## Annual Assessment Of Highways England'S Performance

- April 2016- March 2017

## Annual Assessment Of Highways England'S Performance - April 2016 - March 2017

Presented to Parliament pursuant to section 10(8) of the Infrastructure Act 2015 Ordered by the House of Commons to be printed 19 July 2017 

## © Crown Copyright 2017

 
This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gsi.gov.uk Where we have identifed any third party copyright information you will need to obtain permission from the copyright holders concerned. This publication is available at www.gov.uk/government/publications Any enquiries regarding this publication should be sent to us at One Kemble Street, London, WC2B 4AN. Print ISBN 9781474145558 Web ISBN 9781474145565 ID P002881434 
07/17 
 OGL logo Printed on paper containing 75% recycled fbre content minimum Printed in the UK by the Williams Lea Group on behalf of the Controller of Her Majesty's Stationery Ofce April 2016 - March 2017Background image

## 1. Executive Summary Introduction

1.1  The Ofce of Rail and Road (ORR) 
independently monitors Highways England's management of the strategic road network - the motorways and main A-roads in England. 


1.2  In the Road Investment Strategy1 (RIS), 
government has set out the outcomes and 
investments that Highways England is required 
to deliver over the frst road period, from April 2015 to March 2020 (Road Period 1). We hold Highways England to account for its performance and efciency targets that are specifed in the RIS. Our focus is on securing better performance and value for money from the strategic road network, to beneft road users and the wider public. 
 
 
1.3  This is our annual assessment of Highways 
England's performance in 2016-17. We have found that, despite facing challenges from record levels of trafc on the network, Highways England has performed well, and largely met its requirements. 

## Four Key Messages For 2016-17

1. Highways England's performance remains good across a range of 
measures. 
Compared to other road networks casualty rates are low, and it is keeping trafc fowing while delivering major improvements. It is starting to be more efcient in the way it delivers. 

 
 
1.4  Highways England continues to focus on 
safety as a priority. It has a comprehensive fve-year health and safety plan, which it is delivering. Figures for the number of people killed or seriously injured (KSI) on the network in 2016 have not yet been published. However, changes to how road casualty data are recorded are likely to cause an increase in the number of reported serious injuries when the fgures are published in September 2017. This will impact Highways England's ability to meet its target of achieving a 40% reduction in the number of KSIs on the strategic road network by 2020. Despite this, the strategic road 
network has lower casualty rates than other roads in England. It is also one of the safest road networks internationally. 

 
 
1.5  In 2016-17, Highways England performed well 
in keeping trafc fowing. It has kept 98.4% of its network open to trafc against a target of 97%, similar to last year's performance. It has cleared 85.9% of incidents within an hour, 
which is slightly lower than in recent years, but 
still above the target of 85%. 
 
 
1.6  Highways England spent £3.1bn in 2016-17, 
including £2bn of capital investment. The company has reported £135m of capital efciencies during the year, bringing the total to £169m for Road Period 1, which is more than it had targeted. The company has developed its plans for how it will deliver the £1.2bn RIS1 target and the evidence supporting reported efciencies, though developing the evidence base remains work in progress. 
 
 
1.7  In 2016-17, Highways England started 
construction on eight major road improvement schemes, against a plan to start on four. It has opened seven major schemes for trafc, against a plan to open eight. 
 
 
2.  Highways England has missed its 
targets on road user satisfaction and network condition. 
It is putting in place plans to address shortfalls. These and other areas of performance need continued focus to deliver future targets. 
1.8  Road user satisfaction with the strategic road 
network was 89.1% in 2016-17. This is below the target of 90%, but in line with performance in the previous year. Highways England has demonstrated commitment to improve user satisfaction through actions taken in 2016-17 and must now set out clearer plans to maximise its chances of delivering the target. 

 
 
 
1.9  At the end of 2016-17, the proportion of network 
in good condition was at 94.3%, against a target of 95%. We investigated this issue and found that Highways England is managing any safety 


impact, and is now taking appropriate action to improve network condition. 


1.10  At the end of 2016-17, Highways England had 
mitigated 121 noise important areas towards its target of 1,150 by 2020. Over the next year, it will produce updated plans for how it will meet this target. It also has more work to do to set out clearly how many crossings for pedestrians, cyclists and other vulnerable road users it will deliver, and when. 

## 3.  Highways England Has Improved Its Planning Of Major Improvements.

 
It is in the process of proposing a revised baseline to government. 

1.11  During 2016-17, Highways England has reviewed 
how it will deliver capital investment during the remainder of the road period. It is developing better plans, which are aimed at reducing disruption for road users and delivering better value for money. As a result, some major improvement schemes may now be considered for delivery in the next road period, while other schemes may be brought forward. 

 


1.12  Highways England is now proposing its revised 
plans to government through the formal change control process. Its engagement with this process has improved during the year, 
but the rigour of its evidence on the need for, 
and impact of, change needs continued focus. Once its revised baseline plan is agreed, we expect it to be made publicly available. 
1.13  Highways England needs to ensure it can deliver 
this portfolio of enhancements whilst limiting any adverse impact on the performance targets. It is developing an improved approach to understanding and mitigating risks to delivery of the portfolio. Highways England will provide further evidence to us on its work to assess delivery risk during summer 2017 and we will report on its progress. 
  

 
1.14  We have carried out a review of how Highways 
England and its supply chain are positioned to deliver the RIS. This has identifed areas of 
good progress but also opportunities, such as reviewing whether the company can contract with the supply chain further in advance of scheme delivery to allow better resource planning. 

## 4.  Highways England Has Further Work To Do To Improve Its Asset Management.

It must demonstrate that it is efciently 
planning and delivering the right 
maintenance and renewals work to keep its 
network in good condition. 

  
1.15  Highways England is developing improved 
maintenance and renewals planning processes, which it will need to embed. It has reviewed its renewals reporting and identifed the need to improve the assurance of its data. We completed an in-depth review into Highways England's asset management delivery for pavement and structures in March 2017. Highways England is now developing a plan to respond to issues and recommendations made in this review. 
  
1.16  Highways England continues to have challenges 
in delivering a stable programme of renewals. In 2016-17, there was again a large increase in renewals activity in the fnal quarter of the year, when the company sought to catch up on under-delivery earlier in the year, and make 
use of funding available from paused work on 
the M20 lorry park. The company recognises that there is scope for further efciency improvements through smoothing its monthly profle of work and has taken account of this in its 2017-18 business planning. 

## Summary Of Performance



1.17  We measure Highways England's performance 
against the outcome in the RIS2. This sets out 
eight outcome areas, each with one or more key performance indicator as well as a number of performance indicators3. Delivery against each key performance indicator in 2015-16 and 2016­ 17, and our assessment for the remainder of the road period, is summarised in the table below using a red, amber, green (RAG) status. 

| Outcome                           | KPI and target          |
|-----------------------------------|-------------------------|
| Killed or seriously injured       | Making the              |
| network safer                     |                         |
| Target: 40% reduction by end      |                         |
| of 2020                           |                         |
| 2016 fgures delayed to            |                         |
| September 2017. Change            |                         |
| to data collection likely to      |                         |
| increase recorded KSIs.           |                         |
| 89.1% satisfaction.               |                         |
| Road user satisfaction            | Improving user          |
| satisfaction                      |                         |
| Target: 90% by March 2017         |                         |
| 98.4% availability.               |                         |
| Network availability              |                         |
| Target: 97% lane availability     |                         |
| Supporting the                    |                         |
| smooth fow of                     |                         |
| trafc                             |                         |
| Incident clearance                |                         |
| 85.9% cleared within              |                         |
| one hour.                         |                         |
|                                   | Target: 85% of motorway |
| incidents cleared within one hour |                         |
| 9.0s delay, which is              |                         |
| slightly higher than in           |                         |
| 2015-16.                          |                         |
| Encouraging                       |                         |
| economic                          |                         |
| growth                            |                         |
| Average delay (secs per           |                         |
| vehicle mile)                     |                         |
| Target: No target set             |                         |
| Noise important areas             |                         |
| mitigated                         |                         |
| 73 mitigated in 2016­              |                         |
| 17 (bringing RP1 total            |                         |
| to 121). Uncertainties            |                         |
| around future delivery.           |                         |
| Delivering                        |                         |
| better                            |                         |
| environmental                     |                         |
| outcomes                          |                         |
| Target: Mitigate at least 1,150   |                         |
| noise important areas by 2020     |                         |
| Improved biodiversity             |                         |
| Target: Publish biodiversity      |                         |
| action plan                       |                         |
| Management plans                  |                         |
| produced for 15 SSSIs.            |                         |
| New biodiversity metric           |                         |
| proposed.                         |                         |
| 20 new and 7 upgraded             |                         |
| crossings delivered in            |                         |
| 2016-17.                          |                         |
| Number of new and upgraded        |                         |
| crossings                         |                         |
| Target: No target set             |                         |
| Helping                           |                         |
| cyclists,                         |                         |
| walkers                           |                         |
| and other                         |                         |
| vulnerable                        |                         |
| users                             |                         |
| Capital expenditure savings       |                         |
| Achieving real                    |                         |
| efciency                          |                         |
| £135m of efciencies in            |                         |
| 2016-17. £169m in RIS1 to         |                         |
| date, which is 14% of the         |                         |
| target.                           |                         |
| Target: Savings of at least       |                         |
| £1.212 billion on capital         |                         |
| expenditure by 2019-20            |                         |
| Progress of work, relative to     |                         |
| delivery plan                     |                         |
| Target: No target set             |                         |
| Work started on 8                 |                         |
| schemes (target of 4).            |                         |
| 7 schemes open to trafc           |                         |
| (target of 8).                    |                         |
| Pavement condition                |                         |
| 94.3% requires no further         |                         |
| investigation.                    |                         |
| Keeping the                       |                         |
| network in                        |                         |
| good condition                    |                         |
| Target: 95% of pavement           |                         |
| requiring no further              |                         |
| investigation for possible        |                         |
| maintenance                       |                         |

Key:  = Delivery on track/clear plans in place for RP1  = Some risk to delivery of target/plans not fully established for RP1  = High risk to delivery of target/plans not in place for RP1 *In our 2015-16 assessment, we reported pavement condition as green. However, this was based on incorrect data received from Highways England and was subsequently revised to amber. 

RAG 2015-16 
RAG 2016-17 
RAG RP1 
Amber 
Amber 
Awaiting 
data 
Amber 
Amber 
Amber 
Green 
Green 
Green 
Green 
Green 
Green 
Amber 
Amber 
Amber 
Amber 
Amber 
Amber 
Green 
Green 
Green 
Amber 
Amber 
Amber 
Green 
Amber 
Green 
Green 
Amber 
Green 
Green* 
Amber 
Amber 
 

April 2016 - March 2017Background image

## 2.Highways England'S Performance Highways England'S Performance Remains Good Across A Range Of Measures

Compared to other road networks casualty rates are low, and it is keeping trafc fowing while delivering major improvements. It is starting to be more efcient in the way it delivers 


 
Safety 
-  It has delivered 20 safety schemes through 
its cycling, safety and integration ring-fenced
2.1 
A key priority for Highways England is to 
fund in 2016-17, and plans to increase the
improve safety for road users and workers on 
pace of delivery in 2017-18.
the strategic road network. It has shown strong commitment to improved safety throughout 
- Road casualty rates for 2015 (the most recent 
the organisation and it consistently identifes 
year available) show that Highways England's 
safety as one of its three imperatives. In 2016-17, 
roads are the safest nationally, and amongst 
the company demonstrated its continued focus 
the safest internationally. 
on safety. 
 
-  It has a comprehensive fve-year health and 
2.2 
Highways England has a key performance 
safety plan4, which includes 122 actions. 
indicator target to achieve a 40% reduction 
It is delivering well against the plan. For 
in the number of people killed or seriously 
example, it has rolled out health and safety 
injured on its network by 2020, compared to 
leadership and behavioural training across 
the 2005-09 average baseline. The Department 
the company. 
for Transport, which is responsible for producing road casualty statistics, has delayed


-  Our engagement with road safety 
publication of its 2016 road casualty statistics,
stakeholders has shown a broad consensus 
which are now expected to be available in
that Highways England is applying an 
September 20175.
appropriate focus to road safety. 
 
 
2.3  In the last year, many police forces have moved 
to a new system for reporting road casualty data. The new system automatically defnes the severity of injury (slight or serious) sufered by a casualty, based on the type of injury recorded by police ofcers. These changes have improved the quality of information, but are likely to result in more injuries being classifed as serious, and therefore an increase in the 
reported number of people killed or seriously 
injured on the network. 


2.4  Provisional fgures published by the Department 
for Transport in February 20176 show this 
increase in the reported number of killed or seriously injured, but more work is required to understand the underlying trend. The department estimates that police forces which have moved to the new system have had an increase in the number of serious injuries that is 10 to 15 per cent higher than those that have not. It will publish more detailed analysis on this change later in 2017. We will work closely with the department and Highways England to understand the conclusions from this work and how it impacts Highways England's ability to meet its safety target for RIS1. 
 
 
2.5  The target of reducing the number of people 
killed or seriously injured on the network by 40% remains challenging. Highways England needs to continue to build its understanding of how its actions contribute to improved safety on the network, and use this knowledge to prioritise future interventions. 
 
 
2.6  In 2016-17, Highways England has made 
progress against other safety performance 
indicators. It has completed work to assess the safety of its network, based on a star rating system, and is on track to achieve 90% of travel on 3-star roads by 2020. 
 
 
2.7  Accident frequency rates for both Highways 
England and supply chain staf have improved in 2016-17, although they remain above the company's internal targets. Highways England's fve-year health and safety plan includes a number of actions relating to road worker safety. For example, the company is undertaking work to understand how better signage and protection can reduce the risk to workers from vehicle incursions to roadworks. 

## Supporting The Smooth Fow Of Trafc

 
 
2.8  A smooth fowing strategic road network is 
vital to the economic health of the country 
and supports the timely movement of people and goods. The volume of trafc using the network means that we cannot expect free fowing conditions all of the time. However, Highways England must minimise the impact of roadworks and incidents on users.  
2.9  The company's performance in supporting the 


smooth fow of trafc is measured by two key performance indicators: network availability and 
incident clearance. In 2016-17, the company has 
performed well against both of these indicators, which are both rated as 'green'.  
  
2.10 Highways England has a target to ensure that  
lane availability does not fall below 97% in any rolling year. At the end of 2016-17, lane availability on the network was 98.4%, similar to performance last year (fgure 2.2). Highways England forecasts that performance will remain above target for the remainder of the frst road period. 
  
  
2.11  Highways England must also clear at least 
85% of incidents on the motorway within one hour. Year-end performance for this key performance indicator was 85.9% (fgure 2.3), which is slightly lower than last year, but still above the target. In 2016-17, approximately 49,000 incidents were recorded on the 
network, 5% more than in 2015-16. Despite this 
increase, Highways England cleared 2,100 more incidents in under one hour than it did in the previous year. The challenges associated with ongoing trafc growth on the network mean that the company should continue to build its understanding of how incident management can minimise delays for road users. 
2.12  Highways England's impact on economic 
growth is monitored by a key performance indicator which measures average delay per vehicle mile. Performance has been stable throughout 2016-17, at 9 seconds per vehicle mile, despite increased trafc on the network. There is no target for average delay, but 
because it has shown a small increase since 
2015-16 (8.9 seconds per vehicle mile), this key performance indicator is rated as 'amber'. 

## Achieving Real Efciency

  


2.13  Highways England spent £3.1bn in 2016-17, 
including £2.0bn of capital investment mainly 
on improvements to the network (£1.3bn) and renewals of infrastructure (£0.6bn). This was 2.4% higher than expenditure in 2015-16 and was £42m (1%) lower than funding agreed with the Department for Transport. The company has reported £135m of efciencies in 2016-17, bringing the cumulative efciency improvements to its capital programme in the frst two years of this road period to £169m. 
This exceeded the company's internal target 
by £30m. 
  
2.14  Highways England must deliver at least £1.2bn 
of efciency improvements by 2020. Reported efciencies in the frst two years represent 14% of this target so considerable work remains to achieve the key performance indicator requirement. The key performance indicator is rated 'amber' for Road Period 1 because of the challenging level of efciencies that remain to be delivered and risks associated with schemes that start construction at the end of Road Period. This has an impact on the certainty of the company's plans to deliver the more stretching efciency improvements required in later years of the Road Period. 
  
2.15  We have worked with Highways England to 
develop the evidence to support its efciency reporting over the past year. We discuss this in 
more detail in Annex C. 

## Major Investment Delivery

  
2.16  Highways England must progress 112 major 
improvement schemes during the frst road period. In 2016-17, it planned to start construction on four schemes and open eight to trafc. 
  
2.17  The company has started works on the four 
schemes as planned, one of which started 
ahead of schedule. In addition, it started construction on four schemes which were previously scheduled to start in 2019-20. This includes combining two adjacent schemes which were originally planned with diferent timetables but which will now be delivered as one to reduce the impact and delays caused by roadworks. 
  
2.18  Highways England opened six of the planned 
eight schemes to trafc during the year. Two were delayed. It also opened an additional scheme, which was originally planned for completion in 2017-18. Table 2.1 presents a summary of major schemes delivery in 2016-17. 

Construction 
phase 
Delivery in 
2016-17 
2016-17 
Delivery Plan Commitment 
Start of works 
4 schemes to start works during 
8 schemes started 
2016-17 
4 schemes brought forward from 2019-20 commitments 
Open for trafc 
8 schemes to open 
for trafc during 2016-17 
7 schemes 
opened for 
trafc (including one delivered 
early) 
2 schemes delayed 
- 
  

2.19  In March 2017, we completed an in-depth 
review of a sample of Highways England's major schemes. The sample consisted of ten major schemes and two "corridors" of multiple schemes. The work focused on identifying how the company is managing risks to delivery of its major schemes and identifying programme­ wide risks and opportunities. 
  
2.20  The review identifed areas of good practice, 
but also opportunities for Highways England to improve. For example: 
 
-  Highways England has robust processes for 
managing delivery of individual schemes, but it does not yet have robust processes for managing programmes or portfolios of schemes; 
 
-  Highways England is focused on delivering 
schemes on schedule, but this emphasis may be leading to behaviours which increase risks during delivery - for example, for some schemes in the sample it had procured construction works while design work was still in progress (with mitigating actions in place); and 

| Details                        |
|--------------------------------|
| 3 schemes on schedule          |
| 1 scheme ahead of its delivery |
| plan commitment for 2016-17    |
| 6 schemes on schedule          |
| 1 scheme brought forward from  |
| 2017-18 commitment             |
|                                |
|                                |
|                                |
|                                |
|                                |

-  Highways England has robust cost 
estimating processes but a number of the projects in the sample had signifcant variances in cost, value for money and schedule for a variety of reasons. 
  
2.21  Highways England engaged positively in our 
review and helped to make sure that it resulted in useful recommendations that it could put 
into action. It has now developed a draft plan 
to address the recommendations. 
  
2.22  In January 2017, we visited one of the schemes 
in the sample - the A21 Tonbridge to Pembury - to see frst-hand some of the issues raised. 

## Major Scheme Case Study - A21 Tonbridge To Pembury

 
-  The A21 Tonbridge to Pembury scheme is widening the route between the M25 and Hastings. This 
section of the A21 carries 35,000 vehicles per day - signifcantly higher than its original designed capacity. It also has a high accident frequency rate. 
 
-  The solution being delivered by Highways England completes the missing dual carriageway link and 
provides better fowing (grade-separated) junctions. It also provides improved cycle routes. 
 
-  The improvements aim to increase safety, reduce congestion and improve reliability of journey times. 
 
-  During our visit to the scheme, Highways England highlighted to us the importance of pre­
construction surveying and investigation to help reduce the risk of delays when on site. For example, the sensitive wooded site meant that it was difcult to undertake comprehensive ground 
investigations before construction. As a result, Highways England had to carry out signifcant extra 
work to address environmental concerns with contaminated land and to respond to on-site ground conditions. 
 
-  This has had an impact on the scheme's costs and completion date. Despite this, the scheme will be 
completed this summer and will deliver real benefts to road users. Background image

## Highways England Has Missed Its Targets On Road User Satisfaction And Network Condition

It is putting in place plans to address shortfalls. These and other areas of performance need continued focus to deliver future targets 

## User Satisfaction

  


2.23  It is important that Highways England delivers 
a service that meets road users' needs, and maintains high levels of satisfaction. Satisfaction is measured through regular surveys and is a 
key indicator of how the company is performing 
for the users of the network. 
 
2.24  Road user satisfaction with using the strategic 
road network was 89.1% in 2016-17. This is below the target of 90%, and also below last year's score of 89.3%. 
  
2.25 The overall satisfaction score is calculated 
by combining fve separate elements of satisfaction. Satisfaction with signage and safety were above 90%, while satisfaction with the upkeep of the network, journey times and roadworks management were all below 90%. 

## 

2.26  The question about satisfaction with roadworks 
management is only asked of respondents who experienced roadworks on their most recent trip, and it consistently scored the lowest of the fve elements in the satisfaction score. 
This poses a challenge for Highways England 
as more investment, and therefore more roadworks, is planned later in the road period. 

## 

2.27  We have worked closely with Highways England 
on a review of how it manages roadworks. This project considered the end-to-end process of how roadworks are planned, communicated and delivered. It looked for areas of internal (to Highways England) and external (from other road authorities or infrastructure providers) best practice that could be applied to further strengthen Highways England's approach. Highways England is considering the recommendations from the report, which we plan to publish alongside our annual benchmarking report later in the year. 
2.28  Highways England also focused on this area in 
  
2016-17 and its actions to improve roadworks satisfaction included: 
 
-  improving the accuracy of roadworks 
information on the Trafc England website;
 
- introducing customer-focused checklists of 
roadworks for trafc ofcers; 
 
-  performing customer audits of all major 
project roadworks between January and March 2017; and 
 
-  trialling higher speed limits through 
some roadworks. 
  
2.29  Despite these actions, satisfaction with 
roadworks fell slightly in 2016-17 from the previous year. This could be caused by a lag between Highways England's actions and their impact on user satisfaction. 
2.30 There are other instances where Highways 
2.32 Highways England has worked with Transport 
  
England has used insight from its user 
Focus to understand what its customers want, but 
surveys to try to improve user satisfaction, 
it does not currently have a clear understanding 
like the improvements it has made to variable 
of what drives the user satisfaction score, or 
message signs (see the case study below for 
the expected impact of its actions. Therefore, 
more details). 
this key performance indicator is rated 'amber' for Road Period 1. Highways England plans to
  
2.31 The company is committed to becoming 
develop its capability in this area during 2017-18.
more customer-focused. For example, it has 
This should help it target its actions to improve
embedded Customer Service Directors across 
user satisfaction, as part of its wider strategy
the business to help deliver its customer 
to improve overall customer service across the
service strategy and has taken steps to 
organisation. It needs to produce a recovery plan
improve its public correspondence. These are 
setting out what actions it is taking by when to
important for improving the overall customer 
improve performance compared to the target
experience, but are less likely to afect the 
level of 90%, and maintain this improved level of
key performance indicator directly. 
satisfaction. 

## Case Study: Improving Variable Message Signs

 
-  Highways England has used comments received from  
the National Road User Satisfaction Survey to identify improvements to its variable message signs (VMS) to provide clearer information to its customers.  
 
-  For example on its larger VMS, the company has  
replaced messages which state that there are 'minor' or 'long' delays with automated estimates of the length of delays. It also now automatically includes place names on VMS so that users can more easily understand where there is disruption on the network.  
 
-  The survey shows that VMS has a positive impact  
on user satisfaction. This is a good example of how Highways England can use insight from user surveys to identify and develop further improvements that beneft its users. It plans to build on this work by:  
 
-  rolling out estimated length of delay to smaller VMS; 
 
-  further improving travel time information - showing  
journey times to multiple destinations or by multiple routes on one sign;  
 
-  trialling diferent signage for unconfrmed incidents  
(for example, where there has been an accident reported, but this has not been confrmed by a trafc ofcer); and  
 
-  reviewing the amount of time that queue protection  
speed restrictions remain in place after a queue has cleared.  
  

## Network Condition

2.33  Highways England must keep its existing 
  
assets in a safe and serviceable condition to 
deliver the service that road users and wider stakeholders require. Network condition is a key performance indicator for the frst road period, and measures the percentage of road surface that does not require further investigation for possible maintenance. 
2.34  In March 2017, the network condition key 
  
performance indicator was at 94.3% against a target of 95%. Although this measure has 
increased from 92.3% at the start of the year, 
this means that company has missed its target in both 2015-16 and 2016-17. 
  
2.35  During 2016-17, Highways England provided 
updated information which showed that network condition at the end of 2015-16 was 92.3% - not 95.4% as it had previously reported. The fgure was below the target of 95% primarily due to low skid resistance measurements. We reported this in our "Update on Highways England's capital planning and asset management" report in 
February 20177. 
  
2.36  We worked with Highways England to 
investigate why network condition was below target and why the delay in reporting had occurred. We communicated the fndings from our investigation to Highways England. 
  
2.37  Our investigation found that the company 
was managing any safety impact of lower skid resistance. For example, it provided evidence 
that it was applying its standards which require mitigations such as putting up warning signs on sites where skid resistance is low and may result in an increased risk of collision. 
2.38  As a result of the investigation, Highways 
England has put in place a range of actions to improve its management of network condition and to improve the quality of its reporting. Its improvement plans include carrying out 
additional volumes of road renewal works to 
improve network condition. Our investigation found that Highways England had provided evidence of suitable plans to address the shortfall in network condition and the concerns over timely reporting. 
  
2.39  Our investigation also found that Highways 
England has recognised the need to report high quality and timely information and has put in place additional assurance processes to achieve this. For example, Highways England's 
 now signs of the performance data it 
publishes each year. 
  
2.40  Our investigation has led to Highways England 
and ORR achieving an improved understanding of the network condition metric, and Highways England has improved its processes for planning and managing road condition. 
  
2.41  Whilst Highways England has taken forward 
many of its actions, it did not fully deliver its planned volumes of additional renewals in 2016-17. It has now updated its plan for 2017-18, setting out its trajectory for reaching the target and the additional renewals that it is targeting at the worst performing part of its network. We are carrying out additional monitoring of its network condition improvement plans to make sure they are delivered. Network condition is rated 'amber' for Road Period 1. 

## Delivering Better Environmental Outcomes

  
2.42  Highways England has the opportunity to 
minimise the impact of the strategic road network on the environment, delivering better outcomes for those that live near the network and the population more widely. 
  
2.43  In 2016-17, Highways England has made 
progress in delivering the commitments set out in the Biodiversity Action Plan, which it published in June 2015. During 2016-17, 
it has worked closely with environmental 
stakeholders to develop a biodiversity metric. This was completed ahead of schedule. It has also produced management plans for 15 sites of special scientifc interest on its estate and approved around 300 biodiversity schemes through the biodiversity technical working group. This progress means that this key performance indicator is rated as 'green'.  
2.44 Highways England has a key performance  
indicator target to mitigate at least 1,150 noise important areas by 2020. At the end of 2016-17, the company had mitigated 121 noise important areas on its network, leaving a further 1,029 to be addressed in the next three years.  
  


2.45 In addition to resurfacing and noise barriers,  
  
Highways England plans to use noise insulation (ftting double glazing to noise afected 
properties) to mitigate around 850 noise 
important areas in the remainder of this road period. However, there are uncertainties around the timing and cost of this approach. 
2.46  At the end of March 2017, the company began a 
pilot scheme to ft noise insulation to properties in 100 noise important areas. We consider this key performance indicator target to be at risk until Highways England is able to use the results from this pilot to produce a more robust plan for how it will meet the target. 
  

 
2.47  The company has also informed us that 
resurfacing works carried out as part of the smart motorways programme will mitigate 
fewer noise important areas than originally expected. We have asked the company to provide us with more details of how it will address this shortfall. As a result of these uncertainties, and the large proportion of noise important areas that still have to be mitigated by 2020, we assess this key performance indicator as 'amber' - delivery is at risk for Road Period 1. 

## Oise Important Areas Mitigated By End 2016-17

2.48 In 2015-16, we identifed a number of actions  
  


Highways England should take to improve its performance in relation to litter on the network. It has responded to these actions in 2016-17. For example, the company published its updated litter strategy8 in June 2016. It has also provided us with evidence that it is working with stakeholders, such as Keep Britain Tidy, and has increased its focus on clearing litter 'hot-spots' on the network. 

## Helping Cyclists, Walkers And Other Vulnerable Users

  
2.49  The strategic road network impacts both 
those that use the network directly, and its neighbouring communities. The design and operation of the network can infuence the extent to which vulnerable users, such as cyclists, walkers, equestrians and motorcyclists can cross the network safely. 
  


2.50  Highways England has a key performance 
indicator to report the number of new 
and upgraded crossings it delivers. There 
is no target for this measure. In 2016-17, Highways England delivered 20 new and 7 upgraded crossings on the network. This takes the total number of crossings delivered in the frst two years of this road period to 231, of which 59 are new and 172 upgraded. The company also reports that it is on track to meet its commitment to deliver 150 cycling facilities and crossing points on the network in this road period. 
  
2.51  However, Highways England has yet to set 
out a clear plan for delivering crossings for the rest of this road period. The company also recognises that it has further work to do to improve the consistency and accuracy of the information it reports for this measure. This key performance indicator is therefore rated 'amber' for Road Period 1. 

## Case Study: Delivering Cycling Improvements



-  The A64 Askham Bryan cycle scheme in Yorkshire 
has been delivered using the ring-fenced fund for cycling, safety and integration. It provides an improved environment for cycling by upgrading the verge path between Tadcaster and Copmanthorpe and is part of the national cycle route linking Leeds and York. 
 
-  The scheme was completed in advance of the Tour 
de Yorkshire in April 2017, which was expected to 
increase the use of cycling facilities in the area. It forms part of the cycling network near Askham Bryan College and its 1,100 students. The scheme includes tactile paving to assist visually impaired pedestrians, and eight new crossings which beneft walkers and other vulnerable users. Images of cycling improvements

## Highways England Has Improved Its Planning Of Major Improvements

It is in the process of proposing a revised baseline plan to government 

  
2.52  Highways England's original delivery plan 
(2015-2020) committed to starting 112 schemes by end of the frst road period. In our annual assessment for 2015-16 we raised concerns that the company needed to do more to demonstrate that its plans for these schemes were robust and deliverable. 
  
2.53  During 2016-17, the company has been 
reviewing its baseline plan for its major 
schemes with a particular focus on their scope, value for money and impact on road user experience. For example, it has considered the best way of scheduling major schemes which impact on the same routes or geographical locations to reduce customer disruption (Highways England has called this the "corridor" approach). 
  
2.54  In February 2017, we published our report 
"Update on Highways England's capital 
planning and asset management"9 which set 
out the progress it had made in developing a more robust capital baseline plan. 
  
2.55  Highways England has progressed its review 
and is likely to propose changes to its baseline plan, possibly including: 
 
-  deferral of schemes where they do not 
currently demonstrate value for money. 
These would be reconsidered as options for delivery in the next road period; and 


-  changes to the schedule of schemes 
specifed in the RIS and / or Delivery Plan based on the corridor approach. A number of schemes may start earlier than originally planned, and others may start later, the majority of which would then begin construction in the next road period. 
  
2.56  Highways England is now reviewing its 
revised plans with government and is taking them through the formal change control process. Once its revised plans are agreed, we expect them to be made publicly available. 
  
2.57  The company needs to ensure it can deliver 
this portfolio of enhancements whilst limiting the impact on the performance targets. It has established a capital portfolio management ofce which is working to establish greater transparency and assurance around delivery of the portfolio. The ofce has implemented a programme of improvements to produce 
a draft revised baseline. We have also seen evidence that its work is improving 
understanding of risks to delivery and driving mitigating actions. 
  
2.58  In our Update Report, we reported that the 
company's forecast costs for its capital portfolio delivery were approximately £0.8bn higher than its funding for the road period. This diference included over-programming and contingency reserves, as part of the company's approach to managing risks. Following Highways England's review of its plans, the gap between forecast costs and funding is likely to reduce signifcantly. 
2.59  Highways England will provide further evidence 
to us on its work to assess delivery risk during summer 2017 and we will report on its progress. 
  

## Agreed Changes To The Ris

  


2.60  Highways England must agree all changes to 
the RIS through the Department for Transport's change control process. Our role is to review the proposed changes and provide advice to the department on their acceptability. We have been keen to promote the importance of a rigorous change control process. The company's engagement with this process has improved during the year, but the rigour of its evidence on the need for, and impact of, change needs continued focus. Figure 2.11 shows those agreed changes which have increased the company's baseline funding to date. 

## Future Delivery In The Frst Road Period

  
2.61  Of the 80 schemes that are planned to start 
construction between April 2017 and the end of the road period, Highways England reports that 77 are on, or ahead of, schedule and three are delayed. Of the 19 schemes that are planned to open for trafc, 16 are on schedule, two are delayed and one has changed. 

| Phase                                                   | 2016-17 delivery plan    |
|---------------------------------------------------------|--------------------------|
| commitment                                              |                          |
| (remainder of RP1)                                      |                          |
| 77 schemes forecast to start works on schedule or ahead |                          |
| of schedule                                             |                          |
| Start of                                                |                          |
| works                                                   |                          |
| 80*                                                     |                          |
| (subject to changes following revisions to the capital  |                          |
| baseline plan)                                          |                          |
| 3 schemes forecast to start works behind schedule or at |                          |
| risk                                                    |                          |
| 16 schemes forecast to open for trafc on schedule or    |                          |
| ahead of schedule                                       |                          |
| (subject to changes following revisions to the capital  |                          |
| baseline plan)                                          |                          |
| Open for                                                |                          |
| trafc                                                   |                          |
| 19*                                                     |                          |
| 2 schemes forecast to open for trafc behind schedule    |                          |
| 1 scheme changed (and 1 further scheme to open)         |                          |

*Detailed explanation given in Annex D, table D3 

## Highways England'S Supply Chain

  
2.62  Building on the work that we carried out last 
year, we have recently concluded our review of how Highways England is engaging its supply chain to minimise risks to delivery of the RIS. 
 
2.63  The review found that Highways England 
has made good progress against previous recommendations, for example it has: 
 
-  taken measures to improve its 
understanding of supply chain demand and capacity: improving its modelling of demand, carrying out a survey of supply chain skills and introducing contractual requirements on the number of apprenticeships; 
 
-  updated its procurement plan, providing the 
supply chain with added visibility of its future work; and 
 
-  taken action to align its procurement more 
closely with suppliers' ability to bid, including through its asset delivery contracts and its emerging approach to future major scheme procurement ("routes to market"). 

Progress 
RAG 

  
2.64  The review also recommended areas for 
further improvement, including: 
 
-  reviewing whether the company can contract 
with the supply chain further in advance of scheme delivery to allow better resource planning; 
 
-  considering ways to smooth the profle of 
work, both across operational and capital works, and with adjacent industries; and 
 
-  doing more to attract skilled people to the 
sector, for example by showcasing high profle projects. 
  


2.65  We valued the strong engagement of both 
Highways England and members of its supply chain in carrying out this review. Highways England has accepted the recommendations and is now developing its plans to address them. 

## Highways England Has Further Work To Do To Improve Its Asset Management

It must demonstrate that it is efciently planning and delivering the right maintenance and renewals work to keep its network in good condition 

  
2.66  Highways England is developing improved 
maintenance and renewals planning processes, which it will need to embed. It has reviewed its renewals reporting and identifed the need to improve the assurance of its data. 
  
2.67  We completed an in-depth review into 
Highways England's asset management delivery 
for pavement and structures in March 2017. 
The review focused on understanding whether Highways England was managing these assets to deliver its performance outcomes safely, sustainably and efciently. 
  
2.68  The review identifed some areas of good 
practice. For example, it found that Highways England's contractors have a well developed knowledge of the network and a good understanding of the need to maintain the safety of road users and road workers. It also identifed a number of opportunities for improvement. For example, it found that the company: 
 
-  needs to demonstrate a clear line of sight 
between its maintenance and renewals plans and its performance outcomes (such as network condition); 
 
-  should consider developing a more robust 
approach to planning, delivering and reporting renewals volumes; 
 
-  should consider developing improved 
strategic oversight of regional plans to balance risk across its network and minimise changes to budget allocations; and 
 
-  should consider the potential benefts of an 
independent assurance process to satisfy itself that performance, risk and costs are 
being reported accurately. 
  
2.69  Highways England engaged with the review 
constructively and is now developing a plan to respond to its recommendations. 
  
2.70  In 2016-17, Highways England continued to 
face challenges in delivering its renewals work in the most efcient way. During the year, it again spent signifcantly more on renewals in the fnal quarter (40% of annual expenditure), with a particular spike in March 2017. This is likely to lead to inefciency in the delivery of renewals because poor weather means that supply chain costs in winter are higher than in summer. Also, road surfaces that are laid in cold winter months are unlikely to last as long, therefore increasing whole life costs. 
  


2.71  Highways England has delivered signifcantly 
greater volumes of renewals of key asset types 
than it planned at the start of the year. This 
may refect a lack of robustness in the original volume plans - which would explain how this was achieved while only spending 4% above budget. 
2.72 The profle of volumes delivered compared 
2.73 The uneven monthly renewals profle 
  
to plan also shows a large increase in the fnal quarter of the year. Figure 2.14 shows the volume of pavement renewals in each quarter of 2016-17 as an example of this. The profles for many other asset categories show a similar trend. 
  
demonstrates that Highways England has more to do to move away from an annual planning and delivery approach and realise the full benefts of its fve-year funding settlement. It also indicates that the company needs to improve its capability in planning, contract management and forecasting for the remainder of the road period. The company has estimated 
that delivering a smoother monthly renewals 
profle could deliver efciency savings of around £30m in Road Period 1 from reducing lost time due to adverse weather and from lower contractor costs. 
  
2.74  Highways England recognises that it can make 
greater use of the funding fexibility provided by roads reform to improve efciency through the smoothing of its monthly profle of work. For 2017-18, Highways England has again set a fatter budget profle and believes its gradual rollout of the Asset Delivery model, which sees it taking greater direct control of renewals, will help it deliver in line with the plan. In future, we would like the company to examine, with the Department for Transport, what cultural and fnancial control barriers may still exist to the company delivering renewals efciently across the year. 

## Priorities For 2017-18

2.75  During 2016-17, Highways England has 
delivered its performance requirements in a number of areas and has taken steps to improve its capital baseline plan. But performance and plans in a number of areas can improve and there will need to be particular focus on making sure that plans for RIS2 are robust. In 2017-18, Highways England 
should focus on the following. 

## Performance Improvements

  


2.76  Highways England should make sure that it 
delivers its pavement condition improvement plan and brings network condition back to the target level. It should ensure that it is implementing plans which are targeted at improving user satisfaction. It will also need to deliver its pilot study to inform its plans for noise important areas. 

## Capital Baseline Delivery

  
2.77  Highways England must now fnalise its revised 
capital plan and agree it with government. It must take forward its review of deliverability and afordability and continue to take action to manage costs of the plan both in the frst road period and beyond. 
  
2.78  The company should also make sure it 
delivers on its plans to respond to the 
recommendations of our in-depth review of its major scheme delivery. 

## Improving Asset Management

2.79  Highways England is implementing plans to 
improve its asset management capability and is taking forwards workstreams to address the issues identifed in our in-depth review of its asset maintenance and renewals. It must deliver these plans and make progress in improving the profle of its renewals volumes and expenditure. 

## Data Quality And Assurance

2.80  To make informed assessments about 
  
Highways England's performance we need to have confdence that the information contained within the company's annual monitoring reporting statements is accurate and reliable. As explained within this report, we had concerns about the quality of some of the information within the 2015-16 statements, in particular, the network condition key performance indicator. Last year's statements also did not include sign-of by Highways England's Board, as had previously been agreed with the company. 

2.81  Highways England has developed improvement 
  
 
plans for its reporting and management of network condition. It has also made improvements to the assurance of the 2016-17 monitoring reporting statements, including 
oard sign-of. We remain concerned about 
aspects of Highways England's performance reporting, in particular that the published statements do not include some statements that we have required, including renewals unit costs. We will look to Highways England's Board to continue to focus on ensuring the quality of reporting of the company's performance as specifed in our monitoring reporting guidelines. 

## Planning For Ris2

2.82  Our focus will increasingly turn towards the 
  
development of the second Road Investment Strategy. A key area for us is ensuring that the strategy is supported by a robust evidence base. The key priority for Highways England in 2017-18 will be the production of the SRN Initial Report and the stakeholder engagement, research and analysis required to complete it. 

## Our Monitoring

2.83  We will continue to apply a risk-based approach 
  
to our monitoring and will focus our activity in 
priority areas including those identifed above. Our other priorities for 2017-18 are: 
 
-  reviewing Highways England's "asset delivery" 
approach to managing its assets. Under this approach, it takes greater ownership of its asset management plans. The asset delivery model is being rolled out as current asset service contracts reach their end; 
 
-  reviewing Highways England's use of its 
ring-fenced investment funds through an indepth review; and 
 
-  embedding a robust put proportionate 
approach to monitoring licence compliance. 

## Annex A: Background And Context

The strategic road network  
Highways England is the government-owned company which manages the motorways and main A roads in England (the strategic road network). In 
2014, government published its Road Investment Strategy (RIS). This specifed a set of outcomes and investments that Highways England is required to deliver over the frst road period, from April 2015 to March 2020 (Road Period 1). The Ofce of Rail and Road (ORR) independently monitors Highways England's performance against these requirements. Our annual assessment of Highways England provides transparency to stakeholders on the company's performance and delivery against: 

 
- the RIS performance specifcation; 
 
- the RIS investment plan; and 
 
- its licence conditions. 
Our assessment recognises that Highways England is in the process of implementing a signifcant change programme as it adjusts to its new role as a government-owned company. 

## How We Measure Highways England'S Performance



We measure Highways England's performance against the outcomes in the RIS Performance Specifcation. 

This sets out eight outcomes areas11, each with one or more key performance indicators (KPIs) as well as a number of performance indicators (PIs). 

## Trafc Growth

Trafc is at record levels, and continuing to grow. Following a pause during the recession, trafc on the strategic road network has grown by over 10% 
between 2010 and 2016 - double the growth rate on local roads. Despite the challenge presented by trafc growth, Highways England is continuing to manage, operate and deliver major improvements to its network. 


 
The Department for Transport forecasts that trafc on the strategic road network will continue to grow, by between 29% and 60%, between 2010 and 2040. This presents a challenge to Highways England in delivering its commitments in the frst road period and the company must manage the impacts on its outcome. 

## Annex B: Key Performance Indicators Outcome: Making The Network Safer



The Department for Transport has delayed publication of its road casualty statistics until September 2017. Therefore, we are unable to show performance against this key performance indicator in 2016. The chart below shows road casualty data up to 2015, when there were 1,784 KSIs on the strategic road network, including 226 deaths. 



We are aware that there has been a change in the way that police forces record road casualty data (discussed in chapter 2 of this report). The department will publish more detailed analysis on this change later in 2017. We will work closely with the department and Highways England to understand the implications of this work and how it impacts on Highways England's ability to meet its safety key performance indicator for RIS1. 

Casualty numbers for all-purpose trunk roads: 
The Department for Transport's road casualty statistics are used to monitor this performance indicator. Therefore, fgures for 2016 are not yet available. In 2015, there were 7,988 casualties (of all severities) recorded on Highways England's A-roads.  
Incident numbers on motorways: In 2016, there  
were 49,130 incidents recorded on Highways England's motorway network. This is 5.5% higher than the total recorded in the previous year. The growth of trafc on the network is likely to have contributed, at least in part, to this increase. 

Road safety investigations: In 2016-17, Highways  
England completed work to assess the safety of its network, based on a star rating system. It expects to meet its target of achieving 90% of travel on 3-star roads by 2020. 

Accident frequency rates: Highways England reports accident frequency rates through the established 'Reporting of Injuries, Diseases and Dangerous Occurrences Regulations' (RIDDOR) process. 



Accident frequency rates for both Highways England and supply chain staf have improved in 2016-17. However, they remain above Highways England's internal targets. For construction and maintenance workers in Highways England's supply chain, the accident frequency rate fell from 0.15 in 2015-16 to 0.11 in 2016-17. 

F

## Nd Maintenance Workers, 2012-13 To 2016-17

In Highways England's customer operations directorate - which covers the Trafc Ofce Service - the accident frequency rate fell from 0.77 in 2015-16 to 0.51 in 2016-17. Accident frequency rates for Highways England's customer operations directorate include a relatively small number of workers and fgures are therefore subject to considerable fuctuation between years. 

## Outcome: Improving User Satisfaction

Overall user satisfaction was 89.1% in 2016-17, below the target of 90% and lower than the 89.3% recorded in 2015-16. 

Satisfaction with the journey elements in NRUSS:  
The satisfaction scores come from the National Road Users Satisfaction Survey (NRUSS). Respondents are asked about their satisfaction with fve elements of their most recent trip on the SRN:  

 
- journey times; 
 
- roadworks management; 
 
-  general upkeep; 
 
- signage; and 
 
- safety. 
Figure B6 shows the satisfaction scores for these journey elements since 2012-13. Satisfaction with roadworks management is consistently lower than the other journey elements. Of the other four elements, journey time satisfaction has consistently been below 90%, while satisfaction with general upkeep, signage and safety has been above, or close to, 90%. This pattern was repeated in 2016-17. Satisfaction with signage and safety was above 90% but satisfaction with journey times, roadworks management and general upkeep was below 90%. 

Table B1 shows changes in satisfaction with the fve journey elements from 2015-16 to 2016-17 and estimates of how they afected the overall score. 

The biggest individual change was in roadworks management but this has a smaller efect on the overall score because only respondents that experienced roadworks on their most recent trip answer that question. 

| Journey elements    | Change    |
|---------------------|-----------|
| 2015-16 to          |           |
| 2016-17             |           |
| Estimated           |           |
| impact              |           |
| on overall          |           |
| satisfaction        |           |
| Journey time        |           |
| -0.7%               | -0.2%     |
| Roadworks           |           |
| -2.2%               | -0.1%     |
| General upkeep      |           |
| +0.3%               | +0.1%     |
| +0.1%               |           |
| Signage             |           |
| +0.6%               |           |
| -0.8%               | -0.2%     |
| Safety              |           |

NRUSS scores by location: The map in fgure 7 
shows a regional breakdown of NRUSS satisfaction scores. Satisfaction was above 90% in the East and the South West, but was below 90% in all of the other regions. The North West had the lowest satisfaction for the fourth consecutive year. 

NRUSS scores for motorways and all purpose trunk roads: Satisfaction with all purpose trunk roads increased 0.8 percentage points to 90.3% in 2016-17. But satisfaction on motorways fell 1 percentage point to 88.1%. 

## Outcome: Supporting The Smooth Fow Of Trafc

Network availability measures the percentage of road lanes that are available to trafc as a percentage of the total road lanes on the network, over a rolling year. At March 2017, lane availability on the strategic road network was 98.4%, above the target of 97%, and similar to performance in 2015-16. Highways England forecasts that availability will remain above 97% for the remainder of the road period In the rolling year to March 2016, Highways England cleared 85.9% of motorway incident within an hour. This is similar to last year's performance, and above the target of 85%. This target will become increasingly challenging if trafc growth causes the number of incidents on the network to increase over time. Highways England has undertaken further work during 2016-17 to better understand the reasons for incidents missing the one hour target so it can best target its interventions to ensure that performance remains above target.  



Trafc on the strategic road network: The volume of trafc on the strategic road network is at record levels, and increasing. In 2016, 91.9bn vehicle miles were travelled on the network, 2.5% more than in 2015. Since a pause in trafc growth during the economic downturn, volumes on the strategic road network have increased in each of the past seven years. 

Planning time index: The planning time index measures the additional time that road users would have to allow for their journey to arrive on time in 19 out of 20 journeys. It is measured by taking the ratio of the 95th percentile journey time to the free-fow journey time. In 2016-17, the planning time index was 1.68, which is higher than was recorded in 2015-16 (1.66). This indicates that the most delayed journeys on the network were worse in 2016-17 than in 2015-16. 

Acceptable journeys: This performance indicator measures the percentage of journeys that are above 75% of free-fowing speed. In 2016-17, 83.5% of journeys on the strategic road network were above 75% of the free-fow speed. This is slightly less than in the previous year, when 83.6% of journeys were above 75% of free-fow speed. 

Average speed: In 2016-17, the average speed for all journeys on the strategic road network was 59.5 miles per hour. This is faster than in 2015-16, when the average speed was 59.3 miles per hour. 

## Outcome: Encouraging Economic Growth

Average delay on the network is used to measure Highways England's impact on economic growth. There is no target associated with this indicator. In the rolling year to March 2017, average delay was 9 seconds per vehicle mile. This is equivalent to a trip of 100 miles taking 15 minutes longer than if the network has no congestion. 

Delay on the network in the latest year is slightly higher than in 2015-16, when a fgure of 8.9 seconds per vehicle mile was recorded. The monthly pattern of delay between the two years was very similar, as shown in fgure 12. 

Increasing trafc on the network, and delivery of the capital investment programme, present a challenge to managing delay throughout the remainder of this road period. During 2016-17, Highways England has continued to build a better understanding of the causes of delay on the network, and how its interventions can minimise the impact on road users. 

Average delay on gateway routes: Delay is also measured on gateway routes - a subset of the strategic road network which includes connections linking major population centres, or business and manufacturing sites, with the most important ports and airports, and rail freight services. Delay on gateway routes has also remained fairly constant since last year, although slightly lower than overall delay, at 8.2 seconds per vehicle mile. 

Responding to formal planning applications: 
Highways England's role as a major statutory consultee is monitored by the percentage of planning applications that it responds to within 21 days. In 2016-17, the company's performance was 99.8%; above the company's internal target of 99%. 

Spend on small and medium sized enterprises: 
In 2016-17, Highways England estimates that its expenditure on goods and services from small and medium sized businesses was 25.5%; above the government target of 25%. 

## Outcome: Delivering Better Environmental Outcomes

In 2016-17, Highways England mitigated trafc noise from the strategic road network in 73 noise important areas13, bringing the total for the frst road period to 121. Highways England must mitigate a further 1,029 in the fnal three years of the road period to meet the target of 1,150. 

| Complete       | Forecast    | Total    |
|----------------|-------------|----------|
| Resurfacing    | 113         |          |
| Major projects | 7           |          |
| Barriers*      | 1           |          |
| Insulation*    | -           | 850      |
| Total          | 121         | 1,060    |

*Delivered through environment ring-fenced funds  
Table 2 summarises the interventions (delivered and planned) that Highways England will use to meet this target during the frst road period. This shows that insulation (ftting double glazing to noise afected properties) is expected to account for the majority of noise important areas. Highways England awarded a contract to deliver this work in March 2017. As part of this, an initial pilot study is expected to mitigate approximately 100 noise important areas during 2017-18. We consider this target to be at risk until Highways England is able to use the results from this pilot to produce a more robust plan for how it will meet the target. The company has recently informed us that resurfacing works carried out as part of the smart motorways programme will mitigate fewer noise important areas than originally expected. We will work with the company to understand how this afects its plans to deliver the target. 

|   84  |   197  |
|-------|--------|
|   52  |    59  |
|   74  |        |
|   75  |        |

In 2016-17, Highways England has made progress in delivering the commitments set out in the Biodiversity Action Plan, which it published in June 2015. Key areas of progress during the year have included: 
Developing a biodiversity metric: The company has developed a biodiversity metric ahead of schedule. It has worked closely with environmental stakeholders to ensure that the metric is appropriate and draws on best practice. We will now monitor progress as the metric is introduced in 2017-18. 



Management plans for sites of special scientifc interest (SSSIs): Highways England has committed  
to producing management plans for the 40 largest sites of SSSIs on its estate. At the end of 2016-17, the company had successfully put the frst 15 of these in place.  

Air quality pilot studies: In 2016-17, Highways England began work on four air quality pilot studies, bringing the total in this road period to ten. The conclusions from these pilots will help inform how the ring-fenced funds for air quality will be used. 

Planning of biodiversity projects: Around 300  
schemes to deliver biodiversity improvements on  
and around the network have been approved by the biodiversity technical working group, which Natural England also sits on. These schemes spent £850,000 in 2016-17 and delivery is expected to accelerate in 2017-18.  
umber of fooding hotspots and culverts  
mitigated: In 2016-17, Highways England mitigated 
61 fooding hotspots and one culvert. The company has worked to improve the quality of data used to report progress against this performance indicator during the year. This has resulted in the total number of fooding hotspots and culverts that were reported as mitigated during 2015-16 being revised down from 124 to 75. Despite this reduction in reported mitigations, it is positive that Highways England is reviewing data quality and putting in more robust systems for monitoring its assets. 

Carbon dioxide (Highways England's activities): 
In 2016-17, Highways England reported that its activities resulted in the emission of 89,346 tonnes of carbon dioxide equivalents. This is 6% lower than the total recorded in 2015-16. 

Carbon dioxide (supply chain): In 2016-17, emissions from Highways England's supply chain were estimated at 361,987 tonnes of carbon dioxide equivalents, which is 11% lower than recorded in 2015-16. However, the latest fgures are still subject to validation and may be subject to change as they are fnalised. 

Number of outfalls and soakaways mitigated: 
Outfalls and soakaways are parts of the drainage system on the strategic road network which discharge to a watercourse, or enable water to soak into the ground. In 2016-17, Highways England mitigated fve very high or high risk outfalls and no soakaways. Four of the outfalls were delivered through major projects that completed during the year. This represents an improvement from 2015-16, when no outfalls were mitigated. 

| 2015-16                   | 2016-17    |
|---------------------------|------------|
| Air quality pilot studies |            |
| commissioned              |            |
| 6                         | 4          |
| 95,373                    | 89,346     |
| Carbon dioxide            |            |
| equivalents - Highways    |            |
| England's activities      |            |
| (tonnes)                  |            |
| 406,523                   | 361,987    |
| Carbon dioxide            |            |
| equivalents - supply      |            |
| chain activities (tonnes) |            |
| Flooding hotspots and     |            |
| culverts mitigated        |            |
| 75                        | 62         |
| Outfalls and soakaways    |            |
| mitigated                 |            |
| 0                         | 5          |

## Outcome: Helping Cyclists, Walkers And Other Vulnerable Users

In 2016-17, Highways England delivered 20 new and seven upgraded crossings for cyclists, walkers and vulnerable users. The company has now delivered 59 new and 172 upgraded crossings in the frst road period (fgure 15). There is no target for this indicator. However, Highways England has yet to set out a clear plan for delivering new and upgraded crossings for the rest of this road period. Highways England also recognises that it has further work to do to improve the consistency and accuracy of the information it reports for this measure. 

Identifcation and delivery of the annual cycling programme: As part of its cycling programme, Highways England is committed to delivering 150 cycling schemes in the frst road period. In 2016-17 it has delivered 32, bringing the total in the past two years to 57. Highways England reports that it is on track to meet its commitment. However, we would like to see greater clarity around its plans for delivery of schemes in future years. 



Vulnerable user casualties: Highways England must also report on the number of vulnerable road user casualties, of all severities, on the network as a performance indicator. As highlighted previously, road casualty data for 2016 is not yet available. Figures from 2014 and 2015 are shown below for reference. 

|                |   2014  |   2015  |
|----------------|---------|---------|
| Motorcyclists  |    917  |    849  |
| Pedal cyclists |    179  |    153  |
| Pedestrians    |    182  |    158  |

## Outcome: Achieving Real Efciency

In the frst two years of Road Period 1, Highways England's cumulative capital expenditure was £6.1bn. The company has reported £169m of cumulative efciency improvements to its capital programme over this period. This exceeds its internal target by £30m and represents 14% of the RIS target. 

 and 2016-
Highways England has reported renewals efciencies from a range of initiatives. These include reducing trafc management and other operational costs by aligning renewals schemes with major projects, contractual changes including more efcient approaches to applying road markings, and more collaborative working with the supply chain. Efciencies on the company's Smart Motorway Programme include reducing overheads through reducing the time taken to deliver schemes, design standardisation (for example, of overhead gantries) and other process improvements. 

Highways England published its Capital Efciency Delivery Plan14 during the year. This document summarises the company's processes to deliver efciency improvements and the related controls designed to ensure that it meets the key performance indicator. Highways England has developed its evidence supporting reported efciencies. However, the company needs to do more to strengthen its reporting of renewals unit costs and the top-down evidence of delivering work to plan. 

Highways England measures its performance against its Cost Performance Indicator and Schedule Performance Indicator, which measure whether the capital programme is being delivered in a timely and efcient manner. These indicators are close to 1, which shows that its capital programme is broadly on track in terms of cost and schedule compared to the delivery plan. 

2016-17 
Cost performance indicator 
0.99 
Schedule performance indicator 
0.97 

Our analysis of fnancial performance and efciency is set out in Annex C. 

## Outcome: Keeping The Network In Good Condition

In March 2017, the percentage of pavement (road) 
that did not require further investigation for possible maintenance was 94.3%. This measure has improved from 92.3% in 2015-16 but it remains below the target of 95%. 

Highways England has provided evidence that it is taking appropriate action to manage any safety implications of lower road condition. It has developed, and is implementing, a range of actions aimed at improving its management of network condition. This includes a plan to deliver additional road renewal volumes to improve the condition of the network and achieve its target. Whilst Highways England has taken forwards many of its actions, it did not deliver its planned volumes of additional renewals in 2016-17. It has now updated its plan for 2017-18, setting out its trajectory for reaching the target and the additional renewals that it is targeting at the worst performing part of its network. We are carrying out increased monitoring to ensure these plans are delivered. 

As well as pavement, Highways England also manages other physical assets on the network, including structures (such as bridges), geotechnical works (for example embankments), drainage assets (such as gullies and drains) and technology assets (such as overhead message signs). 

Structure assets: Highways England is improving its structures inventory information, which is now 98.1% complete. This is an improvement of 0.3 percentage points on the position in 2015-16 (97.8%). The company continues to report that the overall condition of its structures assets is good, with a high average structural condition score. 

Geotechnical assets: Highways England reports that 
96.8% of its geotechnical assets do not require (and are not recommended for) remedial interventions at the end of 2016-17. This is 0.2 percentage points higher than the position in 2015-16 (96.6%). 

Drainage assets: The percentage of Highways England's drainage asset for which it has inventory data coverage increased to 88% in 2016-17, from 87% in the previous year. The percentage of the network with drainage condition data also increased, to 31% in 2016-17, up from 27% in 2015-16. 

Technology asset availability: At the end of 
2016-17, Highways England's technology metrics were all reported to be above target with its roadside technology at 98.8% availability, up from 98.7% in 2015-16. 

| 2015-16                 | 2016-17   |                      |
|-------------------------|-----------|----------------------|
| 97.8%                   | 98.1%     | Structures inventory |
| information             |           |                      |
| Geotechnical -          | 96.6%     | 96.8%                |
| intervention not        |           |                      |
| required                |           |                      |
| Drainage inventory      | 87%       | 88%                  |
| coverage                |           |                      |
| Drainage condition data | 27%       | 31%                  |
| coverage                |           |                      |
| 98.7%                   | 98.8%     | Technology asset     |
| availability            |           |                      |

The RIS Performance Specifcation requires that Highways England develops new condition metrics for pavements and structures for agreement by 31 March 2017. Highways England has shown some progresss in the development of the new metrics but more work is required. These will be validated over the next two years and may be considered for use in the next road period. 

## Annex C: Financial And Efficiency Performance

This annex sets out our analysis of Highways England's fnancial performance and efciency in 2016-17, and our review of its plans for the frst road period. 

## Financial Performance Expenditure Compared To Budget

As shown in fgure C1, Highways England spent Highways England published an updated Delivery 
£3.1bn in 2016-17, split two thirds on capital Plan in June 201615  which included a budget of investment (renewals and improvements to the 
£1,977m for capital expenditure in 2016-17. The network) and a third on resource expenditure company originally intended to make use of its ability 
(operating and maintenance of the network). This to fex its capital funding with an increase of £150m was 2.4% higher than expenditure in 2015-16 and compared to its original delivery plan to increase was £42m (1%) lower than funding agreed with the funding for improvement schemes. 

Department for Transport. 

The department subsequently agreed to provide £230m of additional funding for development of the M20 Lorry Park. As only £80m was expected to be required for this scheme in 2017-18, the department agreed for Highways England to use the remaining £150m to fund the planned increase in expenditure on improvement schemes rather than using the capital fex. As such, the fnal capital budget for 
2016-17 (£2,068m) included an additional £80m for spending on the Lorry Park along with an £11m budget transfer from resource for a revision to accounting treatment of research and development expenditure. The change in capital funding for 2016-17 is shown in fgure C2. 

Capital expenditure (£2,031m) was £37m (1.8%) below budget and resource expenditure (£1,042m) was £5m (0.5%) below budget. Signifcant variances compared to the budget are shown in Figure C3 and are summarised below: 

 
-  Renewals expenditure was £23m higher than 
budget16. Highways England decided to bring 
forward some renewals activity from 2017-18 in order to reduce the overall capital underspend. 


-  Expenditure on improvement schemes was £41m 
lower than budget. The M20 lorry park scheme underspent by £69m due to delays in developing 
the scheme. There were also underspends on other 
schemes which are paused awaiting value for money assessments. These underspends were partially ofset by overspends on some major projects. 

## Re C3: Highways England'S Expenditure Compared To Budget In 2016-17 Expenditure Variances Within The Capital Portfolio

Our analysis shows that actual expenditure varied signifcantly from the baseline for a high proportion of improvement schemes in 2016-17. Figure C4 shows the proportion of the 112 major schemes with large variances. 

 
-  Ring-fenced investment funds (air quality, 
environment and innovation funds) underspent by £10m (17%) due to delays in developing these 
work programmes. 
 
-  Other Capital was underspent by £9m due to 
delays in IT projects and projects to improve programme management capability. 
 
-  Resource expenditure was £5m below budget 
due to slower recruitment than anticipated and favourable settlement of contractual claims. 

Fig
ure 
C4: 
Prop
orti
on o
f ma
jor 
sche
mes 
with 
large in-year var
iances i
n 2015-16 and 
2016-17

In 2016-17, 78% of major schemes had underspends or overspends 20% greater than baseline. For schemes that were in construction, 60% underspent or overspent by 20% more than the baseline. 



Whilst overall the major scheme portfolio was progressing broadly on budget, a high proportion of individual schemes have large in-year variances. In some cases, this refects the reprogramming of schemes for reasons of efciency (e.g. delivering a 2017-18 scheme early when another scheme is delayed). However, it will be important for the company to have a good understanding of the reasons for these variances and apply any lessons learned from this analysis in delivering future schemes. 

## Monthly Renewals Expenditure Variances

Figure C5 shows that Highways England's expenditure on renewals increased signifcantly in the fnal three months of both 2015-16 and 2016-17. 

Winter working is typically less efcient due to lost time from severe weather and higher contractor rates. We have discussed this with Highways England who recognise that this is not the most efcient profle given the funding certainty provided by the RIS. As shown in fgure C5, the 2016-17 budget had a smoother profle and the company has examined the main factors that resulted in higher expenditure in the fnal quarter. For 2017-18, Highways England has again set a fatter budget profle and believes its gradual rollout of the asset delivery model, which sees it taking greater direct control of renewals, will help it deliver in line with the plan. In future we would like the company to examine, with the Department for Transport, what cultural and fnancial control barriers may still exist to the company delivering renewals efciently across the year. 

## Efciency Improvements

The company has reported £135m of efciencies in 2016-17, bringing the cumulative efciency improvements to its capital programme in the frst two years of Road Period 1 to £169m. This exceeded the company's internal target by £30m. Highways England reports efciency improvements as set out in the Efciency and Infation Monitoring Manual (EIMM)17. There are three components of our assessment of Highways England's efciency improvements: 

1) analysis of Highways England's bottom-up 
description of efciency improvements; 
2) unit cost movements; and 
3) expenditure and delivery compared to the 
funding assumptions set out in the Road Investment Strategy; 
Our review has shown that Highways England has improved the evidence supporting its efciency reporting over the past year, but has further work to do in some areas. 

## Efciency Improvements In 2016-17

Highways England has reported renewals efciencies from a range of initiatives. These include reducing trafc management and other operational costs by aligning renewals schemes with major projects, contractual changes including more efcient approaches to applying road markings, and more collaborative working with the supply chain. Efciencies on the company's Smart Motorway Programme (SMP) include reducing overheads through reducing the time taken to deliver schemes, design standardisation (for example, of overhead gantries) and other process improvements. 

## Delivering The £1.2Bn Ris1 Efciency Requirement

Highways England must deliver at least £1.2bn of efciency improvements in Road Period 1. Efciencies delivered in the frst two years represents 14%, in line with their delivery plan. Considerable work remains to achieve the KPI requirement. 



Highways England published a Capital Efciency Delivery Plan18 during the year. This document summarises the company's processes to deliver efciency improvements and the related controls designed to ensure that it meets the KPI requirement. We consider that this delivery plan provides increased confdence about the company's ability to deliver the 
£1.2bn requirement. However, there is still some risk associated with schemes that start construction at the end of Road Period 1. This has an impact on the certainty of the company's plans to deliver the more stretching efciency improvements required in later years of the road period. 

## Efciencies From The Smart Motorway Programme

In our 2015-16 annual assessment, we raised concerns about the robustness of the company's analysis of efciency improvements from its smart motorway programme. During 2016-17, Highways England developed a more robust approach to assessing these efciency improvements. The approach is based on a detailed unit cost analysis and addresses the concerns that we previously raised. 

Highways England is currently developing its approach for assessing efciency for other parts of its improvement programme, in particular, its Regional Improvement Programme. We expect the company to progress this work over the next few months in consultation with us. 

## Renewals Unit Cost Analysis

Highways England does not consider that its renewals unit cost information is as robust as it would anticipate. As a result, its Board was unable to assure the costs published in the company's Monitoring Reporting Statements. We recognise the complexity of calculating and reporting renewals unit costs for Highways England, particularly where contractors may undertake a number of diferent activities within one scheme of works. However, we consider that Highways England needs to strengthen its reporting of renewals unit costs. We will work with the company to address this over the next year. 

## Cost Performance Index

The Cost Performance Index is a measure of earned value which is often used in the construction industry. It is a measure of the relationship between target and actual cost for work completed. Highways England has reported a CPI of 0.99, which indicates that overall, projects are slightly above target cost. The fnancial performance section of this annex provides details of individual scheme variances. 

## Schedule Performance Index

The Schedule Performance Index is a similar measure of progress against the agreed schedule. It is a measure of the relationship between budgeted cost of work delivered and scheduled to be delivered. The company has reported a SPI of 0.97, which indicates that overall projects are slightly behind schedule. 

## Input Price Efects

Highways England's funding for capital projects in 2016-17 included an additional 4% for forecast increases to the costs of the company's inputs, i.e. materials and labour costs. Whilst there is no single index that adequately tracks Highways England's specifc expenditure, the company's analysis of a range of measures suggests that the input prices may have increased by 4.8%, compared to 0.5% in 2015-16. 



Lower overall input prices may have saved the company around £20-30m on its capital programme over the past two years. Because of Highways England's difering approaches to the sharing of infation risk in their supplier contracts, it is likely that the actual impact could be signifcantly lower than this because the potential savings may only realise as contracts expire and are renewed. 

## Annex D: Network Investment Delivery

This annex describes Highways England's performance against its investment plan in 2016-17, including ring-fenced funds. It also considers risks to delivery in the remainder of the road period. 

The RIS sets the outcomes, outputs and capital investments that Highways England must deliver over the frst road period. The Investment Plan, part of the RIS, outlines a fve-year capital funding package of £11.4 billion for Highways England to invest in maintaining, renewing and improving the strategic road network. This includes: 

 
-  a programme of major improvement schemes, of 
more than £7 billion; 
 
-  a maintenance and renewals programme, of 
approximately £3.7 billion; 
 
-  a £675m programme of ring-fenced investment 
funds; and 
 
-  investment associated with strategic studies. 
We measure and report on Highways England's performance against the network investment required by the Investment Plan. 

## Delivery Of Major Improvement Schemes In 2016-17

Highways England's progress in delivery of its capital programme during 2016-17 is shown in table D1. It has started construction works on all four schemes that were planned to start, one of which started ahead of schedule. In addition, four schemes scheduled to start construction in 2019-20 started early, ahead of the timescales in Highways England's delivery plan. This includes combining two adjacent schemes (M1 junctions 24-25 and M1 junctions 23A­ 24), originally planned with diferent timetables that will now be delivered as one scheme to reduce the impact and delays to road users. 



Highways England planned to open eight schemes to trafc during 2016-17, six of which were completed on schedule. The remaining two schemes are delayed. The A30 Temple to Higher Carblake scheme is being delivered by Cornwall County Council and delays are primarily due to changes in the trafc management strategy to deal with peak summer trafc. This scheme is forecast to be delayed by seven months to quarter 2 of 2017-18. The A21 Tonbridge to Pembury is also reported to be delayed by seven months, to quarter 3 of 2017-18. The delay is due to unforeseen ground conditions which required Highways England to deal with large volumes of hazardous waste contamination and ground water. It has reported that lessons learnt from this scheme are being applied across the network enhancement programme. The company opened one additional scheme to trafc which was originally planned for completion in 2017-18. 

## Table D1: Major Schemes Delivery In 2016-17

| 2016-17 commitments                 | Committed date    | Actual date    |
|-------------------------------------|-------------------|----------------|
| Major schemes starting construction |                   |                |
| A14 Cambridge to Huntingdon         | 2016-17, Q3       | 2016-17, Q3    |
| A19 Coast Road                      | 2016-17, Q2       |                |
| 2016-17, Q1                         |                   |                |
| Ahead of schedule                   |                   |                |
| M4 Junctions 3-12                   | 2016-17, Q4       | 2016-17, Q4    |
| M1 Junctions 24-25                  | 2016-17, Q4       |                |
| M1 junctions 23A-24                 | 2019-20           |                |
| M1 Junction 45 Improvements         | 2019-20           |                |
| 2016-17, Q4                         |                   |                |
| Ahead of schedule                   |                   |                |
| A47 Acle Straight                   | 2019-20           |                |
| 2016-17, Q4                         |                   |                |
| Ahead of schedule                   |                   |                |
| A52 Nottingham junctions            |                   |                |
| 19                                  |                   |                |
| 2019-20                             |                   |                |
| 2016-17, Q4                         |                   |                |
| Ahead of schedule                   |                   |                |

Major schemes opened for trafc  

| A1 Coal House to Metro Centre    | 2016-17, Q1    | 2016-17, Q1          |
|----------------------------------|----------------|----------------------|
| M1 Junction 19 improvement       | 2016-17, Q3    | 2016-17, Q3          |
| A45-A46 Tollbar End              | 2016-17, Q3    | 2016-17, Q3          |
| A30 Temple to Higher Carblake    | 2016-17, Q3    | Forecast 2017-18, Q2 |
| A556 Knutsford to Bowdon         | 2016-17, Q4    | 2016-17, Q4          |
| M1 Junctions 32-35A              | 2016-17, Q4    | 2016-17, Q4          |
| A160/A180 Immingham              | 2016-17, Q4    | 2016-17, Q4          |
| A21 Tonbridge to Pembury         | 2016-17, Q4    | Forecast 2017-18, Q3 |
| M25 Junction 30                  | 2017-18, Q1    |                      |
| 2016-17, Q3                      |                |                      |
| Ahead of schedule                |                |                      |

## Key

- 
Highways England's expenditure against its budget for major schemes in construction stages in 2016-17 is shown in table D2. The company has spent 10% more than it budgeted on those schemes in construction and 6% more than budgeted on those schemes which have opened for trafc. 

19. Highways England is adopting a phased approach to deliver this programme of junction improvements along the length of the A52 in Nottingham. The frst two junctions started in 2016-17. 

2016-17, Q4 
Combined schemes 
| Scheme stage       | Budget    | Outturn costs    | Variance    | % over / (under)    |
|--------------------|-----------|------------------|-------------|---------------------|
| (end of 2016-17)   | (2016-17) | (2016-17)        |             |                     |
| Under construction | £734.2m   | £804.4m          | £70.2m      | 10%                 |
| Open for trafc     | £245.6m   | £259.2m          | £13.6m      | 6%                  |

During 2016-17, Highways England has made progress in developing schemes prior to construction. The company has progressed 11 schemes from pre-options into options stages and 14 schemes have started development. By the end of March 2017, 20 schemes were under construction exceeding Highways England's delivery plan. A breakdown of the major schemes' progress in 2015-16 and 2016-17 is shown in fgure D1. 

## Nstruction In 2016-17

Highways England has provided us with its assumptions for the dates when its major schemes will progress through the stages of development and construction that are outlined in the chart above. We will continue to monitor progress against these in the remainder of the road period. 

## Delivery Of Major Improvement Schemes In The Remainder Of The Road Period

Highways England's original delivery plan (2015­ 2020) included starting all 112 major improvement schemes by the end of the frst road period. During 2016-17, it has taken forwards a review of its major schemes with a particular focus on their scope, value for money and impact on road user experience. 

For example, it has considered the best way of scheduling major schemes which impact on the same routes or geographical locations to reduce customer disruption (Highways England has called this the "corridor" approach). 



As a result, Highways England is proposing a range of changes that are being taken through the Department for Transport's formal change control process. The proposals may include: 

 
-  deferral of schemes where they do not currently 
demonstrate value for money. These would be reconsidered as options for delivery in the next road period; and 
 
-  changes to the schedule of schemes specifed 
in the RIS and / or Delivery Plan based on the corridor approach. A number of schemes may start earlier than originally planned, and others may start later, the majority of which would begin construction in the next road period. 
For the remainder schemes, Highways England reports that three schemes' planned starts during the road period are at risk. For those schemes which are planned to open for trafc, two are delayed. The M1 junctions 24-25 scheme is being combined with the M1 junctions 23a-24 and both will now be opened for trafc in the road period. y combining these two schemes Highways England expects to reduce the impact caused by roadworks and the benefts of the M1 junctions 23a-24 scheme are planned to be delivered 36 months ahead of schedule. 

The major scheme delivery status for the remainder of the frst road period is summarised in table D3. 

| Phase                                          |
|------------------------------------------------|
| plan commitment                                |
| (remainder of RP1)                             |
| As planned                                     |
| On                                             |
| schedule                                       |
| 77                                             |
| (Subject to changes following revisions to the |
| capital baseline plan)                         |
M621 Junctions 1-7 improvements - start of works commitment of 2019-20 delayed to April 2020 
80* 
| Delayed                                            |   3  |
|----------------------------------------------------|------|
| A27 Chichester Bypass - stopped, to be change      |      |
| controlled                                         |      |
| M54 to M6/M6 Toll link road - start of works       |      |
| commitment of 2018-19 at risk                      |      |
| On                                                 |      |
| schedule                                           |      |
| 16                                                 |      |
| As planned (subject to changes following revisions |      |
| to the capital baseline plan)                      |      |
| A1 Leeming to arton - open for trafc               |      |
| commitment of 2017-18 quarter 1 delayed to         |      |
| quarter 3                                          |      |
| Delayed                                            |   2  |
| 19*                                                |      |
| M60 Junction 8 to M62 Junction 20: Smart           |      |
| Motorway - open for trafc commitment of 2017­       |      |
| 18 quarter 2 delayed by to quarter 4               |      |
| M1 unctions 24-25 will now open in 2018-19 (scheme    |     |
|-------------------------------------------------------|-----|
| combined with M1 unctions 23A-24). (The M1            |     |
| Changed                                               | 1   |
| Junctions 23A-24 is now also to open in 2018-19 - a   |     |
| new commitment for the road period.)                  |     |

## Key

- Milestone on schedule or ahead of schedule 
- Milestone at risk, subject to change or one 
quarter behind schedule 
  
- Milestone more than one quarter 
behind schedule 

 Milestones changed 
*Highways England's delivery plan update 2016-17 committed 
to have started works on all 112 major schemes by the end of the frst road period. Of these, 16 started works before the road period, eight started in 2015-16, eight started in 2016-17 and we report on the remaining 80 here. Highways England's delivery plan update 2016-17 committed to open 33 major schemes for trafc in the frst road period. Of these, fve opened for trafc in 2015-16, seven opened in 2016-17, two were scheduled for 2016-17 but were delayed and we report on the remaining 19 here. 

## In-Depth Review Of Major Projects

To support our work in monitoring Highways England's delivery of its major improvement programme, we have carried out an in-depth review of a sample of its major schemes. The company has given strong support to this work. The sample consisted of ten major schemes and two routes, and was selected to be broadly representative of the major schemes portfolio in terms of project complexity, development, type and size. The purpose of the review was to understand the robustness of the processes which Highways England is using to manage its schemes, and to identify any systemic or common themes in development, management and delivery of its major improvement programme. The review made recommendations including: 

 
-  Highways England should undertake a 
comprehensive review of its capital baseline considering cost, schedule and risk; 
 
-  guidance should be developed for projects to 
improve coordination between project teams and central functions - for example in the way lessons are learned and communicated; 
 
-  use of procurement frameworks and template 
arrangements should be considered alongside other options so that scheme specifc factors drive commercial and procurement strategies; 
 
-  portfolio management should be strengthened to 
improve data and reporting, and coordinate major 
project and renewals work better; 
 
-  speed of adopting programme management 
processes should increase; and 
-  future resource and capability requirements should 
be assessed to reduce risk to investment delivery. 


Highways England has accepted these recommendations. It has developed an action plan to address them, which includes identifying the change programmes that are already underway and which will contribute to the plan. 

## Maintenance And Renewals Delivery

In 2016-17, Highways England reviewed its initial maintenance and renewals programme. It re-profled expenditure compared to its budget, resulting in signifcantly higher expenditure in the fnal quarter of the year. Figure D2 shows the profle of renewals by quarter. Highways England has identifed three main reasons for the profle of renewals expenditure in 2016-17: 

 
-  contractual changes in three regions/areas leading 
to delays in delivery in the early part of the year; 
 
-  £30m of additional works in quarter 4 to counter­
balance an underspend on the M20 Lorry Park; and 
 
-  conditioning related to many years of working 
within annual funding envelopes. 
Our analysis has shown that the company has more work to do to improve its forecasting of renewals expenditure. In its monthly reporting Highways England has in every month except March spent less (5-24%) than it was forecasting to in the previous month's report. The company has delivered signifcantly greater volumes on the majority of the main assets types than it had planned (with the exception of geotechnical) and the profle of volumes delivered compared to plan also show a large increase in the fnal quarter of the year. 

| 2016-17 commitments                           | Planned    |
|-----------------------------------------------|------------|
| Renewals                                      |            |
| Pavement (lane kilometres)                    | 1,200      |
| Road Markings (linear metres)                 | 1,952,868  |
| Kerbs (linear metres)                         | 8,088      |
| Vehicle restraint system (VRS) - Concrete     |            |
| (linear metres)                               | 10,000     |
| Vehicle restraint system (VRS) - Non Concrete |            |
| (linear metres)                               | 85,910     |
| Drainage (linear metres)                      |            |
| Renewal of roads                              |            |
| Geotechnical (linear metres)                  |            |
| Trafc Signs (number)                          | 1,140      |
| Guardrail (linear metres)                     | 147        |
| oundary Fencing (linear metres)               | 28,544     |
| Footways (linear metres)                      | 2,014      |
| Lighting (number)                             | 2,332      |
| Soft Estate (number)                          | 6          |
| Renewal of                                    |            |
| 159                                           | 191        |
| structures                                    |            |
| Parapet (linear metres)                       | 2,202      |
| Waterproofng (square metres)                  | 27,067     |
| Motorway Coms Equipment (number)              | 96         |
| Renewals and improvements (number)            |            |
| Renewal of                                    |            |
| technology                                    |            |
| Winter Resilience (number)                    |            |
| Network Resilience (number)                   | 24         |
Actual volume 
Volume 
177,295 
323,832 
11,884 
10,212 
231 
783 
256 
810 
55 
62 

As set out in chapter 2, we have carried out an indepth review of Highways England's management of pavement and structures assets. It is now developing a plan to make improvements to its planning, delivery and reporting of maintenance and renewals work. 

## Ring-Fenced Investment Funds

The Investment Plan for the frst road period includes a series of ring-fenced funds (also known as designated funds), worth £675 million. These funds, which are used to address a range of issues that are over and above the traditional focus of road investment, are split into fve areas: air quality; cycling, safety and integration; environment; innovation; growth and housing. Table D5, below, sets out the value of each fund, the total spent at the end of 2016-17, and examples of outputs from each fund. 

| Fund name                       | Funding    |
|---------------------------------|------------|
| (frst road                      |            |
| period)                         |            |
| Cumulative                      |            |
| spend at                        |            |
| end 2016-17                     |            |
| Air quality                     |            |
| National air quality monitoring |            |
| network: 24 stations            |            |
| £75m                            | £2m        |
| operations by end 2016-17       |            |
| Cycling, safety                 |            |
| and integration                 |            |
| £175m                           | £34.6m     |
| Environment                     |            |
| 6 food mitigation schemes       |            |
| £225m                           | £16.6m     |
| 2 LED lighting schemes          |            |
| Innovation                      |            |
| Construction started on         |            |
| £120m                           | £11.5m     |
| management system               |            |
| Growth and housing              |            |
| £80m                            | £5.3m      |

To date, progress in delivering projects through ringfenced funds has been slow, with a small proportion of the available funding being spent. This is partly due to the need for the company to focus on developing plans for each fund, before it can deliver outputs. Highways England has engaged well with stakeholders as it develops its plans for each ringfenced fund. For example, during 2016-17, the 

Schemes delivered 
in 2016-17 
% of funds 
spent at end 2016-17 
Mineral polymer barrier pilot underway 
32 cycling schemes 
20 safety schemes 
2 integration schemes 
2 noise schemes 
6 landscape schemes 
4 biodiversity schemes 
12 schemes approved in 2016-17, of which work has begun on three. 

company held two stakeholder events, which have helped improve transparency. Despite this, there is still a lack of robust plans in some areas, particularly air quality and innovation, and this represents a risk to these funds successfully meeting their objectives. During 2017-18 we will be undertaking an in-depth review of the management of the ring-fenced funds, and will report our fndings.