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1
|
Operations (Street
Lighting)
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3.4
Recruitment of high-quality operational staff continues to be a
challenge for the business due to a shortage of
construction/highway operatives. NYH is looking to attract
employees from other industries and re-train/up-skill them to meet
its staffing requirements.
3.5
During 2023/24 there has been an increase in the headcount and FTE
to reflect the growth in the business and increased NYC capital and
revenue spend. Correspondingly the vacancy rate has
reduced. The average age remains static and it is
representative of an aging workforce. NYH is aware of this
with discussions taking place for how the roles will be filled when
current postholders start to look to retire.
3.6
Sickness Absence for the core workforce in 2023/24 is higher
overall than the previous year, however days lost per FTE still
falls below the reported average of 5.7 days (ONS, April 2023).
Short term absence has reduced in Q4 from all other quarters and in
comparison to 2022/23, however long-term sickness absence has
increased making up 81% of the working days lost. Case management
is aiming to bring the figures down in 2024/25. Proactive
work including a review of the Attendance Management Policy,
regular conversations with managers and staff engagement sessions
will target bringing about a reduction in absence.
3.7
The Continued Professional Development (CPD) of staff has remained
a constant during 2023/24. A mix of staff, Operations Manager to
Operatives attended the Local Council Roads Innovation Group
(LCRIG) Innovation Festival where they were able to see new
products and techniques, along with meeting a range of suppliers
and subcontractors to the industry. This was supplemented by
a series of Lunch and Learn sessions which also included colleagues
from East Riding, City of York and Kirklees Councils. These
sessions included talks on Trenchless pipe repair, Surface
retexturing and sustainable kerb solutions and were made available
to all. Tarmac’s CPD session relating to sustainable
surfacing materials, techniques and equipment was also supplemented
with an invite to their mixing plant at Leeds to see first-hand the
information presented.
3.8
As per the Business Plan for 2023/24 ISO accreditation was achieved
for ISO 9001, 14001 & 45001. Gaining these accreditations
was critical in creating more tendering opportunities for NYH
within the Teckal operating model rules. Furthermore, having
Quality, Health Safety and Environment processes embedded in the
way NYH work provides confidence that robust audits and checks are
in place that minimise risk.
3.9
Review Schedule of Rates (SoRs) – NYH continue to undertake
cost/value analysis and reporting to enhance the accuracy of the
cost base and drive out further efficiencies and benchmarking
against the National Schedule of Rates is now being used as a
comparator. This allows a greater transparency and more accurate
means of measuring efficiency as opposed to comparison against
outdated inaccurate rates from previous contracts, especially as
some rates were loss-leaders where true costs may have been
balanced against cost recovery from other more profitable elements
of the wider contract.
3.10 Other
notable achievements include:
3.10.1
KaarbonTech Gully emptying programme - 93% of the whole cyclic
programme was completed in 2023/24 - a further improvement on the
previous year figure of 85%. Of those gullies attended, 92% did
need cleaning, showing the risk based / data-led programme is
effective.
3.10.2 Revenue
Maintenance works – response to defects completed within the
timescale set on works orders has improved dramatically in the last
two years. During the first year of NYH, less than 50% of works
orders were completed on time; since then, this figure has improved
month on month to a point where now 78% of repairs are completed on
(or before) time. Work to further improve this figure continues by
restructuring gangs as well as deploying a range of repair
techniques coupled with the introduction of expected output levels
linked to individual and team appraisal targets. There is also a
strong drive on right first time / fix once approach being
instilled into the workforce alongside ensuring the most
appropriate and cost-effective solution is enacted.
3.10.3
Successful delivery of capital works, including ongoing joint
working to improve management of the capital programme.
3.10.4 From an
environmental / sustainability initiatives perspective, during
2023/24 as part of our forward capital programme works we undertook
preparatory work to incorporate in-situ recycling as part of the
2024/25 highways capital annual programme, with one trial site
completed, one underway in mid September 2024 and a further site
planned to start in March 2025. In addition, following
research in 2023/24, we are trialling some recycled plastic kerbs
this current financial year.
3.11 A
review of objectives for 2023/24 contained in the NY Highways
Business Plan evidences:
·
Delivery of another
high quality and effective winter service during the 2023/24 season
and without significant incidents
·
internal client
relations have continued to mature culminating in a joint Team
Workshop that resulted in the identified continual improvement
initiatives to be delivered during 2024/25
·
Senior Management
appointments were made in the Operations Team and Business Support
Teams building on the one team approach by working with senior
Managers in NYC.
·
Significant progress
has been made culminating in more robust integrated and refined
financial systems to assist in more effective financial management
within NYH to allow more effective budget forecasting certainty in
NYC
·
A detailed review of
the current vehicle fleet commenced. It is anticipated new
vehicles will start to be procured during 2024/25. This is
part of an overall rolling replacement programme.
·
£1.9M of revenue
savings in addition to the shareholder value detailed
below.
·
Developing the core
skills of the workforce to deliver more works
internally.
·
Shareholder value
figures met expectations for 2023/24 as shown below
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Shareholder
Value
|
|
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Financial
Year:
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2023-24
|
|
Value
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£000
|
|
Profit/ (Loss) before
Tax
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113
|
|
NYC Support Service
Contracts
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1,430
|
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NYC Loan Financing
Interest
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1,235
|
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Total
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2,778
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4.0
Health and Safety
4.1
Health and Safety remains of paramount importance to NY
Highways. The table below shows that performance figures for
2023/24 were positive, with an improvement on previous years.
To drive these continual improvements and maintain focus, more
challenging targets were implemented for some key measures during
2023/24. The 2023/24 targets are shown in the table below
with the 2022/23 targets in brackets for reference. Targeted
campaigns were introduced to improve safety. For example,
particular focus was being placed on Driving at Work, Stress and
Preparedness for ISO Accreditation.
|
Safety
|
2023/24
Target
|
2023 Year end
figures
|
|
Accident Frequency
Rate
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0.25
(0.25)
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0.17
|
|
RIDDORS
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<15 (<
15)
|
0
|
|
Days lost to personal
injury accidents
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<170
(<350)
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25
|
|
% of Inspections and
Audits without a non-conformity
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>90%
(>85%)
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94%
|
|
% of Risk Assessment
Reviewed
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100%
(>90%)
|
100%
|
|
Number of missed
Occupational health monitoring appointments
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<5
(<5)
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0
|
|
Number of Health &
Safety campaigns
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4 (4)
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4
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5.0
Forward Look 2024/25
5.1
The 2024/25 NYH Business Plan describes the future aspirations of
the company, some of the key points being:
·
Providing value to the
Shareholder.
·
Achieving an External
works profit of greater than £100,000.
·
Securing works from
other public bodies or delivering revenue generating business from
another local authority
·
Development of an
NPORS certified Training Centre
·
Delivery of section 38
and 278 agreement works through Highway Development Services (HDS)
allowing HDS to achieve a profit through NYH of greater than
£50K
·
MOT Test Centre and
Increased Fleet offering internally and externally
·
Maintain Compliance to
ISO standards
·
Achieve above 85% of
defects fixed within Priority
·
Delivery of Capital
Works
·
Achieve greater than
90% of cyclical gully programme
·
Returning greater than
£800k of efficiencies back through NSR performance on capital
schemes
·
Reduce the carbon
footprint spend per £1 of turnover. Work on this continues,
with an assessment of 2023/24 showing an improvement with a Carbon
intensity value kgCO2e/£ of 0.033 compared with 0.039 in the
previous year (2022/23)
·
Ongoing review of
pricing structure for works including refinement of cost value
comparison and evaluating all rates from a first principal basis,
benchmarked against National Schedule of Rates
·
Following completion
of a detailed review of the current vehicle it is anticipated new
vehicles will start to be procured during Quarter 4 of
2024/25. This is part of an overall rolling replacement
programme.
·
Senior Leadership Team
depot visits have been introduced to keep workforce engaged in the
NYH ‘you said / we did’ Strategy. In addition,
specific Operative Forums have commenced, initially focused on
Gully emptying and Depot Management. These will allow the
sharing of best practice, remove inefficiency, and help in
identifying and addressing barriers to effective service
delivery.
6.0
Alternative Options Considered
6.1
As per para 2.1, the Teckal delivery model was approved as the
preferred way forward for delivery of the highways service,
therefore no alternative options have been considered as part of
this report.
7.0
Financial Implications
7.1
There are no financial implications arising directly as a result of
this report as it provides an update on progress. One of the
founding principles of the Teckal approach was, through closer
working with the Council, to deliver more for the same money or the
same for less money. As part of this philosophy,
the range of
options considered on an operational level is being continually
evaluated and evolved in order to ensure maximum efficiency and
value for money in how things are delivered on the ground (pothole
repair techniques, for example).
7.2
Revised rates and unit costs are being compared with the National
Schedule of Rates for such works in order to evidence value for
money as part of a suite of tangible metrics to be further
developed through 2024/25. In 2023/24, the council was credited
£1.9m from NY Highways which was generated through cost
reductions and efficiencies and enabled the Council to offset
pressures within the highways revenue budget and achieve the
savings included within the 23/24 budget.
7.3
Work is currently being undertaken to comprehensively capture both
cashable and non-cashable savings in order to fully evidence the
benefit of this truly collaborative approach.
8.0
Legal Implications
8.1
NYH is a “Teckal company” which means it is able to
trade with the Council, without the Council needing to go through a
procurement exercise, as well as external customers. NYH
meets all of the Procurement Regulations test for Teckal
Exemption.
9.0
Equalities Implications
9.1
An initial equalities
impact assessment form was completed and is included as Appendix A.
The assessment of this report concluded that there is no impact on
people with protected characteristics.
10.0
Climate Change Implications
10.1 A
Climate Change Impact Assessment has been undertaken and is
included as Appendix B.
11.0
Conclusion
11.1
During the fifth year of operation (2023/24) NYH continued on the
improvement journey meeting all substantial targets set in the
Business Plan. Continual improvement can be evidenced in the
core operational areas of Winter Maintenance, Management of Surface
Water (gully emptying) and providing timely repairs to defects and
delivery of the capital works programme.
11.2 The
core services are at the heart of the Teckal model and will
continue to remain a focus. It is also anticipated that during
2024/25 there will be increased non-highways / External
works. To help deliver shareholder value and is aligned to
the Teckal model. Delivery will be managed alongside
maintaining the core services. To avoid a conflict, a dedicated
team are being recruited to deliver this workload, thus mitigating
any impact on core services. NYH will be continuing to
provide the service that North Yorkshire requires to keep the
highway network safe and fit for purpose. This will be done
through robust processes that demonstrate the value of the Teckal
arrangement over other procurement routes.
11.3 NYH
will continue to focus on effective and efficient service delivery,
strong financial reporting, forecasting and budget control. In
addition, NYH will build and develop a workforce that is fit for
the future, using its Teckal position to deliver best in value for
North Yorkshire Council and in a wider trading environment. NYH in
2024/25 will have delivered works for NYC Property, NYC Parking,
NYC bereavement services, NYC Highway Development Services, NYNet,
and have tendered for a number of external commercial works. NYH
continues to offer NYC significant efficiencies in delivery through
a Teckal model.
11.4 NY
Highways (NYH) remains committed to making a meaningful, positive
impact on local communities by contributing to resilience, safety,
sustainable economic growth as well as respecting and enhancing the
environment.
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12.0
Recommendation
12.1
Members are requested to note the information within the report and
offer comments or suggestions where necessary.
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APPENDICES:
Appendix A –
Equalities Impact Screening Form
Appendix B –
Climate Change Impact Assessment
Karl
Battersby
Corporate Director
– Environment
County Hall
Northallerton
30 September
2024
Authors:
-
Nigel Smith, Head of
Highway Operations NYC
-
Barrie Mason,
Assistant Director - Highways and Transportation, Parking Services,
Street Scene, Parks and Grounds
-
Jamie Crumlish,
Managing Director - NY Highways
-
Brian Stanforth, Head
of Operations NY Highways
Background Papers
– Scrutiny Committee report of 10 July 2023 and 11 July
2022
For further
information please contact the author of the report
