Transport Committee
Oral evidence: Strategic road investment, HC 904
Wednesday 1 February 2023
Ordered by the House of Commons to be published on 1 February 2023.
Members present: Iain Stewart (Chair); Mr Ben Bradshaw; Jack Brereton; Paul Howell; Chris Loder; Karl McCartney; Grahame Morris; Gavin Newlands.
Questions 1–105
Witnesses
I: Dame Bernadette Kelly DCB, Permanent Secretary, Department for Transport; Emma Ward, Director General for Roads, Places and Environment, Department for Transport; and Nick Harris, Chief Executive, National Highways.
Witnesses: Dame Bernadette Kelly, Emma Ward and Nick Harris.
Q1 Chair: Good morning. Welcome to this session of the Transport Select Committee where we will be looking at road investment strategies. Before we start, I invite you all to state your name and position for our records.
Nick Harris: I am Nick Harris, the CEO of National Highways.
Dame Bernadette Kelly: I am Bernadette Kelly, the permanent secretary at the Department for Transport.
Emma Ward: I am Emma Ward, the DG for roads and local at the Department for Transport.
Q2 Chair: Thank you very much for your time this morning. You will be aware that in November the National Audit Office published a report on progress on RIS2—road investment strategy 2, for those who are not familiar with the acronyms. We will dig down into some of the particular issues that it raised during this session. Overall, do you think that the report was a fair one? If not, where would you disagree with its conclusions and recommendations? I will start with you, Dame Bernadette.
Dame Bernadette Kelly: Obviously, Mr Harris and I, as accounting officers at National Highways and the DFT respectively, signed off the report. When speaking to a Committee, I am always at pains to be clear that we are not trying to dispute or disagree with the facts as set out by the NAO in their report, on which we have the opportunity to engage very thoroughly with them.
Where I might offer a slightly different perspective, if that is the best way to describe it, is on the overall narrative, in a sense, that the report presents. It highlights some very significant challenges, issues around cost increases and so on, which I am sure the Committee will want to explore, and we are happy to do so. The way I would think about RIS2 would be from the starting point that it was always a very challenging, complex portfolio, with much more in the way of large projects than RIS1. Important lessons from RIS1 were embedded in the way RIS2 was managed: for example, the creation of a contingency fund, National Highways capability building and a number of other things. That has supported some very good delivery, which is perhaps not referenced so much in the report. We now have 17 of the projects that were planned for RIS2 open for traffic. Another 11 are on track to open for traffic in the remainder of this period.
There were three very significant challenges through the conduct of RIS2. Those were around planning consents and legal challenge for a significant number of projects; around smart motorways, which this Committee has done extensive work on, and we will come to that; and, more recently, on the impact of inflation and what that will mean for the delivery of RIS2 and RIS3. I do not think that all those challenges could have been anticipated from RIS1. Those are the things that have really impacted on cost and schedule. National Highways has been able to mitigate some of those challenges, to a degree. A lot of work has been done on DCO consenting and legal challenge. We are very happy to talk about that.
The balance is that there has been good work, it was a very complex portfolio and there have been headwinds that have been significant in their impact. We will probably reflect on lessons through the conduct of this hearing. Clearly, there are things we have learnt and acted upon around things like dealing with DCO consenting processes and legal challenge. There are some lessons that we will take into RIS1, for example around scale of contingency, and of course there are ongoing lessons around things like how you plan and set up a portfolio of this scale and complexity with success.
I say that just to offer a slightly more nuanced overall view on the management of the portfolio than possibly comes out in the report. As I said, I do not dispute any of the facts or evidence presented by the NAO.
Q3 Chair: We will dig into some of those issues during the session. Mr Harris and Ms Ward, do you have any additional comments to make at this point on the very general conclusions?
Emma Ward: Not from me.
Nick Harris: There is only one thing I would add. I agree that it is a more complex and challenging portfolio. We recognise that. As we were completing RIS1, the fifth year of RIS1 had a ramp-up in projects to move more smoothly into RIS2. We had reviews of the portfolio done by the IPA and the ORR, with the ORR as a monitor looking at the efficiency of the portfolio and the IPA looking at the governance, management and deliverability of the portfolio. Both pointed to some of the challenges. The projects in RIS2 were more complex and challenging—many were projects that have been around for years and that we are tackling in this period—but their conclusions were that it was deliverable. We built on many of their recommendations in the lessons that we took from RIS1. In the first two years of RIS2, we have seen 17 schemes completed successfully. Another 18 are in construction at the moment.
Q4 Chair: One factor that the NAO did not identify as an issue was delays due to the covid pandemic. Is that correct? Do you think that there were any delaying factors because of the lockdown and associated issues?
Nick Harris: Of course, covid was a challenge to all of us and we had to change the way we worked. Covid did not create any delays for us. We were able successfully to continue to deliver the portfolio of enhancement projects, which was not a given as we went into covid. It took a lot of hard work by National Highways, the supply chain and DFT colleagues to be able to do that, but we were able successfully to continue to deliver through covid.
Chair: Chris wants to go into some of the portfolio issues. First, Karl and then Ben have quick supplementaries.
Q5 Karl McCartney: Dame Bernadette, you or your two colleagues may want to answer this question. We are going to ask questions about so-called smart motorways later, but you raised the issue in your opening remarks. We can disagree. I think that they are unsafe motorways, as do most people across the country. You call them smart motorways, as does the Department, but there is a hiatus; they have been delayed. There were funds in place in RIS2 for the roll-out of smart motorways. That has been stopped. I expect that you have spent that money on other things, rather than tucking it away under the mattress, so to speak. For RIS3, will you have contingency to carry that on? At some point, if there is further delay, the costs of implementing so-called smart motorways will become economically unsustainable. At that point, do you think that smart motorways might be knocked on the head?
Dame Bernadette Kelly: The Secretary of State repeated that he was satisfied with the current policy position on smart motorways when he appeared before you recently. Of course, we have acted on the Transport Select Committee’s recommendations pretty much in their entirety. As you know, the programme has been paused—
Q6 Karl McCartney: Can I stop you there? You have, but this is financial. The financial implications are that any delay to any big project will make it cost more money. At some point, a decision has to be made by your Department—your advice to Ministers—and the Secretary of State that the roll-out of smart motorways is too expensive. At that point, will you stop the roll-out of smart motorways?
Dame Bernadette Kelly: There are two points in response to your question about the money. One of the things that has happened to money that is not being spent on continuing with the smart motorway programmes that have been paused is additional investment in retrofitting safety factors, such as emergency areas and stopped vehicle detection, into the smart motorways programme. I am sure that we will come on to that. One way in which money has been repurposed has been to increase the safety of all-lane-running motorways. I call them smart motorways because that is what people generally understand us to be talking about, but I understand that—
Q7 Karl McCartney: But a hard shoulder is not even a safe place.
Dame Bernadette Kelly: On your point about decisions for the future, those are for Ministers, I am afraid. You cannot really expect me, as an official, to opine now on decisions that Ministers have not even begun to take. I am afraid that those are questions the Committee will have to come back to in the future, when Ministers take decisions on future priorities and on RIS3.
Q8 Karl McCartney: That is a very helpful answer. Emma, do you have something to add?
Emma Ward: It is just a supplement on the value for money question. As part of agreeing the funding for the retrofits and the additional safety measures, we have taken that through our investment governance process and have looked at the value for money implications for the schemes. So far, at the moment, for the investment that we are making, that has not adversely affected the value for money judgment on those schemes. For now, in terms of what we are doing, the value for money remains good.
Q9 Karl McCartney: Hypothetically, if there was a delay of five years, there might be a different scenario. Do you admit that?
Emma Ward: I am talking about the funding that we have repurposed to retrofit additional safety measures on existing schemes. Eleven schemes are paused, so there is no funding in place for those. That has been repurposed within the portfolio to invest in SVD and retrofitting additional emergency areas on schemes that are already in existence on the network.
Q10 Mr Bradshaw: Dame Bernadette, as you just indicated, road schemes are highly political. Officials come under tremendous pressure from Ministers, Governments and individual Members of Parliament for particular road schemes. Given that only 60% of those in phase 1 were not delayed or cancelled, should you really have signed off an even more ambitious phase 2? As accounting officers, why did you sign off phase 1? Why did you sign off phase 2? Will you assure this Committee, on behalf of the taxpayers, that you will not sign off phase 3 if you think it is undeliverable, as the last two phases have proven to be?
Dame Bernadette Kelly: I will talk about RIS2 more than RIS1, since it is more recent. At the beginning of RIS2, we judged that the programme was deliverable. That was also the conclusion that the Office of Rail and Road drew, as did the IPA, which did independent assurance of the RIS2 portfolio. The general conclusion—of an amber rating, I think—was that it is challenging but deliverable. From an accounting officer perspective, I had assurance and was satisfied at that point that the programme that was being planned was a deliverable portfolio.
As I have said, through the course of the delivery of RIS2 we have seen very significant issues arise around planning consents, around smart motorways and now in relation to inflation that have given us a very different set of challenges to deal with. We can have a debate about how much of that we could or should have predicted. I think it would have been very difficult for us to anticipate and, therefore, take account of those factors back in 2018-19, which is the point at which we were firming up RIS2. I am satisfied that I took reasonable assurance and that reasonable judgments were made at that time. Nick can no doubt say something about National Highways. I don’t think he was accounting officer at that point, but his predecessor will have made those assessments and judgments as well.
Q11 Chris Loder: Good morning, everybody. It is good to see you. It is good to see you again, Bernadette, after your visits.
Emma, I would like to ask you first about RIS1. Can you tell us what the budget for RIS1 was?
Emma Ward: I do not have that number in front of me for RIS1. I would be very happy to drop you a note. We might have it somewhere in the pack, so I will come back to it.
Q12 Chris Loder: In that case, are you able to tell us the spend for RIS1? I do not know whether any of the other members of the panel have that information available. If not, maybe we can revisit it a little later or you can send us a note, if that is more helpful.
I am asking these questions not to try to catch you out but because the area I am interested in is the roll-over of RIS1 into RIS2. I want to try to get a line in the sand as to where we were at the end of RIS1. I am afraid I am not finding that very clear. What I am really interested in understanding, if anyone is able to help, is the budget for RIS1, the spend for RIS1 and what the difference was at the end of RIS1. Then we can drill into the projects that have been carried over into RIS2. Would it be helpful to come back to that in a moment?
Dame Bernadette Kelly: I am just looking for those. We are all rifling through our programmes. RIS1 committed to total capital spending of £15.2 billion, of which £7.7 billion would be spent on enhancement schemes. If I am correct, that was the position at the beginning of RIS1. I think you are asking for the end point of RIS1. I understand what you are trying to say.
Q13 Chris Loder: Yes. At the end of the year, how much of that £15.2 billion was spent, and what was the value of the carry-over? In my mind, the reason for asking you the questions is that at the moment I am not clear about how much you either underspent or overspent on RIS1 and the associated value of the projects that were carried over into RIS2.
Nick Harris: Perhaps I can add a bit to that. It is important to look at road periods as a continuum. Projects that finish in one road period will have started in previous ones. Projects will start. We spent the £15 billion budget in RIS1.
Q14 Chris Loder: The entire £15.2 billion was spent.
Nick Harris: It was spent. What I cannot tell you, because I do not have the numbers, is how much the funding was for the schemes that started in RIS1 and have continued and, in many cases, been finished in RIS2.
Dame Bernadette Kelly: To your point, my recollection is that the NAO’s previous report looked quite extensively at how the portfolio for RIS1 had been rephased. We will be able to find that information for you. I apologise for the fact that I do not have it immediately in front of me.
Q15 Chris Loder: The reason for asking is to find out whether, in effect, the settlement for RIS1 at the beginning included the full funding of those schemes, in the same way that we saw for Network Rail CP5 to CP6. Did the settlement for RIS1 include the full delivery of those schemes during RIS1, which is typically, although not necessarily always, the case? I am trying to understand how much was delivered as expected at the end of RIS1 and how much was carried over into RIS2.
Nick Harris: If I give an example, it might help. Seven projects on the A47 were planned to start in RIS1. They were all due to start in the final year of RIS1, so only the construction in that year was funded. We went through a recutting of the portfolio because—sticking with the example of the A47—it did not make sense to road users to start in seven locations. It was much better that we started and did the work sequentially. All the projects would then finish within the original time period, which started in RIS1 and would end in RIS2. The money would be the same, but it would be much more deliverable and have a better impact on road users. There were a number of projects that were funded only for the construction that would happen in RIS1. They would then be completed in RIS2.
Q16 Chris Loder: I will ask a slightly different question before we move on to the ins and outs of RIS2. Of what you were funded for in RIS1, how much was delivered within RIS1 and how much was carried over to RIS2?
Dame Bernadette Kelly: We can certainly write to you on that and provide that.
Q17 Chris Loder: That is quite an important foundation stone for a lot of the questions that we are asking here. It is clear that you have a number of pressures and complexities in RIS2. As it stands, I do not think that we are able to come to a conclusion, based on the answers so far, as to how much of a pressure point the RIS1 carry-over has placed. That is one of the things that we are keen to understand.
To turn the tables a little, how much are you of the belief that the carry-over, even though we cannot quantify it at the moment, has had an impact on RIS2 delivery? I don’t know whether I should ask you, Bernadette, or your colleagues.
Dame Bernadette Kelly: It certainly will have had an impact, but I think that would also have been costed in, if I can put it that way, when the planning for RIS2 was done. Where projects had slipped from RIS1 into RIS2, with associated costs, that would have been taken into account.
Q18 Chris Loder: Are you saying that, in effect, projects have been costed twice—that projects that were in the original costing for RIS1 got to the point where you thought they were not going to be delivered and were then costed again in RIS2, simply because they were not delivered at the end of it?
Dame Bernadette Kelly: I do not think that they were costed again, but the profile of the spend will have changed between RIS1 and RIS2 for a number of projects.
Chris Loder: All right.
Emma Ward: Shall I have a go as well?
Chris Loder: Yes, thank you.
Emma Ward: Without having the exact figures for RIS1, I am basing it on where we are in RIS2. As I am sure you understand, what we have is lots of projects in different phases of development. Some of them will be for construction within that road investment period and some will be for construction outside it.
Q19 Chris Loder: I very much understand the planned timeline. I very much understand that for costing purposes you will phase some schemes to be planned and scoped in RIS1 and delivered in RIS2. I completely understand that. What I am trying to get into is where you say in RIS1, “Plan to plan and construct,” but half of the construction does not happen in RIS1 and is pushed into RIS2. That will have been costed for at the beginning of RIS2, but what I am getting from you, Bernadette, is that you are re-costing it from RIS1 into RIS2.
Dame Bernadette Kelly: I suspect that what maybe you are trying to get at is whether there was a big increase in the cost and then that slipped; that is, how did we spend all of RIS1 if at the same time we were moving projects.
Q20 Chris Loder: Not necessarily. That may be a supplementary that one of my colleagues may wish to ask. I am just trying to get to the base accounting of these enormous projects, some of which are extremely overspent. It feels to me, as I have seen in other ways, that you account for something at the beginning of one control period and account for the same project again at the beginning of the second control period. I want to know whether or not that is the case.
Dame Bernadette Kelly: We might be able to offer more illumination on this if we talk about RIS2, because we are seeing some of the same challenges there. Projects that we expected to be further advanced, but not necessarily complete, will now need to move into RIS3. I wonder whether that can help us to address your general point of understanding.
Q21 Chris Loder: I have some very prescriptive questions, so I would like to focus and keep to those. Can you tell us whether any component of a project that you costed in RIS1 but was not delivered in RIS1 was priced into RIS2 as well? I appreciate that that is quite a detailed question and that you may not be able to answer it, but it is an answer that we are looking for to understand this area. Could you be very clear? Looking at the RIS1 projects, what was not completed, and what was within the accounting for RIS2? I am just trying to understand the double accounting.
Dame Bernadette Kelly: I think I understand the general point. We just do not have that level of detail on spending for RIS1.
Emma Ward: So that I understand the question, and we can make sure about it when we write back, an example would be that we did some very early development work on LTC in RIS1—
Q22 Chris Loder: What is LTC?
Emma Ward: Lower Thames crossing—apologies. Development work on lower Thames crossing started in RIS1. Funding was then allocated to lower Thames crossing for RIS2 for further development. That is a project that spanned both the first and the second road investment period. What we have seen on that project is quite significant scope increases and changes in the last couple of years, so we have not spent the level of funding that we had expected to spend on it in RIS2. That is an example of a project that spanned both periods where the profile of the spend has changed. Is that the sort of example you are looking for?
Q23 Chris Loder: While I appreciate that you are going to confirm the details—thank you—I think that it is a fair high-level comment to say that it was probably your more complex and, certainly, larger RIS1 projects that, in effect, were carried over to RIS2. Could you tell us a little more about that decision? Why were those projects specifically carried over to RIS2, rather than others? Was it literally an operational reason? Nick, I am conscious that this may not have been your period of tenure, but it appears to me that the responsibility to deliver within RIS1 for complex, difficult programmes has been pushed back into RIS2. I want to understand the decision process for that.
Dame Bernadette Kelly: I will try. Again, I apologise for the fact that we may want to clarify some of the precise points in writing. I will give a high-level perspective on it. I will refresh my memory of the NAO’s previous report on RIS1, because I think that it went into some detail on this.
It was all part of the portfolio management of RIS1. As RIS2 was being developed, clearly a key element of the portfolio was those projects that had already been prioritised and, in many cases, had had significant development work. In a number of cases, I imagine, larger ones will have had DCO consent, and some of them will have been in full construction. Those projects would have been a natural priority for Ministers as they determined the shape of RIS2. The same will be true, potentially, as we go into RIS3. Clearly, when you have a project that has started and for which you have gone through all the planning processes and on which you have started construction, you will want to keep that project going in RIS2. Those were the decisions that Ministers would have been taking at the time.
Q24 Chris Loder: Am I right in saying that the Department would have deferred bigger projects to RIS2 and might not even have started some of the planning process in RIS1, as was originally expected?
Dame Bernadette Kelly: Not if it had been planned. I will ask Mr Harris to say more, but there was an active process of portfolio management through RIS1. In a sense, that is how the road investment strategy was set up. Because there are lots of projects at different stages of development, some of which may proceed ahead of schedule and some of which may proceed behind schedule, it was always intended that there should be an ability for National Highways to manage that portfolio in a flexible way. I think that is what was going on, rather than lots of very conscious decisions by Ministers to stop or change the programme.
Nick Harris: When the RIS1 portfolio was developed, projects were at all kinds of different stages. Let’s not forget that that was the first portfolio, so there were projects that had started under the Highways Agency that continued on into RIS1. A really important point is that that is the strength of a portfolio. Things will move. As projects that are in their early stage are developed, scope will change. Dealing with the requirements of the planning process—environmental mitigation and things like that—will change. That has an impact on timescale.
I mentioned the A47. There we brought some forward. Some projects were planned to have only a certain amount built, but we actually built more. Others that would have started were pushed back because that was a better deliverability and value for money decision.
Q25 Chris Loder: I am conscious that we have been talking a lot about enhancements. We need to talk about the maintenance of the roads as well. In the RIS2 settlement, £27.4 billion was the overall amount. Of that £27.4 billion, £14.1 billion has been dedicated to enhancement projects. If my maths serves me correctly, that leaves £13.3 billion for operation and maintenance.
Nick Harris: And a few other things.
Q26 Chris Loder: Maybe we can come to the few other things a bit later. Nick, is that balance right?
Nick Harris: Originally, the budget for RIS2 was the £27 billion that you mention. Those splits are correct. It was £14.1 billion for enhancements.
Q27 Chris Loder: I beg your pardon. When I say, “Is it right?” I do not mean, “Is it an accurate statement?” I mean, for you to deliver everything from road safety to major infrastructure enhancement, is that balance, that split of £14.1 billion versus £13.3 billion, correct? Does it deliver what you need?
Nick Harris: We focus a lot on enhancement projects. Those are the big things that are going on. We have a large network that we need to operate and maintain, so at least 50% of our spend is on maintaining and renewing the roads that we already have. That split is about right. It increased from RIS1 into RIS2. In other words, in RIS2 there was an increase in the money—
Q28 Chris Loder: I appreciate your explanation. I just want to understand very straightforwardly whether you are happy that, with that balance, you can deliver what you need to deliver.
Nick Harris: I was happy with the balance that we had going into RIS2.
Q29 Chris Loder: Are you able to tell us how much is dedicated to road safety?
Nick Harris: Road safety occurs in a number of budget areas. When we do enhancements of the network, we are addressing road safety. Within that number, there is around £4.5 billion to renew assets. That has a very important road safety implication. A bit more than 70% of the roads and assets such as bridges and structures that we look after are more than—
Q30 Chris Loder: Do you have any specific road safety initiatives that you fund with that money?
Nick Harris: Road safety is marbled through everything we do. When we renew an asset—a bridge or other structure when it is replaced or renewed—at that point I can explain where—
Q31 Chris Loder: I appreciate that, but we are against the clock. Thank you for your kind explanation, but we need to crack on. I would love to welcome you to the south-west to show you some things, just to see how well you think they may or may not work. I will write to you.
Emma, I want to ask you, if I may, about the difference in management from the Department’s perspective on RIS1 and RIS2 for complex projects. Nick said he is quite happy with the balance of how capital and operating spend is coming his way. How are you managing differently between the RIS1 and the RIS2 periods? I’m sorry; I don’t know if you were in the Department at the time.
Emma Ward: I wasn’t. I joined the Department in March 2020, so I was not there for RIS1, but I can reflect because we have changed quite substantially the way that we client National Highways and have built significant capacity in my teams. For every tier 1 project there is a dedicated client senior officer under a director who works for me. That has expanded quite significantly in the last 18 months to two years.
Q32 Chris Loder: What we are basically saying is that there has been a considerable increase in the number of civil servants to manage these projects compared with RIS1. Is that a fair assumption?
Emma Ward: I would say that we have strengthened the team, yes.
Q33 Chris Loder: They increased the numbers.
Dame Bernadette Kelly: With a significant focus on senior capability, very much guided in many cases by the IPA’s recommendations about clienting and departmental capability. Because it is a bigger and more complex portfolio, we have certainly sought to build the capability that we, in the Department, have to ensure that we are providing the right oversight.
Q34 Chris Loder: Would you be able to tell us, either today or in writing, how many additional people you have in the Department to help manage this.
Emma Ward: Between RIS1 and RIS2?
Chris Loder: Yes.
Emma Ward: Absolutely. I can write to you on that.
Dame Bernadette Kelly: The other thing that has changed as between RIS1 and RIS2 is the enhancement that we have made more generally to how we manage major projects within the Department. My department has done an enormous amount of work, which I am happy to write and provide details of to the Committee, about how we ensure that we have the strongest possible governance and oversight of our major projects portfolio, including of course RIS2.
We have a 24-lessons learnt project which is embedded in all of the tier 1 projects that National Highways is responsible for. My own investment committee, which I chair as well, has also stepped up its scrutiny and challenge, both at project level and in its capacity to review and ensure that it is satisfied with progress, and at portfolio level.
I sense that you do not want me to talk at great length, but there is a lot more I could say and describe.
Chris Loder: I would love to talk at great length, but the problem is that we do not have the time, which is a shame. We would love to talk about this.
Q35 Jack Brereton: I want to ask a quick question about phasing. Nick, you mentioned a minute ago the tendency to end-load a lot of the actual physical delivery of schemes in the programme. Is that an issue?
Nick Harris: We went into RIS2 with a reasonably flat profile but with the twin issues of planning, particularly for the larger schemes. There were three issues, really. One was the planning for the larger schemes and then with inflation we have had to reprofile, which has moved some projects back to the end of RIS2.
It is important to understand the impact of the lower Thames crossing project on RIS2. It is a large project, and movement in a very large project has a very big impact on the profile. That has gone back about two years because of the planning process and Tilbury getting freeport status. We had to redesign parts of the project to accommodate that.
Q36 Jack Brereton: Surely having such a high amount of delivery at the end of a spending programme is not sensible. You would surely want a consistent level of delivery of schemes throughout the programme to best manage your resources.
Nick Harris: Yes, I agree. A flatter profile is definitely better, but the enhancement portfolio is only part of the total spend of £27 billion we talked about. The renewal capital spend and the maintenance spend has remained flat throughout. Something like 60% of the spend is not back-end loaded. It is in the enhancements that we see more of that, and it is only two or three projects that have delivered that back-end loading—the lower Thames crossing and a couple of others.
Emma Ward: We will want to come back to it at RIS3. That is partly where your colleague was coming from. The process for thinking about RIS3 is due to kick off shortly. We hope to issue a consultation around RIS3 very shortly. Part of the engagement that needs to happen in the run-up to April 2025 is to understand which projects and what tail will go from RIS2 into RIS3. Are they still value for money? What is our assessment of deliverability, and what is the appetite of Ministers to add additional enhancements to the programme? That starts quite early. We are already thinking about the impact of any delays and deferrals through any one given investment period and into the next roads investment period as well.
Q37 Chair: We turn now to the delays caused by the development consent orders that you referred to as quite a significant issue. Can you give my colleagues and me a little more detail as to what the impact of those delays has been?
Dame Bernadette Kelly: I will start, but I will probably want to hand over quite quickly. First, it is worth saying that this portfolio included a much larger number of nationally significant projects requiring DCOs. In effect, there were 33 in total in the RIS2 portfolio at the outset.
Prior to RIS2, and all through RIS1, there had not been any particular delays in relation to securing DCO for projects. It is fair to say that we had not anticipated, in the planning for RIS2, that we would see the challenges and the delays that we did. Essentially, up to 2019 and early 2020 things were going smoothly and to schedule. What happened then was that we saw a number of significant cases, legal challenges and other difficult planning decisions which had an impact on a significant number of those projects.
Perhaps I could ask Mr Harris to go through the detail. I am sure you will want to talk about how we have addressed that as well, but he can talk about the impacts initially.
Nick Harris: To address the impacts, as we went through RIS1 into RIS2 we had successfully gained 14 development consent orders. It was in the early part of 2021 that we had a legal challenge over one project, which was the A38 near Derby.
Perhaps I can talk about what has happened in the last 18 months or so. There was then a pause of about 12 months in gaining consents, which ended early last year. We have then seen nine schemes that have been approved and have gained consent. Two have gone through to construction and two were about to start construction, but five are still in legal processes.
It is important for the Committee to understand that delay is not necessarily linear for us. We have a digging season, so earthworks have to be done in the spring, summer or autumn. Also, a lot of the environmental work we have to do is quite time of the year dependent. Although the legal delays take a few months, on some projects that can mean a delay of a year or more. That is the sort of impact that we see at the moment.
Q38 Chair: With the benefit of hindsight, which is a great thing, do you think you should have anticipated those delays better? Was there an issue with not spotting policy changes from other Government Departments that might have spawned some of the challenges?
Nick Harris: Speaking from our point of view, having pulled together and put the applications in, we are one of the most successful organisations in gaining approval through the DCO process. As I said earlier, we have gained 14. We continually keep abreast of changes in policy and what is happening elsewhere to feed into the process. It is fair to say that the scale of challenge and the speed with which the position changed going into 2021 was beyond what we could cope with at that point.
Dame Bernadette Kelly: From a broader policy perspective, as you say Chair, hindsight is a wonderful thing. It is quite difficult to anticipate how these things will play out. Planning has an inherent uncertainty. The process of legal challenge is inherently uncertain. Of course, the grounds for objection and delay have varied from project to project but, broadly speaking, clearly the environmental themes are by far the most significant. That coincides with what we see in broader policy, but also broader society, which is an increasing focus and challenge on environmental standards. There are lots of things that we are doing, both on the policy front and in how National Highways is delivering its programme, to address those standards. We can talk about whether it is biodiversity or carbon challenges. We are constantly seeking to improve standards.
I genuinely think that it would have been very hard for us to have anticipated exactly the way things played out. I wish we had, but we did not. What we have done, though, is to act swiftly and decisively in providing strong legal arguments back in order to unblock consents. National Highways, in its own rigour in preparing DCOs, is ensuring that issues that it knows may become more prominent are addressed in advance. We are doing work within the Department to strengthen our own capability to understand what is going on in the broader planning system and to prepare for that. Consultation on a new national networks and national policy statement is an important part of that as well.
We did not anticipate exactly, but what we have tried to do is respond effectively and swiftly to deal with the issues that we have seen.
Q39 Chair: You anticipated my next question, which is on the new national networks policy statement, which we understand is imminent. I know that these terms can mean a variety of things in Government life. I do not expect you to comment on something that has not yet been published or put out for consultation, but when that is through, would you expect it to affect any of the projects in RIS2, or is it more likely to be for RIS3 projects?
Emma Ward: I think some Committee members had a technical briefing from my team on this last week, which I hope was helpful.
Chair: It was very helpful. Thank you.
Emma Ward: Good. As you say, we are hoping to publish the consultation shortly. What we hope that will do, in exploring a change in emphasis on the statement of need and a clearer statement on carbon impacts, as well as thinking about biodiversity and air quality, is to give a more stable planning context for DCOs that come forward. I think it will only bite on projects where we have DCOs yet to go into the system. It is not going to impact retrospectively on projects where we already have a DCO either submitted or consented.
Q40 Chair: Thank you. In the department of lessons learnt, how confident are you now that your action plan on reducing delays will have an effect? The National Audit Office report says you believe that the risk from delays has reduced since you took steps to improve your approach. What assurance can you give that that will continue?
Dame Bernadette Kelly: We have obviously seen an effect because nine DCOs have now been approved since April 2022 although, as Mr Harris says, five of those are still subject to legal challenge. I think we can say that it is having an effect on the ground. The national networks policy statement is intended to further ensure that we can have confidence that we will be able to see road schemes proceed through the planning regime with a degree of certainty.
Equally, I do not underestimate the fact that challenges still exist, and we will need to continue to address them. I do not regard this as a problem that we have entirely dealt with. It is a function of many factors and increasing scrutiny and challenge on many areas of Government policy that impact on the environment. I am sure that will be true for RIS2 and our roads projects as well.
Chair: We now turn to the contingency budget.
Q41 Paul Howell: As the Chair has just said, I want to talk about the contingency budget, but first I want to explore a bit further what my colleague was saying earlier. I would like you to try to help me to understand how you control the cost in the first place, before you even consider whether you are going to go into contingency budget consumption. I am getting myself confused—I am very new to this Committee—about whether your spend allocated to a project is in RIS1 or is between RIS1 and RIS2. How do you manage the way that the money is being spent? Is it focused within a RIS section? Is it focused within a timeline? Is it within a project?
I understand the difference between cash-flow timings and actual commitments to a project, but this is not quite clear to me. Can you start from there, and then we will talk about the contingency usage of the projects?
Nick Harris: There are differences, depending on the size of the projects, as to how we manage the budgets and the business baseline cost. Yes, it is a portfolio but, obviously, it is a portfolio that is a collection of projects.
We have a project control framework which has a series of stage gates that all projects have to go through in their development. As they go through each stage gate we confirm or lock down the scope and go through a cost estimating process. The allocation of budget for the project is developed through that process, and there are points at which we have to go to the DFT, depending on the size of the project, to confirm what the budget is for the project. We also have to confirm the value for money of the scheme. All of that is done in line with the Green Book, so—
Q42 Paul Howell: Sorry. To make it a little bit clearer, let’s try to pick out simple numbers, not necessarily scaled the right way. If you had a £100 million project and you were going to spend it in 10 pieces of £10 million each, and you got through stage 2 and you had done £20 million-worth of spend, are you saying that the next stages could still change very dramatically depending on what had happened so far, and therefore the project becomes at risk even though it is halfway through being delivered?
Nick Harris: No. There are two things that I can add that would be helpful. After the development stage, typically you are refining the precision of the cost estimate because you define the scope. You would not expect it to change. We estimate our costs on the most likely. That means that some of our projects will come in under that and some will come in over that, which is why we hold a central contingency fund.
If you look at the performance of RIS1, which we were touching on a bit earlier, and the performance of the first two years of RIS2, for most of the projects we are coming in above or below quite a small percentage of that most likely estimate, so—
Q43 Paul Howell: Sorry to interrupt. If you are coming in pretty close to your estimates, how come you have used half of your contingency almost immediately?
Nick Harris: I am coming on to that. As we go through the process of developing and then delivering the projects, we allocate funds from the contingency budget to projects. There are a number of things that have driven that. Projects may change scope. As we go through the planning process we may see changes in scope or, to achieve the environmental mitigations that we are required to do as part of the planning process, we may see changes in costs because of that.
A good example might be the A417 in Gloucestershire, which is in a very environmentally sensitive area and has a very challenging topography. We had to spend more as we went through the ground investigation on the geotechnical solution.
Q44 Paul Howell: But, surely, you would know that at the start. You know when you start looking at something in that part of the world that there are likely to be problems of that sort of nature. That should not be your contingency; that should be part of the initial set-up.
Nick Harris: But as you do some of the ground investigation work you may find new information that causes you to adjust the scope of the project. Once the project gets to the design phase, though, there tends to be very little movement in the cost estimate, but it is a central cost estimate. As I say, we will see some projects that come in a little bit under it, and some projects that come in over it.
The NAO report talks about quite a significant increase in out-turn costs predicted. That is being driven by a relatively small number of projects. We are talking about RIS2 having a total of 56 projects either completed or started in it. There is a small handful of projects that have driven most of the increase in the forecast out-turn cost. We talked about one earlier—the lower Thames crossing—and another example is the Stonehenge tunnel on the A303. That is a mixture of the planning issues that we have talked about, inflation and changes to scope either through environment or other reasons.
Most of the portfolio is in line with the central cost estimates that we are doing. A small number of projects are driving and increasing costs.
Q45 Paul Howell: I would like to see the actual table of maths behind that. I have not personally seen it; I do not know whether you have. It just does not feel tenable that you are saying most things are fine but, actually, you have consumed all your contingency.
Nick Harris: We have allocated—
Q46 Paul Howell: The contingency is there for a point of failure, effectively, and the fact that you have gone badly wrong in terms of where you are. I spent my life as a manufacturing accountant, and when we consumed the contingency that was a failure on the part of the planning team and the implementation team. The objective was to deliver to the costs you had in the first place. You should be planning to come out with the contingency intact, if at all possible. It feels to me, when this has happened and the contingency has been there, as though it is, “Oh, we’ve got the contingency so we’ll use that,” as opposed to focusing on delivery of the initial project. That might be unfair, but that is what it reads like.
Nick Harris: It might be helpful to compare the way we budget at project level with other projects. We are doing it at most likely: the jargon is P50. Other individual projects tend to budget at P70 or greater. You would not expect them to need recourse to contingency. Because we hold the contingency at portfolio level, not at project level, it is not unusual that we have to allocate some of that contingency to projects as they are developed. It is just a matter of where you hold the risk. In projects, you can choose to hold the risk in the project, or you can choose to hold it at the portfolio level.
Q47 Paul Howell: I do not know whether it is appropriate here or whether you can write to us, but I would be quite interested to see, of the portfolio projects that you had, where the allocation of the contingency was, as opposed to where it finished up.
Dame Bernadette Kelly: Could I add a couple of points? Emma may have an additional point. First, I would not necessarily equate use of contingency with failure. Contingency is there to cover risks. Risks will materialise, and it is normal to expect a contingency to be drawn down.
Q48 Paul Howell: Yes, but it is typically driven by something you did not foresee. At the very least, it is a failure of vision.
Dame Bernadette Kelly: It depends on what the thing is that has happened that could not have been foreseen, and whether that is something the project owner should have foreseen.
By the way, I think there is a general learning point from RIS2, which is that the contingency probably was underestimated given the risk inherent in the portfolio and, in particular, the very much more significant risks associated with the lower Thames crossing and the A303, which, of course, are projects on a scale way beyond the norm for National Highways. I think there is certainly a learning point there.
With the lower Thames crossing, what has happened is that the scope has been very significantly changed to respond to changes like the decision around the freeport, and so on, and that has required the project to be redesigned, and has resulted in a higher cost. It would have been difficult for the project owner to have anticipated and planned for that when none of it was envisaged. That is why I think it is not necessarily failure. Changes are made to scope for perfectly good reasons, but then we need to find contingency and other ways to support those increases in cost.
Nick Harris: Perhaps I am not explaining it very well. There is a decision on whether you hold the risk all at the project level or at a portfolio level. That is a decision that you can make in the management of a portfolio. We decided to hold most of the risks in the portfolio rather than in the individual projects.
Q49 Paul Howell: I have to say that I am not convinced, but we can go round this loop forever.
Nick Harris: Perhaps I can give some more information on that.
Emma Ward: To add one further point, when you set your cost estimate in stone, in terms of then setting your portfolio—effectively, your spending period—you have to take a cost estimate on some projects where you are quite well advanced. As Mr Harris says, you would not then expect the cost to move that much. But you are also taking cost estimates on projects that are still quite early in development, and that is where you would expect it to move. That is where there is a question about what is the level of risk reserve you then have, which ought to bear a relationship to the complexity and the mix of the portfolio that you have. It is holding National Highways to account for those where the cost estimate should not increase and should be relatively straightforward to deliver from thereon in, but then having an understanding of the factors and the risks involved for those projects and schemes that are at a much earlier stage of development, which is where you would expect some fluctuation. There is a real point of decision for Ministers about what level of risk you then put in the portfolio setting process.
Q50 Paul Howell: I would appreciate some sort of written submission that tells us how you manage the cost at a project and portfolio level, and where you control it. I think the control is the thing that concerns us, and therefore the need to go into contingency, both control of what you are actually doing and of the risk factors that are overlaid, but we need to move to other questions.
A natural question that flows from that, probably for you, Nick, is that given that the contingency has been spent, what happens when the next big bill comes in that you cannot deal with? What latitude do you have? Where do you go? How do you sort that problem out? Clearly, for a lot of the time we are talking about, you did not have inflation. Now you have it.
Nick Harris: I will deal with that in two parts. Obviously, inflation introduces a much larger challenge. The most important thing is that contingency is not spent. Some of it is spent, but it is allocated against. As we take a new view on the out-turn costs of the project within the road period, if there is an increase that we have decided to fund from the contingency pot, we allocate that money so that we do not allocate it several times.
Money goes back into the contingency pot because some projects beat their central estimate. That, therefore, sometimes provides money to go back into the central risk pot. Also, as projects move—
Q51 Paul Howell: Often or rarely?
Nick Harris: It is less often now, to be fair, that money is allocated—
Q52 Paul Howell: Once in a blue moon.
Nick Harris: —but it does happen. We have talked about the movement of projects because of the DCO delays. As the project moves, the need for the amount of money that is a contingency just for this road period may decrease as well. It is a dynamic situation.
The level of inflation that we have seen is clearly going to increase the cost of projects. We are already seeing the impact of inflation. That is going to have an impact and will most likely cause us both to use all of the contingency and a problem beyond.
Q53 Paul Howell: We are going around the same sort of loops. To move the discussion slightly further on, and talk about which projects you are going to continue with because of value for money questions and things like that, you obviously have your contingency risks going with those projects and how you assess them. I am a northern MP and we always feel as though we have a challenge in the north because of the fact that the multipliers on value for money projects necessarily sit with the maths going with the population. Therefore, you get your payback in the south, but nothing gets invested in the north. That is a broad statement. It is part of what the whole levelling-up agenda is supposed to be about.
Are we at risk, in this sort of process, because of the systems we have to work with or just the way the rules are, or whatever, that the projects you are dropping off are actually the ones that would be more appropriate in the north, the midlands or wherever in the extremities, and therefore are going against what Ministers might have intended in the first place, but that is the way the rules are that we work with?
Dame Bernadette Kelly: I will try to address that. I think you are thinking about wider policy, the Green Book and things of that sort.
Q54 Paul Howell: Yes, if you consider those sorts of spaces. You have talked multiple times already about the Thames crossing. I would like a Tees crossing. A Tees crossing cannot even get £10 million or whatever it is to do a reassessment of where it is at because rules have moved on in time. How do you manage those sorts of things to keep these other projects bubbling to get to the world where they will be delivered somewhere?
Dame Bernadette Kelly: There are quite a few strands in the questions you have just asked. I will have a go at tackling a couple of them, if I might.
First, I think you are asking a question about the decisions that may need to be taken about the future management of the portfolio, given the inflation impacts that we are seeing now, how that is impacting on the roads portfolio and what will happen as a consequence. On that, I want to repeat some of the things I have said to this Committee. I think they are also highly relevant to the set of decisions that Ministers will need to come to.
In the autumn statement, DFT, like other Departments, has been asked to live within its existing means during the spending review period. The Government have set out their intention to keep Government spending to flat cash for the two years beyond the spending review. Obviously, that is an important thing that we need to work through in the Department. We will now need to work out how we manage right across all of our transport investment programmes, managing the impacts of inflation, without an increase in funding. What that means is that Ministers will need to go through a process of looking right across the portfolio at how we phase and deliver the commitments—
Q55 Paul Howell: That pushes it back.
Dame Bernadette Kelly: Those are decisions for Ministers. That process is ongoing, and I am sure that Ministers will in due course, as decisions are taken, want to say more to the Committee about what decisions have been taken and why. There will be a number of criteria in their minds as they take those decisions. Clearly value for money will be one of them. Certainly, from an accounting officer perspective, it is a very important consideration that I will want to ensure that Ministers are looking at.
They will also be looking at the strategic case and the importance of projects and programmes in delivery of the key Government goals. That includes levelling up. They will also want to look at the practicalities. Is it a programme in construction? In that case, frankly, it is much more painful to delay or stop things. If it is very early development, you can perhaps look at taking it forward slightly later. Those are the considerations that will be in Ministers’ minds, but they are decisions that Ministers will have to take. I think Ministers will want to talk to the Committee about that in due course.
Q56 Paul Howell: I have one final question because I am conscious that I have taken a bit of time. You talked about ministerial decisions and impacts. One of the things that happened was the A1 Morpeth to Ellingham project, which came in, went out and came in. What informed the change in that decision? Why was that decision changed from being something that was viable to not being viable?
Dame Bernadette Kelly: The NAO report refers to funding rather than whether the project should ever occur or not. Again, they will be looking at affordability, value for money and the extent to which particular projects fit in with the overall goals of the Government. Those are the sorts of considerations in relation to all of those decisions that I think Ministers will have in their minds.
Q57 Paul Howell: That one was assessed as low value for money, removed from the portfolio and then, all of a sudden, reprioritised. What made that happen?
Dame Bernadette Kelly: I’m afraid that is an issue for Ministers. You are asking us to account for ministerial decisions which have not been taken and confirmed. I think that is the right way to do it.
Paul Howell: It may be a question for another day.
Q58 Mr Bradshaw: Surely it is for the accounting officer to resist politics overriding economics.
Dame Bernadette Kelly: My job as accounting officer is to ensure that appropriate advice is given on value for money and managing public money.
Q59 Mr Bradshaw: Did the Minister have to issue an instruction on the plan?
Dame Bernadette Kelly: No, there have been no instructions issued on it. Decisions have not been taken and, secondly, when I am giving advice to Ministers from an accounting officer’s perspective—this of course is also something that Nick has to do as accounting officer for National Highways—we look at the strategic case as well.
It is interesting. There is no right answer. Value for money is very important. We have ways of quantifying and evaluating value for money that are rigorous and well established. That is a very significant concern when we give advice to Ministers. The strategic case is more a matter of judgment about whether a particular project or spending proposition supports the wider goals in an effective way. It is something that the Green Book asks us to consider as well.
Q60 Mr Bradshaw: Significant delays, cancellations, overspend and blatant political decisions are being taken. Do you say, as the accounting officer and permanent secretary, that you have never stuck your heels in hard enough to make a Minister issue you with an instruction? When I was a Minister, the civil servants threatened to do that with me all the time. What is going on?
Dame Bernadette Kelly: You are assuming that I am refusing to give directions when I am being asked to do things that I consider clearly inconsistent with managing public money. I am not. I think it is—
Q61 Mr Bradshaw: What is the answer?
Dame Bernadette Kelly: It is perfectly reasonable for Ministers to decide the spending priorities that they wish to make. That is exactly what the system allows for. For every single major project investment, we go through a rigorous process, including an accounting officer process. I would, and will, only seek a direction if, at the end of that process, I consider one is needed. Those are the judgments that I will make on a rigorous basis for all of these investments.
Q62 Mr Bradshaw: But you have never done one.
Dame Bernadette Kelly: I have done directions on technical matters. I have not needed to seek one on a major project yet because I have always sought to ensure that there is a viable way of proceeding that is consistent with managing public money. That is what I seek to do.
Q63 Mr Bradshaw: I think we are going on to my series of questions now. Which projects are you going to have to cancel or delay that are currently—
Dame Bernadette Kelly: That is a set of decisions that Ministers will need to take.
Q64 Mr Bradshaw: But if Ministers insist on doing things that are clearly undeliverable and unaffordable, you will then issue an instruction, I take it.
Dame Bernadette Kelly: I have no reason to suppose that Ministers will do that, so I am not going to comment on a hypothetical situation. Clearly, as with all my accounting officer responsibilities, I would consider whether, and if, directions were required.
Q65 Mr Bradshaw: On what basis will you advise Ministers which projects to cancel or delay?
Dame Bernadette Kelly: Ministers take decisions on the basis of a range of factors, including value for money, the fit with their strategic objectives and the strategic case for that project. That may include, as I say, regional distribution, levelling up and those sorts of matters—certainly carbon and so forth as well—and deliverability. Those will be the criteria that I would expect a Minister to take into account.
Q66 Mr Bradshaw: Given what you have already said, it sounds as if the A303 Stonehenge and the lower Thames crossing are just not going to happen. They are impossible.
Dame Bernadette Kelly: I am not making any comments on decisions that have not been taken.
Q67 Mr Bradshaw: But if you do them, you are going to have to scrap the whole of the rest of them.
Dame Bernadette Kelly: I am sorry, you are asking me to anticipate decisions that Ministers have not yet taken. I think Ministers will need to take decisions and then account for them.
Q68 Mr Bradshaw: But what if Ministers insist on going ahead with everything for political reasons, because we are running up to an election, and projects are clearly not deliverable, were not deliverable last time and are not deliverable this time? Come on, you are responsible for the spending of taxpayers’ money.
Dame Bernadette Kelly: And I will be giving robust advice to Ministers to ensure that we are not entering into a series of commitments that there is no plausible way, within the funds available, of delivering. I accept that is my job, but I think you are anticipating a set of circumstances that I very much hope will not arise.
Q69 Mr Bradshaw: What are the implications of what you have just said for RIS3 projects? Is there really any point in starting to draw up a list of proposals if we are so far behind on RIS1 and RIS2?
Dame Bernadette Kelly: Obviously, there are already a number of projects in what we call a RIS3 pipeline. These are very early development projects. It is true that the headroom for new projects in RIS3 will be very limited.
Mr Bradshaw: It is pie in the sky stuff, basically, Chair. Thank you.
Q70 Chair: When the Secretary of State was before us before Christmas, he wanted a bit of time to look at how he was going to allocate his budget between different transport modes, and then within each mode what the priority was going to be. In terms of timescale, when could we expect to see some decisions being made?
Dame Bernadette Kelly: That process is still happening. It is exactly as you say. The Secretary of State wants to be able to look across the whole of the transport portfolio and work out what is the best way of living within the spending review settlements that have now been confirmed, bearing in mind inflationary pressures. That work is still going on. I expect a conclusion soon. Certainly, the March Budget will be a significant moment, I would have thought, for the totality of the Government’s spending plans, but I am afraid I cannot give you a date.
Q71 Chair: I am not asking for a specific date. As a former Minister, I know the elasticity of the term “soon”.
Dame Bernadette Kelly: Indeed, but clearly we are going into the next spending year soon, so I am keen to ensure early decisions.
Q72 Chair: Are we likely to have that decision this side of Easter? This Easter.
Dame Bernadette Kelly: As an official, I think the Budget is a significant moment. Clearly a lot of our support for the Secretary of State as he considers those choices is linked to that, but I will not say more and give you a date.
Chair: I appreciate that. Thank you.
Q73 Jack Brereton: First, can you give us an update on the progress you are making in the planning of RIS3? Ms Ward?
Emma Ward: As I mentioned earlier, we are hoping to issue a consultation around RIS3 development shortly. We have already been working on that for some time, as have National Highways; Mr Harris will be able to say more about the quite detailed work that they have been doing. The consultation will talk about the strategic objectives for RIS3. It will probably recognise what Ms Kelly has just said, which is that the make-up of RIS3 may well look a bit different. It is likely that the headroom for enhancement projects will be less. We also have an ageing network, so the importance of renewals and maintenance increases over time. I expect the balance of RIS3 to look somewhat different from RIS2 and the consultation will begin to set that out.
It will then kick off a set of engagements around the pipeline for those objectives and around the balance of the portfolio, and then the process will go forward to ensure that we can set a strategic roads investment period well ahead of April 2025.
Nick Harris: A lot of detailed work has been going on for some time now. There are three important documents that we will publish in due course. One is the initial report that will kick off the consultation period. The initial report gives the detail of what we have already done and our thoughts for what could go into RIS3. Alongside that will be the route strategy. There are 20 strategic routes that we have worked on. A lot of work has been done on those strategies, together with sub-national transport bodies, MPs across the country and other stakeholders, with feedback from user groups like Transport Focus. That has all gone into the strategies.
The third document, which is very important, looks forward to 2050 and connecting the country. It is thinking about what will be the need for roads in the future and thinking about all the changes in technology and connecting autonomous vehicles, and achieving the challenging environmental targets that we have set ourselves. What will that world look like, and what part will RIS3—the third road period—have to play in connecting us with that?
There are those three documents. In all of that, of course, will be our view on the effect of inflation and the work that will have started in RIS2 and will continue into RIS3. A really important point, certainly from my point of view, is that we are looking after an ageing set of infrastructure. More than 70% of our assets, as we get to the beginning of RIS3, will be more than 45 years old. A lot of bridges were built in the 1960s and 1970s, as well as roads. They increasingly need renewal or replacement. That will all be in the plan.
The final thing to touch on is technology. We are increasingly deploying technology out on the network as well as in the systems that support it and that deliver the service that we aspire to for everyone using our roads. Technology tends to have a shorter renewal cycle than roads. Roads might last 20 to 30 years and bridges 60 years, so you can plan them on a very long-term horizon. Technology tends to have a five to eight-year renewal cycle. It is important that we put funds into the road period to ensure that we look after that, and the technology that is coming for the connected and autonomous world that I touched on earlier.
Q74 Jack Brereton: As you suggest, a significant number of the projects that were already approved are going to have to transfer over. That is double what you were expecting, with £11.5 billion now having to go over into RIS3, which means there is very little in terms of what you can actually achieve for new projects in RIS3. Are you looking to re-profile some of what was planned, or de-scope some of the projects entirely from RIS3?
Dame Bernadette Kelly: Again, I think that all falls into the category of decisions that Ministers will need to take. There is an initial set of decisions that they will take, which is the process now.
Q75 Jack Brereton: Which projects are you recommending should not be done?
Dame Bernadette Kelly: I am not going to offer any running commentary, I am afraid, on the consideration of Ministers in terms of conclusions they might draw on phasing or scoping of projects while that process is still going on.
Q76 Jack Brereton: But you are saying that there are projects that you were planning to do that you are not going to do.
Dame Bernadette Kelly: I am not offering any commentary. I am simply saying that there is a process going on where the Secretary of State and Ministers are working through the conclusions of the autumn statement to ensure that we have a plan going forward, including in relation to delivery of outstanding RIS2 schemes, which is consistent with the money available.
Q77 Jack Brereton: On moving forward with that, my colleague Paul Howell touched on some of the geographical spread of projects across the country. Previously, 80% of projects have been in London and the south-east, which is obviously extremely concerning given the need of the Government to level up and spread projects around the country.
What is being done in RIS3 to make sure that we have projects around the country? In my own area, as you will be aware, we are trying to have junction 15 of the M6 as a RIS3 pipeline scheme. What are we doing to make sure that there is a better spread and balance of projects right around the country?
Emma Ward: The geographical spread is absolutely something that we will be looking at through the RIS3 consultation. Mr Harris can say a little bit more about some of the work that they have done in the run-up to that. It is certainly something that is central to Ministers’ minds for considerations that need to be socialised and discussed as part of the RIS3 consultation process.
Nick Harris: We are again focusing on the enhancement spend, which is important. As we talked about earlier, a significant and probably growing proportion of what we spend in RIS3 will be on looking after existing assets. That matters regionally. We are making sure that it is spread evenly across the country. That is one point.
Q78 Jack Brereton: How are you going to do that, though? Clearly, what you have done previously did not work because we ended up with a situation, as I have just said, with 80% of the projects in one part of the country. What is it that you are now doing differently that will mean we are not in that sort of situation again?
Nick Harris: The 80% number is just the enhancement projects. The renewal spend is spread evenly across the country.
Q79 Jack Brereton: Obviously, but we are interested in RIS3 enhancements. Why was it that we had 80% in one part of the country? What is it that you are doing differently now that is going to make sure that that does not happen again?
Nick Harris: I will say two things about that. One is that some of the pattern that is behind the 80% is in the delays that we talked about earlier. That has moved the portfolio around and has been a factor.
The thing I would like to say—I mentioned it earlier—is that we have done a document that contains the 20 route strategies. Of course, the routes are necessarily very long. We are looking at how we connect the country. It is important for the Committee to note that where the spend is taking place may not be the location where the economic benefit is felt. There needs to be a view of, yes, where—
Q80 Jack Brereton: But there are serious problems on parts of the network with major congestion. That congestion is not just a problem in one part of the country. We have serious issues of congestion, air quality issues and safety issues right around the country that need to be addressed. Why is it that there does not seem to be any approach to make sure that we have a good spread of these projects in different parts of the country?
Nick Harris: In the route strategies there is a mixture of regional and more local problem solutions. We have largely got the network that we need. Some of the enhancements, yes, were about solving local congestion or air quality issues. They are in the initial report.
There are some of a much more strategic nature that help to support the connection on some of the larger strategic routes. There is a mixture of those in the initial report. They will then go into the consultation process, and levelling up and distribution will be—
Emma Ward: Ministers are very conscious of that, and will be conscious of that as we go through the consultation.
Q81 Jack Brereton: But are they being led by the formulas that you are using around BCR assessment? Does that lead to meaning that projects are only going to get across the line in London and the south-east?
Dame Bernadette Kelly: No, I really do not think it is. You talk about things like air quality and congestion. The same value is attached to those wherever they occur in the country. Of course, that would feed into a BCR case wherever those effects were being felt. There is no differentiation.
I feel I always have to say two things. First, in the quantitative assessment that we do to underpin our BCRs, we are constantly looking for ways to ensure that these sorts of regional disparities are fairly captured and reflected. That is why we have things like a levelling-up toolkit associated with our appraisal methodology.
The second important point, which I have also previously referred to, is that the strategic case is part of the consideration. It is not purely a BCR-driven decision. Ministers will look at the strategic case and how projects support the wider strategic goals of the Government. For this Government, obviously, levelling up is an important strategic goal.
Q82 Jack Brereton: I want to ask you one final and separate question, which is about skills. Obviously, we have a very large number of projects, not just roads, but HS2, rail projects and housing projects right around the country which are sucking in a lot of skills. What are you doing to make sure that we have the skills coming through to be able to deliver many of these schemes?
Dame Bernadette Kelly: You are right to highlight the challenge. There is unquestionably a challenge around the broader skills and capability in the construction sector. It is something that both I and my colleagues in the IPA and other Departments are looking at.
Mr Harris, in National Highways, has his own approach to how he ensures that he is building skills and capabilities. It is perhaps worth him saying a bit about that. At HS2 Ltd, Network Rail, ditto; they have very active approaches to skills and capability building.
Nick Harris: You are right to raise it. It is an issue. In RIS2, we support through the supply chain something like 65,000 jobs, which is two or three times the size of the workforce supported by HS2. It is a big challenge to maintain that capacity and capability, and we are seeing new challenges and new things that we have to deal with. It is not just civil engineering; it is capability in dealing with the environmental challenges, be that air quality, biodiversity, carbon or technology.
We are addressing that in a number of ways. As National Highways, we have a very strong graduate and apprentice programme. I have doubled it in each of the last two years, and we will carry on promoting it. We are also looking at other entry routes into the company. Together with our supply chain, we have the Roads Academy. HS2 and Network Rail have similar. That is about bringing more people into the sector and giving them the skills that we will require now and in the future. It is one of the things that is at the top of my mind.
Q83 Paul Howell: I am not sure how well we are going to go with this next one. We have had questions about incorporating the lessons from RIS2 into RIS3 and about how you are going to assure yourself that the next road investment strategy will be delivered on time and in budget. Given the discussions that we have already had, I do not understand how you control the budget in the first place, so I am not sure where you can go on this. What I would like you to do is try to give us some confidence as to what you are going to learn from RIS2 as you take it into RIS3 and get yourselves into a place where we have a much better chance of finding things delivered on time, in budget and in control, so that we eventually have confidence that there is a control mechanism.
Dame Bernadette Kelly: I will offer a few suggestions, probably largely emphasising some previous points. I will also invite both Emma and Nick to say a bit.
I think we have learnt a lot about some of the particular risks associated with large projects through RIS2 and large road projects in particular. I am sure we will be embedding that learning. It raises some questions about the management of contingency and the scale at which you set contingency when you have those projects, depending on where they are in their development. We will certainly want to reflect on that. I think we learned—
Q84 Paul Howell: Something has just occurred to me. In terms of your learnings on all of this, can you elaborate a little bit on the expertise of your team? There are many big organisations in the UK who run massive projects in the private sector. I would be interested to know whether you have people from there, or whether your team consists of people who have never been out in the real world.
Dame Bernadette Kelly: There are probably three areas that we could talk about. One is within National Highways, obviously, which is where our frontline of capability and resource needs to be. The second is within the Department. We also draw on assurance, scrutiny and challenge from the Infrastructure Projects Authority, which is within the Treasury. Perhaps, Nick, you would like to kick off.
Nick Harris: I myself have significant private sector experience delivering large projects in this country and others. To give a little balance, the way we manage projects in the portfolio has developed significantly from RIS1 and into RIS2. It is important to note that, of the 17 schemes that we have delivered so far in RIS2, 10 of them were delivered ahead of their planned dates.
For a good portion of the programme in RIS2 we are delivering well, but there are some larger, challenging projects, which we have already talked about. We are continuing to develop our capability. We continue to build on our own in-house capability to manage projects and the portfolio well. The NAO report and the work we do with the IPA, ORR and others gives us important insight into what we can do to improve.
If I was to pick on one of the big things that we can do as we are looking at RIS3, probably the biggest would be that the earlier you start, the better. It is the amount of work that goes into the earliest stages of the development of both projects and the portfolio that drives the greatest value. Once you have got to construction, things do not change so much, and your opportunity to improve value is more limited. The earlier you start, the better. It is understanding that the development of a road scheme is a 12 to 15-year pipeline. The work that goes on in the first four or five years is incredibly important. That is an important lesson.
Around contingency, the lesson we learnt moving from RIS1 into RIS2, and thinking about RIS2 and RIS3, is again one of timing. As we set the contingency, it is important that, following the efficiency review that the ORR will do as part of the process, we set the baseline for RIS3 and determine the contingency pot at that time.
There are a couple of other things that we have learnt, again through the RIS1 to RIS2 transition. We have become more effective at how we drive innovation in the programme. A good example is that we put in a new contracting framework called the RDP framework for RIS2. One of the contracts that we have recently signed, which is for the roads north of the lower Thames crossing, has been signed under budget because we have now been able to drive the innovation and the environmental standards that we set out to achieve. It has taken longer than we originally planned, so that is another lesson about starting earlier. The other is the importance of having strong performance frameworks, that are the right length, with the supply chain. We started that in RIS2, and we are going to improve it as we go into RIS3. Those are probably the things that are top of my mind.
Dame Bernadette Kelly: Do you want to say something about capabilities, Emma?
Emma Ward: Skills and capability within the client team in the Department is a very good question and one that, as Ms Kelly said, we have worked quite hard on, in increasing the senior capability in particular and the capability throughout. My client team has a mix of project delivery professionals in it. Obviously, National Highways is the frontline SRO for the projects, but we need to be an intelligent client. We need to be able to scrutinise them. Those people bring with them a mix of experience, both from the private sector and from other big infrastructure projects, whether that is rail or elsewhere in Government. Yes, they are project delivery professionals in that client team.
Dame Bernadette Kelly: As I say, we draw on the IPA for independent assurance, and so on, of all of our major projects that are part of the GMPP, the major projects portfolio of Government. The IPA is staffed by people who are project professionals, many of them with external experience of project delivery.
Q85 Paul Howell: I have a final point looking at risk and changes. As you said, in any project the later the changes, the more expensive they typically are. That is what a lot of construction or other companies do. If you put in a spec of A and it becomes A-plus, the plus becomes very expensive because of all the variations that go on. We all know that.
In terms of front end, and what you were saying, Nick, what is your approach to having a continuum of risk awareness management, so that you can see what is coming down the road at you—to use the metaphor—and see the next problem that is likely to occur, whether because of environmental changes, policy changes or a war in Ukraine? You might not have been expecting me to say that, but things hit you from left field.
Nick Harris: Yes. What is the next thing? Maybe a better crystal ball. There are a number of things we have done. One is to improve our capability and the skills we have in the development of the early phase of projects. A feature of RIS2 was creating the pipeline of 32 projects for RIS3. That was having a much better structured approach to the early phases of the development of projects.
We access greater skills through our supply chain, but also through the changes in the DFT team and the strengthening, as has been described, in that team. We work together to understand the implications of either existing or future Government policy. There is regular contact with the Planning Inspectorate, again to understand trends and what is happening outside the road sector, with recommendations that we can build into the way we develop schemes so that we do not have later changes that affect the scope and therefore the cost.
Q86 Jack Brereton: I want to ask about air quality. We have seen some very serious breaches of air quality on a number of parts of the network, including air quality issues in my own constituency on the A500 and A50. In a number of those areas there are no plans or solutions for how we are going to address those issues. Are you concerned about potential legal challenges that you are going to face if you do not achieve compliance throughout the network?
Nick Harris: We take air quality very seriously. I appeared in front of a Public Accounts Committee in the latter part of last year, talking about the challenges we face.
Q87 Jack Brereton: You say that, but on many parts of the network you are not coming up with any solutions as to how to address this problem.
Nick Harris: Yes, it is a challenge. We have a number of sections or links of the network that are in exceedance of nitrous oxide. It is a problem. I am clear that as an organisation we will leave no stone unturned in looking for solutions. We are doing a number of things that have beneficial impact. I am clear that it is not enough, and we are continuing to develop new tools. They include things like barriers and speed restrictions.
Q88 Jack Brereton: They proposed a 9-metre barrier in my constituency, but then said, “It is unviable, so we’re not going to do it.”
Nick Harris: We are looking at everything. Some of the ideas we have come up with are, on closer examination, either not viable or not going to be beneficial. Probably one of the biggest things we are looking at for the A500 is changing the route that trucks use on their way to the M6.
We will continue to work to find solutions and mitigations. I know it does not help, but in time the vehicle fleet will change to low emission vehicles. That is not stopping our search for things that we can do in the meantime to improve the air quality.
Q89 Jack Brereton: On the legal point, are you concerned about legal challenge? The regulations around this have become even more stringent with some of the legislation that we are rightly putting through now. That is obviously going to potentially impact on you even more.
Nick Harris: It impacts on us in two ways. We take the obligations very seriously. Of course, because of the legal position we are obliged to seek to mitigate the position, which is what we are doing—in fact, it could always be legally challenged—and I think we can demonstrate that we are doing that well.
The other impact is through planning. If projects are being developed in areas where there are air quality issues, we have to demonstrate that we are not having an adverse impact on the environment, which includes air quality. It will be part of the development of the scheme, and us demonstrating that we can meet the legal requirements for it.
Q90 Chair: Before I turn to Gavin, I want to ask one question. I am aware that on a number of stretches of the motorway network you are running experimental reduced speed limits, to 60 mph. There is one on the M6 in Birmingham and one on the M1 in Sheffield, I believe. Those are experimental. Can you tell me a little bit more about how they will be appraised, and who will make the decision and who you will be accountable to if you decide to make them permanent?
Nick Harris: Of course. There are five locations where we are using speed restrictions to see what beneficial impact they have on air quality. The origin of it is work that was done in Wales. There was some work done in Scotland as well. They reduced the speed limit in Wales to 50 mph and were able to demonstrate a reduction in pollutants. Based on that work, we are trialling it in the five locations that I mentioned.
We are going to publish a report later this year on the data. We have had to take more time to get data because, during covid, there was a reduction in traffic volumes, so it was not necessarily representative. We now believe we have a representative dataset. We are going to publish the results of that and our recommendations.
Q91 Chair: But there won’t be a decision at that point: “We’re going to make this permanent”?
Nick Harris: I do not think there will be a decision to make it permanent because, of course, as the vehicle fleet changes, many of these links will come into compliance because of the take-up of low emission vehicles. I do not think we would ever be looking for a permanent implementation, but depending on what we present in the reports we might be looking to continue the temporary use of speed limits if we can show that they are beneficial.
Emma Ward: I was going to add a similar point. It is something that we take very seriously. As Nick says, National Highways is using all of the tools in its toolkit to try to reduce air quality issues across the network. It is a temporary issue while emissions remain high, but as the vehicle fleet changes it will reduce. I think Ministers will be interested to understand what the data from the trials says and whether it is deployable across the network. To your question, who would take those decisions, I think Ministers would wish to see that and to have a conversation with National Highways about what measures they have at their disposal to address issues across the network.
Chair: Thank you, that is helpful.
Q92 Gavin Newlands: To continue the environmental theme, Bernadette, if we look at the rest of your objectives, one of the DFT objectives is improved environmental outcomes. How will you ensure that RIS3 aligns with that objective?
Dame Bernadette Kelly: Again, I may pass the question on to Emma. The point about RIS3, as with all complex capital portfolios, is trying to manage the balance between different objectives and to get that right. Clearly, environmental objectives, whether that is Net Zero, biodiversity or air quality, will be a very important set of issues that we will need to think hard about as we develop RIS3.
Emma Ward: One of the lessons that we can take from RIS2 in thinking about how we develop the portfolio for RIS3 is precisely the contestability. The legal challenges that we had on carbon have been much more significant than we ever anticipated. We need to look beyond carbon at issues like air quality and biodiversity. We are watching very carefully the implementation of the Environment Act from last year. The briefing that you will have had on the national policy statement last week will, hopefully, have exposed some of the thinking that we have been doing about how we embed and approach things within that framework. That will give us a bit more certainty than we had through the RIS2 period. It also means that the road schemes that we are bringing forward are aligned and compliant, and make the contribution that they need to make on those environmental factors, whether it be carbon, air quality or biodiversity.
We have a number of levers. The national policy statement is one key element of that in new projects. There is also the work that Mr Harris has referenced which National Highways is doing to mitigate existing impacts on the network. That is also important. As we move through to the development of the RIS3 portfolio, we need to look at the balance of that in terms of the impact that it will have and the legal contestability and deliverability of it in the context of those environmental factors.
Q93 Gavin Newlands: There are two further objectives. We are certainly looking forward to the alignment in managing the planning of the road network for the future and a technology enabled network. That brings me to the EV charging infrastructure. What role is that going to play? Is it going to play a bigger role in the RIS3 discussions than it did for RIS2? The A9 dualling project in Scotland is quite complex and difficult for a number of reasons. Alongside that, there is the so-called electric highway. What role does it play?
Dame Bernadette Kelly: I might say a little bit, but I suspect Nick could say more about how National Highways is thinking about charging infrastructure and the role that it can play in its management of the strategic road network.
Clearly, if we are to tackle Net Zero, we have to tackle emissions from road transport. Transition to zero emission vehicles is absolutely critical to our approach to Net Zero and the transport decarbonisation plan as set out. Those targets are all about phasing out tailpipe emissions for cars, vans and HGVs. I will not repeat them here because they are a different policy debate.
What we are doing within Government is investing in charging infrastructure, and stimulating rapid charging at motorway service areas is a key part of that enabling investment from Government. We are also working with local authorities to support their roll-out of publicly available charging at local level. All of that is absolutely critical as part of the transition to zero emission vehicles.
It is not the only thing. A regulatory framework is critical as well. That has been important in the targets that we have set to date. The zero emission vehicles mandate, which is due shortly, will be an important further milestone in how we set the trajectory towards zero emission vehicles. I think the charging infrastructure is important. I have touched on what we are doing in Government, but perhaps Nick can say more about how National Highways is handling this on the strategic road network.
Nick Harris: The questions you have raised are in the initial report for RIS3. If we are to support the switch to EV or low emission vehicles, that becomes part of the necessary infrastructure. It is not just the roads. We have included those points as important questions that we need to address in the creation of RIS3.
What else are we doing? We have talked about motorways and the provision of high-rate charging points at motorway service areas. We are working with Project Rapid, which is designed to support that, to create the connection from the electricity grid to motorway service areas so that those charging points can be created.
We are also looking wider than that because we look after A roads as well as the motorways. There is the importance of charging infrastructure on those. Through our designated funds we are supporting a number of schemes to see how we can develop higher rate charging in locations where there isn’t access to electricity infrastructure that will easily support higher rate charging points. We are looking at batteries and a combination of wind and solar battery storage for charge points, as required. We will continue to support that.
In our own fleet, we are changing low emission vehicles rapidly. You may have seen them out on the road network. Increasingly, the traffic officer vehicles are hybrid vehicles, but we are moving the rest of our fleet to electric vehicles.
Q94 Gavin Newlands: I do not want to get side-tracked on this specific issue, but on the charging network, most people will be supportive of the principle of the ZEV mandate, but we have to have the infrastructure in place, otherwise it is all a bit pointless. I think we need to hit 31,000 a year to meet the Government’s target of 300,000. Last year, I think it was just under 8,000, and that was an increase. Where are we going to be this year? Could you hazard a guess as to how many chargers will be installed this year?
Dame Bernadette Kelly: You are talking about local public charging, by the sound of it.
Q95 Gavin Newlands: I am talking about the totality.
Dame Bernadette Kelly: The totality? Going back to what I can comment on, I think we are on track to achieve the Project Rapid target, which was to have at least six open access rapid charge points at MSAs by the end of 2023. Clearly, that is an important part of giving confidence that there will be charging facilities on motorways. I do not have a figure available for future local authority roll-out. I would have to come back on that.
Q96 Gavin Newlands: I didn’t think you would, to be honest, but I thought I would ask anyway. To meet our climate change targets, we are going to have to move people over to zero emission vehicles, but in all likelihood people will have to reduce car usage as well to meet those targets. Is there an aim in the Department to reduce car usage? In Scotland there is a target to reduce car usage by 20% by the end of the decade, and all the transport policies are filtered through that prism. Is there an aim in the Department? If so, what role does that play in discussions around RIS3? If not, why not? That is more a question for a Minister, to be fair.
Dame Bernadette Kelly: That is a set of policy choices, but I can comment on where we are. Obviously, the focus of UK Government policy is on driving the transition to zero emission vehicles so that people can drive without contributing to carbon emissions. That is the focus, rather than targets for reduced road usage.
Equally, though, we are trying to mode-shift where it makes sense, with people using public transport and active travel for local journeys and short journeys. Those are things which we are actively supporting, but the focus for road transport is to drive the transition to zero emission vehicles.
Q97 Gavin Newlands: So the answer is that there is not an aim to reduce car usage. Your answer leads me on rather well to my next question. Essentially, RIS2 has many large and complex projects—expensive projects—which have not been delivered. Given the points that have been made so far this morning, and the points you have just made, what consideration have you given to tweaking some of those projects and potentially making it easier for people to use less expensive solutions, such as public transport or active travel? Has any consideration been given to changing anything that was in RIS2 because of considerations with regard to active travel?
Dame Bernadette Kelly: At a high level, RIS2 is principally concerned with significant enhancements to the strategic road network. Those are not typically local public transport journeys or the sorts of journeys that people would be taking by bicycle. Obviously, we want to encourage people to have the opportunity to use public transport and to travel by bicycle or foot where they can, but that is less an issue for the design of RIS2 projects which, by definition, are on the strategic road network, which is not where those journeys take place.
Nick Harris: That is true, but thinking about active travel or modal shift is included in the project. I mentioned earlier the A417 project in Gloucestershire which is called the missing link Air Balloon—a great name for the project. It highlights that it is dealing with a section of the road that creates great congestion and safety issues. At the same time, we are taking the opportunity to link a number of villages so that it will be possible to walk or cycle between them rather than getting into your car and driving.
We always think about how we can have a beneficial impact on the communities where we build improvements, which, by their nature, are strategic, and can promote active travel or other modes of transport. Yes, we need to help with that.
Chair: There are two quick supplementary questions in this section, and then Grahame.
Q98 Mr Bradshaw: To follow on from Gavin’s question, if you are facing a situation where you are likely to have to pause or scrap certain schemes because they are no longer value for money, and these schemes were very much desired in a particular region, is there any reason why you, or Ministers on your advice, could not take the decision to shift the resources that were going to be spent on those very expensive road schemes into delivering much cheaper active travel schemes across the whole region that could transform and revolutionise local transport and people’s lives?
Dame Bernadette Kelly: In principle, Ministers can of course take whatever decision they wish about the mix of investment as between different modes. I think when the Secretary of State was here, he said that he was trying to look at this in the round, and was also keen to ensure that local transport, for example, was not unduly impacted upon. I think he is very keen to ensure that those sorts of local transport journeys are absolutely taken into account in any challenging decisions that may need to be taken.
By the way, I want to challenge one point. You talked about value for money. The challenge that inflation creates is an affordability challenge for Government, which is somewhat different from a value for money challenge. I just wanted to make that point.
Q99 Grahame Morris: I want to clarify, if possible, something in relation to RIS3 and the zero emission mandate, and discussions I had with some vehicle manufacturers. Nissan is located quite near to my constituency and we have lots of companies in the supply chain. They are very keen to have more information about the zero emission mandate and what the implications are, so that when they are forward planning the manufacture of their new models, they can factor in the requirements.
I also want to flag up the considerations for commercial vehicles and commercial vehicle manufacturers. That is the logistics supply chain, lorries and buses. We did a very good report into infrastructure and highlighted some of the deficiencies in lorry parks, not just facilities for drivers, parking, washing and toilet facilities, but charging facilities. If we are to meet the targets and have modal shift, so that more people are using electric buses, will that be factored in as part of the RIS3 plans?
There are issues around grid capacity for charging points, without the call from HS2 and everything else that is going to be placing demands for additional power. Can I flag that up, and do you have any particular thoughts on that, Dame Bernadette or Nick?
Dame Bernadette Kelly: I will ask Nick or Emma to talk about the lorry parking. On the zero emission mandate, I absolutely note what you are saying. Of course, the whole purpose of the ZEV mandate is in part to give more certainty and clarity to manufacturers, which we recognise is an important part of the pathway to zero emissions.
Emma Ward: You are absolutely right; lorry drivers are a hugely important part of the economy. They move 80% of the freight across our road network, so looking after them is really important. The quality and capacity that we have across the strategic road network has long been a matter of criticism from the industry. We know that we have a shortage of lorry parking spaces. I think the latest survey that we did suggested a shortage of around 5,000 in terms of capacity. The quality of roadside facilities also contributes to the driver recruitment and retention issues that we have seen, and has been exacerbated over the course of the pandemic as well.
Our approach is in a number of areas, and this is where National Highways is working quite closely with the Department. We have a grant scheme that was launched just before Christmas to support the improvement of facilities. That is supplemented by some funding that National Highways has from its designated funds. There is about £50 million of grant funding from the Government to be matched from MSAs that wish to improve their facilities.
Going beyond that to where we are going to build the capacity, again that is a point that we will want to explore through the consultation on RIS3. The steps that we have taken are actually in the planning process. It is quite difficult for private sector investment to get through the planning process in a timely way. It just increases the cost of providing those facilities.
Q100 Grahame Morris: That was one of the issues that the Committee report highlighted. It is really national infrastructure, but there is tremendous local resistance from local authorities, who are under pressure from their own local populations.
Can I press you again, Dame Bernadette, in relation to the zero emission mandate? It is going to apply to commercial vehicles as well, isn’t it?
Dame Bernadette Kelly: That is my understanding. I believe so. I think it is looking at their trajectories to achieve the targets we have set out in the transport decarbonisation plan. I will double-check, but that is my understanding.
Q101 Grahame Morris: If it is, that will be reflected in the infrastructure planning for lorry parks and others to have charging facilities incorporated.
Dame Bernadette Kelly: Absolutely. That is why it is really important, because it is setting trajectories for all parts of the system which then need to respond to that.
Nick Harris: It is within Project Rapid.
Q102 Chair: I would like to conclude this session in the next few minutes. Finally, I would like to return to the issue of smart motorways, not to look at the strategic decision of whether they are good or bad, dangerous or safe, but how we can properly assess their current performance, and how that will influence whether they form part of RIS3 or not.
We have recently seen some alarming reports about the performance of the technology on the motorways, particularly the stopped vehicle detection system. Mr Harris, when you were before the Committee last summer you expressed some confidence that the roll-out target would be met in the autumn and achieve the specification. That does not seem to be happening. What has gone wrong?
Nick Harris: On SVD, I was drawing the attention of the Committee to the second anniversary report, which was published in May last year, and gives a lot of detail on the safety performance of smart motorways all-lane running. We are hard at work at the moment on the third anniversary report, which will be published in the spring with additional data.
Thanks to the recommendations of your Committee, we have delivered the SVD roll-out—if you go right back to the beginning—something like two years faster than we had originally planned. We met the commitment to get SVD implemented on all existing all-lane running stretches of motorway. We are rolling it out as we open the new bits that we are finishing off. It is working and it is adding significantly to safety, alongside all the other systems that we have in place.
You will have seen, when the ORR reported in December, that many of the instances of SVD were completed in the August/September period, when we were still in the commissioning phase with the data that the ORR report talked about. Many of the schemes are not meeting the very challenging performance specifications we have set. Two of the most prevalent issues we are dealing with are, first, the number of false alerts, which is an issue for the operators. It is spotting things but the operators have a higher workload than is ideal. The other thing is the time it takes the system to alert. The target is 20 seconds and we are achieving something like 40 seconds at the moment, but it is working and it is adding significantly to the tools that we have available to further improve road safety.
I have a very closely managed programme going on at the moment to ensure that the systems we have already implemented and the ongoing commissioning of new ones will achieve the performance specification later this year. I think we have set July as the target for that. It is the largest implementation of this technology in the world. We are the first to be doing it. It is an important addition to road safety. We are very committed to getting it to that standard, but it is adding significantly to road safety at the moment.
Q103 Chair: To clarify, the poor performance last autumn has now significantly improved, and will further improve.
Nick Harris: Yes.
Q104 Chair: In a nutshell, is that what you are saying?
Nick Harris: In a nutshell. Many of the schemes had just been implemented in the autumn. They were then continuing with the commissioning. I would not characterise the performance as poor. They were operating at a good level of performance, but not at the very high level of performance that we put in the system specification. We are working towards it.
Q105 Chair: This technology is in place right now. There is a live potential safety issue on motorways as we speak. Are you saying that they are safe at the moment?
Nick Harris: Before we implemented this technology, the motorways were safe. We have implemented a technology that is making them even safer. The technology is working to a high level, which adds significantly to what we can do to further improve safety, but we are not yet satisfied that it is operating at the level that we specified.
Chair: Thank you for that. I am sure this is an issue we could continue to discuss at length, but I am afraid the clock is against us. I thank you for your time this morning and for answering all our questions. This is the first session of our inquiry. There may be issues that we wish to come back on, depending on what we hear from other witnesses, but for now thank you again for your time this morning.