Decision details

To consider the report of the Head of Highways and Parking setting out the out the agreed final terms of the proposed Highways Service Partnership Contract based on an updated business case, evaluation of final tenders and award of Preferred Bidder. The report will outline the benefits and value for money; service, contractual and commercial positions  together with the key risks in entering the long-term partnership and seeking authority to enter into a contract with Balfour Beatty Infrastructure Services.

This report was submitted for consideration as a General Exception under paragraph 15 of the Access to Information Procedure Rules in part 4 of the City Council’s Constitution, notice having been given to the Chair and Vice Chair of Overview and Scrutiny Management Committee and the Public. 

Having complied with the requirements of Paragraph 15 – General Exception of the Access to Information Procedure Rules:

(i)  To enter into a contract for a period of 10 years plus period of flexible extendibility with a company within the Balfour Beatty Group to deliver the Council’s highways services

(ii)  To delegate authority to the Solicitor to the Council, following consultation with the Executive Director of Environment and Executive Director of Resources to finalise and enter into all necessary or ancillary contractual arrangements and documentation with a company within the Balfour Beatty Group, subject to the parameters set out within the report, and specifically in confidential Appendix 1.

(iii)  To authorise the Executive Director of Resources and / or  the Solicitor to the Council to take any further action necessary to give effect to the decisions of the Executive in relation to this matter.

(i)  This report is submitted for consideration as a General Exception under paragraph 15 of the Access to Information Procedure Rules in part 4 of the City Council’s Constitution, notice having been given to the Chair and Vice Chair of Overview and Scrutiny Management Committee and the Public.  The matter requires a decision as it would be impracticable to defer.  This would delay Service Commencement and would impact on the Council’s commercial position. It would have been impracticable to include on the May 2010 published Forward Plan as the evaluation was in progress and the Preferred Bidder was not appointed until the 27^th May 2010.

(ii)  Final Tenders were received from the two remaining bidders in April 2010. A company within the Balfour Beatty Group was appointed as Preferred Bidder on 27^th May 2010

(iii)  The efficiencies generated from the partnership will be re-invested back into the highways service. The Partnership will not provide the level of additional funding required for significantly improving the condition of the highways network (for which it is estimated between £10-15m spend per annum is required) or move the Council away from a ‘managed decline’ strategy. However, it will ensure the Council is maximising the output from its existing budgets and that the decline is significantly slowed.

A Strategic Business Case included an options appraisal which determined, in the absence of significant additional external investment (i.e. PFI), the model that best met the Critical Success Factors for the future of the Highways service was a long-term public/private service partnership. The alternative options considered were: Do-Nothing; Public/Public Partnership; Strategic Partnership; Externalisation; Fully in-house.