How the MAC is driving improvements and efficiency Tony Wittering

Setting the scene Hybrid Traditional / Performance Based Contract Working together to achieve Safe roads, Reliable journeys, Informed travelers for the benefit of the community HA Maintenance Community Setting the scene Hybrid Traditional / Performance Based Contract Started in 2000 - 15 contracts by geographic area – only 4 remain MA/TMCs with Area 10 due for competition as a MAC Each normally 5 years with option to extend to 7 years

Setting the scene Contract with a single private sector entity Working together to achieve Safe roads, Reliable journeys, Informed travelers for the benefit of the community HA Maintenance Community Setting the scene Contract with a single private sector entity Monitoring network and the maintenance requirements Routine maintenance, Winter service, Emergency response Minor improvements to an agreed limit

Working together to achieve Safe roads, Reliable journeys, Informed travelers for the benefit of the community HA Maintenance Community Setting the scene Lump sum payment / output based- Routine maintenance, winter service, emergency response Time and activity based payment – Monitoring network and identifying maintenance requirements EMAC looking at Cost plus fee and bonus – minor improvements

Setting the scene (cont.) Working together to achieve Safe roads, Reliable journeys, Informed travelers for the benefit of the community HA Maintenance Community Setting the scene (cont.) The following slides look at some results in respect of contract performance Taken from a study undertaken last year that has to be updated, they demonstrate a rate of improvement that is both welcome and supportive of the MAC format. They demonstrate clear improvements in Surfacing rates Scheme management Improved cost certainty

Surfacing HA Maintenance Community Working together to achieve Safe roads, Reliable journeys, Informed travelers for the benefit of the community HA Maintenance Community Surfacing

Surfacing HA Maintenance Community Working together to achieve Safe roads, Reliable journeys, Informed travelers for the benefit of the community HA Maintenance Community Surfacing

Surfacing HA Maintenance Community 15.5% Reduction on 2002/03 Working together to achieve Safe roads, Reliable journeys, Informed travelers for the benefit of the community HA Maintenance Community Surfacing 15.5% Reduction on 2002/03

Working together to achieve Safe roads, Reliable journeys, Informed travelers for the benefit of the community HA Maintenance Community Timecharge The study showed how MACs have increased their output, providing a welcome indication of more ‘bangs for our bucks!’ One Area reported Time charge as a percentage of total budget was the same in 2003/04 and in 2004/05.

Timecharge 1 HA Maintenance Community Working together to achieve Safe roads, Reliable journeys, Informed travelers for the benefit of the community HA Maintenance Community Timecharge 1

Timecharge 2 HA Maintenance Community Working together to achieve Safe roads, Reliable journeys, Informed travelers for the benefit of the community HA Maintenance Community Timecharge 2

Timecharge 3 HA Maintenance Community Working together to achieve Safe roads, Reliable journeys, Informed travelers for the benefit of the community HA Maintenance Community Timecharge 3

Working together to achieve Safe roads, Reliable journeys, Informed travelers for the benefit of the community HA Maintenance Community Timecharge 4 - Indexed comparison of timecharge and total net turnover over time

Predictability Cost and Time Predictability (APIs 6& 7). Working together to achieve Safe roads, Reliable journeys, Informed travelers for the benefit of the community HA Maintenance Community Predictability Cost and Time Predictability (APIs 6& 7). The following slide shows the MACs having a more predictable pattern over the longer period with the application of Statistical Process Capability showing consistent processes are in place.

Predictability - API 6 (time) and 7 (cost) HA Maintenance Community Predictability - API 6 (time) and 7 (cost)

Working together to achieve Safe roads, Reliable journeys, Informed travelers for the benefit of the community HA Maintenance Community Continual improvement in early scheme delivery and in scheme management

Improved cost certainty and reduced risks – one Area’s data Working together to achieve Safe roads, Reliable journeys, Informed travelers for the benefit of the community HA Maintenance Community Improved cost certainty and reduced risks – one Area’s data

Working together to achieve Safe roads, Reliable journeys, Informed travelers for the benefit of the community HA Maintenance Community MAC Benefits Implementation and use of the CAF, with the performance regime, and Area Strategy review will help close the performance circle The MACs have provided a general improvement in performance, e.g. Improved response to repair 24 hour defects and over a day’s saving across the board on the time taken to repair 7 day defects Quicker response to emergency incidents An improving RIDDOR rate Lower percentage of the lighting stock out Network availability improved

CONTINUOUS IMPROVEMENT CONTINUOUS IMPROVEMENT Working together to achieve Safe roads, Reliable journeys, Informed travellers for the benefit of the community HA Maintenance Community HA Maintenance Community Cultural Assessment Framework Performance Framework RESULTS ENABLERS Direction and Leadership Strategies and Planning Processes Area Performance Indicators Outcome measures: Safety People Journey time reliability CBPP measures Customer satisfaction Partnering Environment Resources CONTINUOUS IMPROVEMENT CONTINUOUS IMPROVEMENT

Lessons Learnt If you don’t change anything, nothing will change HA Maintenance Community Lessons Learnt If you What factors have influenced the improvements, savings & efficiencies? If you don’t change anything, nothing will change Have had to developed an increased and ongoing understanding and knowledge of the MAC contract and its objectives Improved operation and management of the supply chain and a major driver towards achieving Best Value

HA Maintenance Community Lessons Learnt (cont.) If you What factors have influenced the improvements, savings & efficiencies? We have witnessed the scheme development process becoming streamlined across members of the community including; Eliminated waste, e.g. unnecessary supervision and duplication of effort Earlier creation of the delivery team and early client engagement Streamlined scheme delivery process = less handoffs & interfaces Moving towards an ECI philosophy in all areas of work Adapted lessons from other areas of the MAC delivery team Used the flexibility offered by the MAC contract to innovate Moved towards standardised approach to scheme development

HA Maintenance Community Lessons Learnt (cont.) If you What factors have influenced the improvements, savings & efficiencies? We still have value for money issues – more for less but ought we to get more? Do we really understand how the market handles cost? Have the lessons been learnt?

Best Value Forward Look HA Maintenance Community Forward Look Best Value ‘Delivering business objectives at the lowest affordable cost while achieving continuous improvement’ Requires continuous improvement in economy, efficiency, and effectiveness at factors have influenced the improvements, savings & efficiencies?

A Vision of Best Value Service Delivery BEST VALUE Service Delivery Working together to achieve Safe roads, Reliable journeys, Informed travellers for the benefit of the community HA Maintenance Community A Vision of Best Value Physical and contractual issues or drivers of change that contribute to the delivery of BEST VALUE Continuous improvement (PRIDe, Papers) Innovation (Contract development, TRL) Performance specifications and measurement(API, PRIDe,Annexes 10&15) Service Delivery Best practice (BP working groups) EMAC Reliable Journeys HATO Whole life cost measurement (Workshop papers, ACI, PRIDe) Safe Roads Informed Travellers Partnerships / Integrated teams (CAF, Partnering Guidance, Collaboration) MAC BEST VALUE Partners MA Environ-ment Satisfied Customers Market sustainability and resilience (SCM, SC Resilience, MPP Policy) TMC ECI (Effective use of Budget) Payment mechanisms / Incentives(Guidance Notes, Contract development) F’Works DBFO Service Delivery Standards (Performance Standards Development) Flexibility (Contract development) Risk sharing (Contract development)

HA Maintenance Community Are MACs working? YES…. continually improving and being more efficient? Some Areas showing scheme development costs are reducing year on year Scheme delivery risks are reducing and certainty is increasing We are delivering more for less

Are MACs working? but…. Pressures on lump sum costs Affordability HA Maintenance Community Are MACs working? but…. continually improving and being more efficient? Pressures on lump sum costs Affordability We are delivering more for less – but our understanding of what we can achieve has to improve as well