Description
Hertfordshire Highways is a three-way alliance between Hertfordshire County Council, their design consultancy, Mouchel, and their works contractor, AmeyLafarge. The alliance commenced in 2002 to run for seven to 10 years and delivers highways management and maintenance for all local authority roads in the county. Extensions have been awarded and the alliance will continue to 2012.
Hertfordshire Highways is an integrated organisation with shared aims and business objectives. It offers a single point of responsibility in an end-to-end service with a vision to be acknowledged and recognised by the people of Hertfordshire and the wider community.
AmeyLafarge maintains over 4700km of highway, 1400 bridges, 132,000 street lights and 119,000 signs.
Efficiency & Innovation
Hertfordshire Highways wanted to establish an initiative to enable Hertfordshire County Council to achieve Gershon efficiency targets.
Formal contract extensions were negotiated collectively by the three partner organisations based on further reinforcing the current team approach. By extending this collaborative way of working, a mechanism has been designed in order to enable Hertfordshire County Council’s Gershon efficiency targets to be achieved within the highways service. This has resulted in a unique agreement within the alliance, where each party is equally sharing the risk for failing to achieve those efficiency targets, thereby influencing positive behaviours towards meeting them.
The alliance has a Performance Review Board (PRB), consisting of the contract manager for each of the three partners. The PRB has established and manages an efficiency ‘pot’ or holding account for the contract. This holding account receives contributions from all three partners as efficiency savings are generated and agreed.
Only savings which fall into the council’s definition of cashable efficiencies are allowed into the efficiency ‘pot’. In essence, these are savings which return identifiable cash sums to the council’s highways budget, and can be proven as such. Cashable efficiency savings are measured and reported in accordance with ‘Value for Money Gains – National Indicator 179’.
The ‘pot’ is set at £13m over the next four years, although the target for efficiency savings – and hence the target the alliance is working towards – has been set above this threshold. If the ‘pot’ fails to reach the £13m target, then any shortfall will be made up by the three partners, with each contributing an equal share. Should a surplus be achieved at the end of the four year period, this will be divided equally among the three alliance partners.
This pain/gain sharing solution ensures all parties are committed to working together to drive efficiency, rather than in silos. It places the responsibility and risk equally on all three partners, rather than on the council alone. The unique and ground-breaking arrangement underpinned a three year contract extension, running from October 2009 to September 2012. The extension was awarded by Hertfordshire County Council and agreed by the three partners.
The Hertfordshire Highways Alliance organised a staff engagement event in September 2008 to create a collaborative and proactive environment for generating and capturing efficiency ideas. Every employees on the contract is encouraged to submit ideas for generating efficiencies, however small. Each of the partners has its own efficiencies champion. These champions form part of an Efficiency Working Group which manages and coordinates the development of the best ideas into projects that deliver tangible efficiency savings.
All the submitted ideas are assessed by the PRB. Those which are deemed unfeasible or not economically viable are declined. Those which are considered worth pursuing are allocated either to project managers and sponsors for direct development and implementation, or to working groups for further investigation. The working groups produce feasibility studies for particular ideas, after which they will either be accepted and implemented, or declined.
Ultimately all the projects are monitored by the Efficiency Working Group. Progress is reported monthly to the PRB. Commercial representatives from each partner verify the savings derived from each implemented efficiency idea, and report these to the PRB before they are formally reported to the council.
Outcome
The alliance approach has ensured a lifecycle vision of efficiency savings, and there are a number of examples where the transfer of duties between the partners has generated efficiency savings. Hertfordshire Highways is currently in the process of implementing some 50 projects generated from the first 70 ideas submitted to help meet its efficiency savings target. The number of efficiency projects, and hence the predicted savings, continue to grow.
The involvement of staff across the board and from all three partners has been impressive from day one. There is confidence that the ‘pot’ target can be reached without harming or cutting services and that the new, more efficient way of working will enhance the working lives of all at Hertfordshire Highways.