Strategic report

The Strategic report was approved by the Board Strategic report on 9 July 2019 and signed on its behalf by:

JIM O'SULLIVAN CHIEF EXECUTIVE

HIGHWAYS ANNUAL REPORT AND ACCOUNTS 2019 ANNUAL REPORT AND ACCOUNTS 2019 8 9 Chairman's statement Strategic report Highways England made good Home Safe and Well initiative. has transformed the customer that the company’s performance We noted progress on the items Planning for Brexit progress in the year to 31 March This internal scheme focuses on experience of other modes of was positive. To achieve all the highlighted last year and identified Over the past year, we have 2019, delivering to plan and with the wellbeing of our people, those and we are doing the targets all the time would indicate two areas for focus in the coming talked to the DfT about the risks strong financial results. We are who work for our contractors, and same for our roads. We have that they are too easy; we accept year: customer service and associated with leaving the not complacent and recognise others impacted by our activities. more to do in 2019-20 and into that there is still more for us broader stakeholder engagement, European Union (EU). We have that much remains to be done the future. to achieve. particularly through better reviewed Government's Brexit in the final year of this five‑year Progress in these areas has collaboration with our commercial notices, considered the potential road period. allowed us to devote more time Delivery Governance customers. impact of EU Exit on our business, to aspects of road safety over and continued our work in on Highways England operates, which we have less direct control. We spent £3.8 billion on the SRN Our Board has evolved over the Looking ahead solutions at the ports. maintains and enhances the I believe that through collaboration in 2018‑19, over £10 million per course of the year. David Hughes, strategic road network (SRN) − with road users and, in the case of day. Of this, £2.6 billion relates who chaired the Audit and Risk Planning for RIS2 In other parts of the country, we some 4,300 miles of motorways business drivers, the organisations to capital investment in our road Committee, left in August 2018, In January 2018, in response have reviewed our plans with and major A‑roads, carrying who employ them, we can play network, and £1 billion on its and Simon Murray, who chaired to Government's Draft Road ports and authorities. 4 million vehicles every day. The an important role in reducing the maintenance and operation. We the Investment Committee, left Investment Strategy (RIS2), we We have tested our contingency SRN plays a critical role in the number of people hurt on the have developed our financial and in March 2019. I thank David submitted our Draft Strategic plans for bad weather and country’s society and economy, country’s roads. I am particularly operational control systems such and Simon warmly for their Business Plan for the second major incidents against likely connecting families and friends proud of our Driving for Better that we have been able to manage contributions and am pleased road period (2020‑2025) for Brexit‑related scenarios of and enabling businesses to trade Business campaign, which has opportunities and risks across our to welcome three new directors: review by the Office of Rail and disruption, considering the needs nationally and across the globe. already signed up over 320,000 investment portfolio, and to deliver Kathryn Cearns joined us in April Road (ORR; our Monitor) and the of people using our roads to drivers and 225,000 company within the funding provided. 2018 and now chairs the Audit and Department for Transport (DfT; get to the ports as well as those Our three imperatives − safety, vehicles. As examples of what Risk Committee; Janette Beinart our Shareholder). going elsewhere. While we cannot customer service and delivery − can be achieved amongst our We have been working closely joined in January 2019 and now avoid all disruption, we are have remained constant since we own contractors through this with Government to meet legal chairs the Investment Committee; Following the 2018 Autumn working to minimise the impact were established in 2015. These scheme, Amey has reported a requirements and improve air and Carolyn Battersby joined Statement, we expect an allocation on our customers. shape our foundation and our 38% reduction in at‑fault accidents, quality for the communities who in February 2019 as the new of £25.3 billion of funding for focus, keeping people moving and WJ Group has reported a live beside our roads. We have an Shareholder‑appointed Director. the next road period and have Finally, I thank every colleague in today, and moving better tomorrow. 20% reduction in incident rates, ongoing programme of research, proposed a programme of Highways England, and everyone and a 59% reduction in traffic are supporting local authorities We are committed to achieving a investments that we believe is in our partner organisations, for Much remains to be done as we offences. Our campaign works to in the introduction of clean air culture of equality, diversity and deliverable, good value for our each and every contribution to the work to complete Government's spread these advances as widely zones and are developing plans to inclusion. These changes to the customers and good for tax payers. progress made this year. first five‑year Road Investment as possible. improve air quality in the quickest Board show our progress regarding Our Draft Strategic Business Plan Strategy (RIS1) and prepare for the ways available to us. These gender, and our Responsibility also outlines how we will drive opportunities and challenges of the measures include installing new Customer service section of this report shows our efficiencies over and above next road period. barriers, encouraging cleaner fuels wider, employee‑led progress those achieved in the current Our business has strong public and improving traffic management. across Highways England. road period. Safety service roots in doing the best for Highways England has been society. We are adding to our DNA After last year’s The DfT is due to publish the final We are focused, company‑wide, set challenging targets. Having COLIN MATTHEWS CHAIRMAN a culture of customer service − a externally‑facilitated evaluation of RIS2 in the autumn, after which on the safety of all those who drive reviewed progress over the year to dedication to meeting the needs of Board performance, our review we will finalise and publish our or work on our roads. I am pleased date (our results are reported on individual road users. We know that in 2018‑19 was internally led. Strategic Business Plan. to report improvements this year, the provision of timely information pages 24-28), the Board believes including the launch of our

HIGHWAYS ENGLAND ANNUAL REPORT AND ACCOUNTS 2019 HIGHWAYS ENGLAND ANNUAL REPORT AND ACCOUNTS 2019 10 11 Chief Executive’s strategic review Strategic report We are now four years into role of education and compliance In 2018, we also started to use ensuring that we hit our in‑year engagement to 52% from 46%, across five areas: environment; delivering Government’s £15 billion measures alongside traditional Twitter to provide customers with targets and keeping us on and employee enablement to cycling, safety and integration; RIS1 for 2015-2021. This is the engineering interventions. We real‑time information across three track to meet our overall RIS1 56% from 52%. air quality; growth and housing; largest investment in our SRN in a have also updated a number of regions. Customer feedback was commitments, as we missed our and innovation. generation, through which we are our Design Manual for Roads positive, and the remaining three 2018‑19 delivery plan commitment As part of our transformation, delivering benefits to our customers and Bridges (DMRB) standards, regions went live in March 2019. of the: we remained focused on This year we published our first and the economy, while minimising to make it easier for designers our Highways England 2020 Cycling and Accessibility Report. our impact on the environment and to understand road safety Delivery „„ M20 junction 10a upgrade in Organisational Plan, making We have made significant progress local communities. As more of our considerations, and to ensure 2018‑19 the changes we need to enable in integrating cycling schemes move into construction, they are embedded within We opened seven schemes in us to deliver current and future and accessibility needs into we remain wholly focused on design decisions. 2018‑19 and this has added Some of our other schemes in investment programmes. The plan scheme design, and are working our three imperatives – safety, around 60 lane miles of work this year, and forming case contains cross‑organisation closely with stakeholders to deliver customer service, and delivery – Customer service capacity to the SRN. These studies within this report, are: the and directorate‑led initiatives in schemes which suit the needs which underpin everything we do. include: A14 Cambridge to Huntingdon (our key areas, such as capability of communities. Our satisfaction score of 88.4% front cover and flagship project for development, culture change Safety this year is slightly below our „„ M5 junctions 5 to 7 upgrades 2018-19); the A303 at Stonehenge; and estate and capital portfolio What next? target. It is improving though we „„ A50 Uttoxeter (Project A) and the M5 Oldbury Viaduct. management. Safety remains our foremost are disappointed and will redouble „„ M6 junctions 16 to 19 smart I am proud of the achievements concern. Since 2012, the number our focus on improving the overall Read more about these on pages We have built a culture of equality, and progress that our people and motorway 32, 34 and 40 of people killed and seriously experience for our customers and diversity and inclusion, including company have made in the last „„ A19/A1058 Coast Road injured (KSI) on the SRN has communities in 2019‑20. through a number of staff networks. year. I know that there is – and junction improvement We achieved £362 million of varied. Headline figures for 2018 Important steps forward have been will always be – more work to do. efficiency this year, against our show an overall reduction in the Our Customer Service Strategic „„ M1 junctions 23a to 24 smart made in two areas: our LGBT+ As a business, we are committed in‑year target of £345 million. number of reported collisions Plan details our commitment to motorway community, and our Armed Forces to continuous improvement, and Efficiency is the economic and casualties, with KSI cases improving the experience of all our „„ M1 junctions 24 to 25 smart and Veterans Group. You can find I look forward to seeing what the measurement of how much we slightly increasing compared to customers, taking us into 2020 and motorway out more on pages 88-89. future holds. the same period in 2017, although beyond. We want our customers have saved by ensuring optimal to know that we care about their use of all our resources, such as Social impact the number of fatal casualties has and our missed commitment from We will complete delivery against journeys, and for our people on time, money, labour, and materials. reduced by around 10%. last year, the: RIS1 in the coming year. Having and off road to understand their We are now reporting a cumulative We have introduced a submitted our Draft Strategic Our Chairman talks about one contribution to customer service. position of £848 million within social impact section to our „„ M60 junction 8 to M62 junction Business Plan in January 2019, road user safety campaign that we the current road period, against annual report for the first time this 20 we are preparing for the next road are particularly proud of: Driving Following on from trials in 2017‑18, our target of £722 million by year, to introduce some of the period and expect our plans to be for Better Business. Another where we safely increased the Read more about the March 2019, and have met our work we do across our business signed off later this year. successful safety campaign – for some roadworks smart motorways scheme in our Year 4 efficiency targets across to promote positive environmental, our most impactful to date – was to 60mph, this year a 60mph North West roads programme the business. social and economic outcomes for Don’t be a Space Invader; you can limit has been used during the section on page 37 everyone, and to ensure that we read more about this on page 74. commissioning stages of our People operate sustainably, improving the We also began work on one smart motorways schemes. This quality of life for current and future scheme ahead of schedule and We launched our Guide to Road is to address one highly sensitive We are pleased with the generations. this is now due to open for traffic Safety Route Treatments in May issue for our customers: how much year‑on‑year rise in the satisfaction late 2019, the: 2018, providing the latest guidance time vehicles spend in roadworks levels of our people, with our We are investing £675 million JIM O'SULLIVAN CHIEF EXECUTIVE on following the safe systems (usually 50mph on motorways) and annual survey identifying that through our RIS1 ring‑fenced „„ A1 North of Ellingham approach and highlighting the the associated delays. we have increased employee funding, with Designated Funds

HIGHWAYS ENGLAND ANNUAL REPORT AND ACCOUNTS 2019 HIGHWAYS ENGLAND ANNUAL REPORT AND ACCOUNTS 2019 12 13 STRATEGIC REPORT: OUR BUSINESS MODEL STRATEGIC REPORT: OUR BUSINESS MODEL

Highways England operates, maintains and enhances places creates memories, connecting workers with Our business model: England’s motorways and major A-roads. We exist jobs creates opportunities and connecting businesses to connect the country. We believe that connecting helps our nation thrive. driving our value people builds communities, connecting families with

Our imperatives Safety Customer service Delivery Strategic report and values: Our values how we work 1. This is our first imperative. 2. We are committed to 3. We are delivering the biggest upgrade to Our three This means safety for all making our customers’ the SRN in a generation. Our approach describe how we imperatives set who use or cross our roads journeys as safe, reliable will always be to work in an efficient and do it, how we treat (motorists, pedestrians, and smooth as possible. effective way that provides value for out what we do as people, and how cyclists and equestrians), money and minimises disruption. We an organisation for our people, and for the aim to positively impact the economy we do business communities alongside them. and leave a positive lasting legacy on communities and the environment.

Our mission to connect Our value: creating public benefit the country: what we do Over Our major schemes £1 = £2 INVESTED BENEFIT

Our KPIs set targets for – and then measure – how well we perform our eight core business objectives for public benefit: 1. Make the network safer, reducing numbers of killed or seriously injured 2. Improve road user satisfaction 3. Ensure network availability 4. Clear motorway incidents 5. Reduce noise 6. Enhance the environment 7. Achieve efficiency, saving on capital expenditure 8. Keep the network in good condition

Read more about our KPIs on pages 24-28

Our values Our resources Technological, and relationships: Financial Collaborative Our physical and what we rely resources relationships people natural resources upon Funding from Government Key industry partnerships, Our diverse workforce to manage our Material, non‑financial resources to run our business stakeholders and our supply risk and deliver our strategy, performing to deliver construction work and chain to support our delivery in accordance with our values customer service improvements

HIGHWAYS ENGLAND ANNUAL REPORT AND ACCOUNTS 2019 HIGHWAYS ENGLAND ANNUAL REPORT AND ACCOUNTS 2019 14 15 Our marketplace Strategic report We work within a changing environment, and there are Market conditions within the construction increasing volumes of traffic, a growing population many external factors that may impact how we operate, and infrastructure industries and an increased risk of extreme weather events. maintain and enhance the SRN, as well as how we run In a new study announced by the Chancellor in the our business. We identify these factors as: the national Policy Autumn Statement 2018, the National Infrastructure economic and political climates; issues of social We look to align with, and support, relevant Commission is set to examine the resilience of the concern; the market conditions within our industry; Government policy – including Government's UK’s infrastructure. It will publish its final report and and global technological developments. Industrial Strategy, which aims to increase productivity recommendations in 2020, and we will respond and drive growth across the country. Within accordingly to ensure that our roads, operations and Our eco‑political landscape transport, we work closely with the DfT and other risk management processes can adapt to meet with partners on emerging issues, such as the resilience Budget national demand. of the transport network against the backdrop of In the Chancellor’s Autumn Statement 2018, Government announced that funding for the SRN from 2020 to 2025 would be through the National Supply chain We need to remain aware of the possibilities of supply Roads Fund, which is due to reserve £25.3 billion of Issues of social concern chain shortages, which could arise from a number its expected £28.8 billion revenue for investment in Companies are now expected to behave with greater Our supply chain needs are influenced not only by of issues affecting our market, such as capacity the SRN from Vehicle Excise Duty within England. integrity, fairness and transparency, and to actively planning for the second road period and beyond, constraints within the construction industry, in terms engage with, and contribute to, society. Highways but also by wider considerations around the current of access to local labour, and the risk of contractors Such funding will create a materially stronger link England is no exception. Our strategic progress must state of, and future trends in, the construction and and supply chain organisations collapsing due to the between our customers and our income, potentially be sustainable for our Shareholder, employees and infrastructure industries. industry’s low margins. marking a shift in public expectation. Road users customers, as well as the communities we serve, the who feel that they are directly paying for a service will We will need, for example, to further develop the country more broadly, and the natural environment. We carefully managed the aftermath of the failure of have increased expectations around performance, supply chain so that systems and communications Carillion in early 2018, and we must ensure our supply day‑to‑day visibility on the roads and levels of We welcome this challenge and, this year, we have become more integrated. This will involve a mix of chain approach enables us to securely meet our future customer service. introduced a dedicated Responsibility section to established technology firms, start-ups and small and needs. Specific improvements are wide‑ranging, our annual report to show how we are consistently medium-sized enterprises (SMEs). with examples including increasing awareness of improving how we do business. Brexit Commercial models are also becoming more the proportion of business awarded to individual Early in 2018, as part of Brexit contingency planning, suppliers, expanding the existing supply chain, Going greener for our environment collaborative and integrated, with emerging the DfT and ministers asked us to consider a number models being promoted through Government and strengthening supplier financial viability testing and of possible options to assist with planning for Government has committed to achieving reductions in cross‑industry initiatives. Several examples of where due diligence, and introducing our Routes to Market potential traffic congestion, focused on port the UK’s greenhouse gas emissions and improvements these models have been used are listed below. and Asset Delivery approaches. and Eurotunnel. This brought forward the need for in air quality. We are required to contribute towards the to go ahead as a priority. Greening Government Commitments set for the DfT, currently targeted with a 43% reduction in emissions by IPA – Programme to transform infrastructure Project 13 – An industry-led movement performance, including coordination of collaborative to improve the way high performance Read more about Operation Brock on page 55 2019-20. We have committed to ongoing improvement Infrastructure relationship initiatives infrastructure is delivered based on an and Projects in environmental outcomes. We work with the DfT, the Authority enterprise approach Brexit could impact many industries and, at this Department for Environment, Food and Rural Affairs, stage, it is difficult to conclude the exact impact it the Office for Low Emission Vehicles, and others to help Transport Infrastructure Efficiency Strategy – Anglian Water @OneAlliance – Integrated The DfT-led transport sector initiative, including alliance involving a shared programme pool will have on Highways England. We have analysed improve air quality, lower carbon emissions and reduce Department promotion of collaborative relationships and gain share mechanisms potential impacts on our supply chain resources, our impact on the natural environment. for Transport labour market and IT systems. We believe we are reasonably positioned to deal with any short‑term Read more about our people on page 84, our impacts. Over the longer term, material costs and lack customers on page 76, and our social impact on Read more about Routes to Market on page 49, and our new approach to Asset Delivery on page 50 of skilled labour may increase with a knock‑on effect page 90 on contract value.

HIGHWAYS ENGLAND ANNUAL REPORT AND ACCOUNTS 2019 HIGHWAYS ENGLAND ANNUAL REPORT AND ACCOUNTS 2019 16 17 STRATEGIC REPORT: OUR MARKETPLACE STRATEGIC REPORT: OUR MARKETPLACE

Accelerating technology Trends in the infrastructure sector Top trends in construction technology across the sector In 2018‑19, there were significant breakthroughs Technology is changing the way infrastructure is in construction innovation across the sector, designed, delivered and operated. Schemes will particularly around digital design, off-site and increasingly be designed digitally using 3D Building modular construction and smarter materials. We have Information Modelling (BIM). We expect to become summarised the top construction technology trends on progressively less reliant on traditional design the following page. services through the second road period and beyond, with corresponding improvements in safety and Clearly there is a significant opportunity across productivity. the transportation industry as a whole to enable innovation. Smart construction is rapidly emerging, Increased real‑time data will provide opportunities to Strategic report bringing clear potential benefits to designers, transform the management of the SRN, and to meet contractors and asset owners. the growing demand for data to support improved Drones journey planning, goods distribution and the transition Robotics Trends in the automotive sector to CAVs, maximising existing capacity and helping us To support the increasing number of electric vehicles to prioritise future projects. and connected and autonomous vehicles (CAVs) on our roads, we will need to manage a change in road infrastructure over the coming years. Electric vehicles, for example, will require a network of charging points. We are both planning for, and already responding to, Big data these automotive developments. Mobile and cloud software Read about our Digital Roads vision on page 46 and our Innovation schemes on pages 72-74

Wearable Technology Green design

Augmented reality

Machine Off-site learning construction Building information modelling (BIM)

Read about our risks and risk management on pages 56-63

HIGHWAYS ENGLAND ANNUAL REPORT AND ACCOUNTS 2019 HIGHWAYS ENGLAND ANNUAL REPORT AND ACCOUNTS 2019 18 19 Our financial review Strategic report We have achieved our financial targets for 2018-19. We have held underlying expenditure flat, even as our Financial performance The remainder of our capital funding was spent mainly We met our Delivery Plan commitments and remained capital portfolio has grown, creating £362 million of In 2018‑19, we spent £3.8 billion to operate, maintain on IT and estates projects. within our £3.8 billion funding. As planned, our capital efficiency savings over the past year. and enhance the SRN, which equates to around We rely on effective portfolio management to remain spend has increased as we progress through the £10 million every day. current road period, and as more projects enter We are entering the final year of the road period, clear within our overall capital funding for each road period, on our financial risks and opportunities, and with an construction phase. We invested £0.4 billion more this We prioritise our work programme to maximise the and to understand and manage the rate of delivery year, and capital spending is 37% greater than three affordable work programme linked to full delivery of year by year. Part of the way we do this is by knowing RIS1 commitments. benefits within our funding constraints. Our robust years ago. financial management framework means we manage the project levers we can pull to deliver against our opportunities and risks across the capital investment targets and stay within our funding. portfolio and remain within the funding provided. Our key financial successes in 2018‑19 include:: We have long‑term funding agreements, and our During the year, we agreed with the DfT that we would annual budgets reflect how much investment is bring forward £60 million of funding from the final year expected in each year. We have a flex‑funding of the current road period to better match the delivery agreement in place with HM Treasury, which allows profile of our capital plan. This meant we did not us to bring forward up to 10% of our funding between need to scale back our investment, which would have Delivering the planned capital investment programme years. This is an important mechanism to keep costs created unnecessary delays. within our funding £3.8bn and funding aligned, ensure our schemes start Capital funding promptly and open for traffic on time. We nevertheless to operate, maintain aim to remain within the original profile of spending and enhance the SRN Our capital funding from Government was £2.6 billion over the five‑year road period. Creating efficiencies to keep within flat operational in 2018‑19 funding levels from the total £3.8 billion in 2018‑19, compared to £2.2 billion the year before. Our capital programme Operational expenditure is split mainly between work to enhance and renew our network. Enhancement projects took the majority Operational expenditure Achieving year‑end results (outturn) within 1% of of our capital funding this year, £1.7 billion, and this supplementary estimates is set to rise again next year. This is because many of Operational expenditure our enhancement schemes in the planning phase at (resource departmental Funding Outturn Variance This equates to the start of the current road period have now entered expenditure limit £m £m £m the construction phase. excluding depreciation) Achieving cash outturn for the year within 1% of target £10m 1,096 1,101 (5) a day Capital funding Our operational budget for 2018‑19 was £1.1 billion. Total capital investment This is similar to the year before, but with small Funding Outturn Variance Delivering efficiency savings ahead of RIS1 trajectory (capital departmental increases to cover new work on managing the Severn £m £m £m expenditure limit) and river crossings. 2,589 2,650 (61) We focus the majority of our operational spend on the Protecting and increasing the value of the SRN through maintenance of our network and on service payments We invested our maintenance work and enhancement programme Scheduled renewals work accounted for £0.7 billion of for schemes that were privately financed in the past our capital funding, which we invested in maintaining (PFI schemes). As our underlying funding remains flat, £674m our structures and road resurfacing. This work is we have to find efficiencies to absorb the impact of on the renewal of essential to ensuring that our network operates Refinancing the M25 PFI contract, leading to the SRN inflation and other cost pressures. undiscounted savings of £149 million across its lifetime safely, as well as reducing the need for more costly interventions later.

HIGHWAYS ENGLAND ANNUAL REPORT AND ACCOUNTS 2019 HIGHWAYS ENGLAND ANNUAL REPORT AND ACCOUNTS 2019 20 21 STRATEGIC REPORT: OUR FINANCIAL REVIEW STRATEGIC REPORT: OUR FINANCIAL REVIEW

New cost pressures in 2018‑19 included: Efficiency Supporting our supply chain Operational We have a target of £1.2 billion of efficiency savings Cashflow is important for businesses of all sizes, „ „ an £11 million cost reduction challenge set by budget for over the current five‑year road period. The funding for and we make a real difference to the financial health the DfT our capital plan is provided on a post‑efficient basis, of our supply chain by paying quickly for work that „„ the extra cost of running smart motorways 2018‑19 meaning we have to make these efficiency savings to has been done. We want contractors to be confident (£2 million), which need more traffic officers, deliver our commitments. about working with us, and we are signed up to the and use more electricity through gantry signage Prompt Payment Charter. We paid 90% of supplier „„ higher pay awards for front‑line operations staff The rate at which we need to find and deliver invoices within five days of receiving a valid invoice (£2 million) (£m) efficiency savings increases year-on-year as more and 99% were paid within 30 days or in line with their Capital improvement 1,713 projects reach design maturity and enter into contract terms. We found matching savings which enabled us to Asset renewal 674 construction. Our target by the end of 2018‑19 was Strategic report deliver as planned and remain within our funding. Roads PFI 384 to achieve £722 million of savings, with the final 40% We support Government's fair payment charter, Our transformational change programmes generated Operational maintenance 286 to be achieved in the final year of the road period. and our project bank accounts make a big many of the savings opportunities we needed. We Other capital investment 263 We have exceeded this target, achieving £848 million difference to the cashflow of sub‑contractors. also worked with Connect Plus on refinancing the Operation of the network 192 of efficiencies. These accounts mean all parts of the supply chain M25 PFI contract, which reduced costs by £12 million Corporate services 172 receive payment for their delivery at the same this year, and generated long‑term savings for Protocols 67 We are not funded for inflation on operational time, and sub‑contractors do not have to wait for future years. expenditure, which means we need to find £20 million main contractors to cascade payment, which can Where we spent our money in 2018‑19 of new savings and efficiencies each year to offset sometimes take weeks. During the year, we paid How we spent our money in 2018‑19 (£3.8 billion) inflationary pressures. We have examined all our £1,422 million into project bank accounts, of which (£3.8 billion) major areas of spending and found more efficient nearly a third (£419 million) went to SMEs. Because Our enhancement expenditure benefits every region ways of delivering at a lower cost. of the cashflow benefits, 80% of our sub‑contractors We spent over 71% (68% 2017‑18) of our funding and is concentrated in areas where our biggest chose to be paid this way. on renewing and enhancing the SRN, with a schemes are under construction. Our expenditure The value of our network further 23% (25% 2017‑18) spent on operations, in the Midlands included significant investment on The SRN consists of land, roads, structures (such as Government has issued a new prompt payment including service payments on PFI contracts. The the M6 (junctions 2 to 4 and 13 to 15), together with policy that requires all Government contracts of more remaining 6% (7% 2017‑18) relates to other capital £190 million of renewals. Expenditure in the East bridges and tunnels) and communication technology. These come together to form an integrated network. than £5 million to include supplier prompt payment and corporate services expenditure. reflects the £447 million spend on the A14 Cambridge to sub-contractors. We have built requirements into to Huntingdon scheme and the investment in Valuation of our network is done using standard costs and then adjusted for wear and tear. As we build new our tendering processes to ensure that this is in place Expenditure the South East is a combination of several large when it comes into force in September 2019. schemes, including M4 junctions 3 to 12 and Lower roads or enhance existing assets they are valued using the latest standard cost, which is the same as 2018‑19 2017‑18 Thames Crossing, and £135 million of renewals. We Protocols £m £m spent nearly £640 million in the North of England, the cost to build. In addition to our core activities, we manage a CAPITAL: almost 25% of our regional expenditure. SRN valuation number of other functions for the DfT. These activities, Asset renewal 674 776 Where we spent known as protocols, cost us £67 million in 2018‑19 and are funded separately by the DfT. These range Capital improvement 1,713 1,360 our money Structures £30bn from managing the historical railways estate, to Other capital investment 263 183 operating the Dartford‑Thurrock Crossing charging Total capital 2,650 2,319 2018-19 Roads scheme and managing the Severn River Crossing. (£3.8 billion) North East £74bn OPERATIONAL EXPENDITURE: 2017-18 North West £304m Roads PFI 384 421 Land Forecasting cash requirements (£3.4 billion) £291m £13bn £335m We are measured on our ability to accurately forecast Operational maintenance 286 270 £374m our cash requirements, and Government holds us to Operation of the network 192 169 Technology £2bn account for our performance. The Government target National Corporate services 172 163 is for cash variances to not exceed 5%. We have £1,109m Midlands Protocols 67 58 £1,007m Our network was valued at £118.6 billion at the end outperformed this with a variance of less than 1%. including PFI service £626m of the financial year, which is an increase of 4.4%. Total resource 1,101 1,081 payments, national £559m projects and support costs East This net increase is made up of £1.2 billion of capital All quoted capital and operational expenditure figures can be reconciled to the financial statements, via Annex 1 (iv) Segmental reporting on page 176 £591m investment and £5.1 billion of valuation adjustments, £566m then reduced by £1.3 billion for depreciation, As the number of schemes in construction increases, impairment and disposals. so does the rate of our capital spending. This year we South West South East also spent more on our maturing Designated Funds £158m £627m programme, using ring-fenced funding. £129m £474m

HIGHWAYS ENGLAND ANNUAL REPORT AND ACCOUNTS 2019 HIGHWAYS ENGLAND ANNUAL REPORT AND ACCOUNTS 2019 22 23 Our strategic performance: KPIs Strategic report This section provides a snapshot of our performance 2. Improving user satisfaction 3. Supporting the smooth flow of traffic over the last four years, since the beginning of RIS1. Safety KPI notes Our eight strategic key performance indicators (KPIs), Read more about user satisfaction on page 77 3. Supporting the smooth flow of measured across 10 RIS1 targets set by the DfT in 1. These charts are indicative only. This year we are only able to report unvalidated Q1-2 data. These charts therefore display comparable Q1-2 data from the last three traffic 2015, provide a framework against which we can years for positioning the trends in our performance. monitor our progress. Our results for 2018‑19 show that 2. The publication of the Stats19 validated annual statistics will be released at the end of July 2019. A provisional understanding of safety performance can be derived from 2. Improving user satisfaction our performance has increased and we have met the unvalidated Q1-2 data, published in November 2018. majority of our commitments, with further work needed 3. The Road Safety Overview Performance Report was published in early February 2019. This provides a range of facts and figures, giving more contextual information in some areas. on performance. 90% We must make sure there 1. Making the network safer 98.29% 98.26% 98.41% 98.40% is 97% We monitor our road safety performance through the 88.41% 88.73% 89.11% 89.32% We must achieve a score Read more about safety on pages 68-75 figures provided in theReported Road Casualties of 97% Great Britain Annual Report, published by the DfT. 62 lane availability in any one 90% rolling year to support the 2018-19 2017-18 2016-17 2015-16 2018-19 2017-18 2016-17 2015-16 1. Making the network safer Since 2012, the number of killed and seriously injured road user satisfaction smooth flow of traffic (KSI) on the SRN has fluctuated following many years by March 2017 and then of falling numbers. This trend has also been reflected maintain or improve that in the rest of the road network in England. Headline standard

+ 15.2% figures for 2018, based on the released unvalidated dataset for the first six months of 2018, indicate an While our satisfaction score of 88.41% is slightly below We must achieve a overall reduction in the number of reported collisions +2.0% our target, we have worked across our business and 88.01% 87.90% 85.93% 85.96% We must clear at least and casualties, with KSI cases slightly increasing supply chain to improve the overall experience of our 2018 2017 2016 2015 85% 40% compared to the same period in 2017. customers and communities. Following improvements reduction in the number of to our signs, messaging and information, we have, 85% people killed and seriously of incidents on the -1.6% Further analysis has been undertaken on fatal for example, seen a continual rise in satisfaction 2018-19 2017-18 2016-17 2015-16 injured on our network by motorways within the hour casualties for 2018, based on our dataset. This around on‑road and digital information, with our the end of 2020 -10.5% indicates that the number of incidents has reduced March performance at 92.5%, our highest score by around 10% compared to 2017. since 2013‑14. 3a. Network availability Changes in recording practices over recent years We are working to improve customer experience by Q1-2 (January-June) KSI casualties by year have affected the reporting conduct of KSI. The designing roadworks that cause less disruption to Read more about network availability on page 52 change has meant that some injuries previously road users, for example increasing the speed limit 1000 classified as slight are now classified as serious. through roadworks when it is safe, and phasing Over the course of 2018-19, 98.29% of the network 800 roadworks to manage the number on any single was kept open to traffic. We have increased the stretch of road at the same time. Consequently, this volume and proportion of roadworks carried out at 600 year has seen our highest roadworks satisfaction night, when there are lower traffic volumes, helping to 400 score since 2014‑15. reduce the impact on our customers.

No. of casualties 200 Moving into 2019‑20, we will work towards our

817 941 842 859 target using evidence and insight to understand our 0 2015 2016 2017 2018 customers' needs and to act upon these.

January-June casualty data

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3b. Incident clearance 5. Delivering better environmental In April 2017, we started the noise insulation 6. Crossings outcomes programme to effectively manage environmental and Read more about incident clearance on page 52 neighbourhood noise. Through this scheme, we install Read more about crossings on page 71 improved glazing and ventilation to homes within 88.01% of incidents on the motorway were cleared 5. Delivering better environmental NIAs where our other mitigation measures are not within one hour. Our performance is 0.11% higher than outcomes practical. In 2018‑19, we extended the noise insulation 6. Crossings last year, achieved against a backdrop of increasing programme to all regions of England, and we have RIS1 4-year traffic volumes and incidents. In total, we responded 448 now improved noise insulation for a cumulative total cumulative total to over 58,680 incidents, a 4.53% increase compared of 762 properties. 72

300 Upgraded: 182

with 2017‑18. This demonstrates the positive impact 54

We must mitigate at 49 New: 90 of our initiatives, such as intelligence‑led patrolling 5b. Biodiversity Strategic report 141 least strategies and targeting of resources on our network. 7 62 We published our Biodiversity Action Plan in We do not have a target 29 28 20 13 for this measure 4. Average delay 2018-19 2017-18 2016-17 2015-16 1,150 2015‑16, and we have since published an annual 2018-19 2017-18 2016-17 2015-16 noise important areas Biodiversity Report in 2016‑17 and 2017‑18. Our next by 2020 report is due to be published this summer. 4. Average delay Government has not set a target for this measure, but Additionally, we have a road period 1 commitment we must report on the number of new and upgraded Plan Plan Plan Plan to slow the rate of biodiversity loss. We have worked published published published published crossings year‑on‑year, as part of our commitment to with Natural England to develop a new metric for and we and we and we helping cyclists, walkers and other vulnerable users of report report report biodiversity, for use in road period 2. This metric is We must publish a the network. annually annually annually currently being run in shadow form, and we will be in Biodiversity Action Plan There is no Government a position to provide evidence to support performance 9.37 seconds 9.19 seconds 8.95 seconds 8.93 seconds by 30 June 2015 Last year we reported 39 new and 172 upgraded set target for this commentary against our road period 1 commitment at measure 2018-19 2017-18 2016-17 2015-16 and report annually on crossings for 2015‑16. Due to methodology changes how we have delivered the end of this year. for validation of vulnerable users (now counting 2018-19 2017-18 2016-17 2015-16 against the plan physical crossings as single units rather than types In 2018‑19, we developed and validated a further of crossing per asset), the data for equestrian, 10 management plans for Sites of Special Scientific pedestrian and cycle crossings for the period 2015‑16 Interest across England. This brings our cumulative Government does not set a target for this measure but was reviewed this year, with figures quoted here now 5a. Noise total to 35. we must report the average time delay (time lost per validated. vehicle mile) year-on-year, as part of our commitment Read more about noise on page 92 to supporting economic growth. Our Environment Designated Fund provides the principal source of funding for our projects to improve 7. Achieving efficiency Mitigation method NIAs biodiversity across our network. We now have an mitigated extensive programme of biodiversity investment Read more about efficiency on page 23 in 2018-19 across the country, including widespread creation Noise insulation of species‑rich grasslands, in support of the 232 Government’s Insect Pollinator Strategy. In 2018‑19, 7. Achieving real efficiency we have further developed our delivery partnerships Resurfacing 58 with other stakeholder organisations, including the

Wildlife Trusts. 848 Barriers 10 486

300 We will make capital Total expenditure savings

300 169 55 of at least To improve the quality of life for our neighbours living alongside the SRN, we have mitigated 2018-19 2017-18 2016-17 2015-16 £1.212bn 300 Noise Important Areas (NIAs) during 2018‑19 by 2019‑20 through a variety of mitigation methods. Our cumulative total for the current road period is now 951, leaving 199 to complete our five‑year target of 1,150. Our approach to efficiency is set out in ourEfficiency and Inflation Monitoring Manual and our Capital Efficiency Delivery Plan. We are driving efficiencies across our business and we have established a robust

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accountability and governance framework to provide strong leadership and oversight.

Effective engagement and collaboration with our stakeholders, including our supply chain, is integral to achieving greater efficiencies.

We have identified a total of £848 million of efficiency savings against our cumulative target of £722 million for 2018‑19. A key driver has been the implementation

of Lean initiatives to increase productivity when Strategic report carrying out pavement (road) renewals.

8. Keeping our network in good condition

Read more about maintaining our network on page 51

8. Keeping the network in good condition

95%

95.5% 95.2% 94.3% 92.3% We must ensure that 95% of pavement (the road 2018-19 2017-18 2016-17 2015-16 surface) requires no further investigation for possible maintenance

In 2018‑19, we ensured that 95.5% of our network was kept in good condition, meaning that no further investigation is required for possible maintenance. This is 0.5% above target and is an improvement from last year (2017‑18), when we achieved 95.2%. In 2018‑19, we developed and used specialist data analytical tools to predict the likely KPI outcome at the end of the year, helping us shape our planning and in‑year changes. We are building on this approach to help us develop more effective and targeted renewal programmes in the future, particularly in planning for the next road period.

HIGHWAYS ENGLAND ANNUAL REPORT AND ACCOUNTS 2019 28 29 Our delivery

22 Schemes opened Strategic report We are now four years into delivering Government’s Norfolk County Council's Third River Crossing scheme 1 0 2 20 A1 for traffic and £15 billion RIS1, the largest investment in our over the River Yare in Great Yarmouth. 2 1 2 2 network in a generation. Through our transformational in construction A0 U P A schemes and programme of road improvements, To date, we have opened 29 schemes in this road 2018-19 A19 1 2 2 7 we are delivering real benefits to our customers and period and have started 44 schemes against a target A69 A1 Motorways the economy, while minimising our impact on the of 36. There are currently 15 schemes in construction Carlisle A1 environment and communities. on our network. M6 Trunk roads 1 19 9A19 A1(M) A66 Middlesbrough A19A10 C R A595 Opened for traffic 1. Transformational schemes A174 A66 A00 E Schemes in A19 A590 construction Investing in major schemes 9 A19 T A1 We have opened In construction there Scheme in We are committed to investing over £7 billion of our 10 A1 C A64 are currently construction capital budget into major schemes, many of which will 11 9 A A585 M6 Yo r k ahead of original continue into the next road period starting in 2020. commitment M1 12 20 10 M55 M65 M606 M621 We are also committed to delivering efficiency savings Preston M62 A63 29 15 A56 1 2 10 12 M61 of £1.2 billion during this road period. 1 M62 A1 A180 M58 13 Manchester M1 Grimsby schemes schemes 1 1 1 19 M18 M180 M60 A616 A628 A1(M) IN RIS1 2018-19 M57 1 2 M62 2018-19 Planned Actual M53 A556 M56 A46 commitment number of number of Lincoln 1 1 1 A1 Development of the remaining major schemes is A55 schemes schemes 6 M6 A500 M117 well advanced, with less than 5% left to progress to 1 A2 N Stoke-on-Trent A38 8 4 A52 Started construction 6 4 detailed design stage. 1 12 A50 A453 A483 A5 16 3A38 A42 A46 Norwich 19 20 M54 A47 A47 We have invested in our Designated Funds across A458 2 A5 M42 Opened for traffic 7 7 A1 A12 environment, cycling, safety and integration, air 20 2 10 M6 M69 Peterborough M6 15 A5 A1(M) A11 quality, growth and housing, and innovation. These A14 Moved from options 21 2 11 M5 M42 4 4 10 enable us to provide environmental, social and M1 A14 to development phase M45 A45 A14 22 A1 N E A49 5 A11 14 A428 economic benefits to the people, communities and Worcester A5 Cambridge A46 A421 Ipswich A1 M40 A14 businesses who live and work alongside our SRN. A12 During 2018-19 we opened seven schemes, adding M50 A43 Milton M11 ( ) Keynes M1 A1 M A120 A40 A120 around 60 lane miles of capacity to the SRN. We A5 A417 A40 Gloucester National Infrastructure Programme started work on four schemes; one was the A1 North M25 A34 M5 M40 A12 of Ellingham, ahead of our original commitment date In 2018, there was an increased level of activity in M48 A419 11 Swindon Southend-on-Sea M4 M4 A404 A13 of 2019-20. major national road schemes dependent on extensive M4 Reading 18 Bristol M32 19 third-party involvement. Many of these schemes M2 A249 M4 A34 As we progress the investment in the SRN we review are transformational in nature – such as the A66 M26 A2 A36 M25 M5 A303 M3 20 M20 our major scheme programme to ensure we meet Trans-Pennine, Manchester North West Quadrant, M23 12 A3 Crawley A2070 A20 A21 the needs of our customers and local stakeholder Oxford to Cambridge Expressway, Heathrow A36 A303 21 A23 A259 development plans. Based on this review, as at Expansion Programme and High-Speed Two (HS2) A31 Yeovil A3(M) A27 A259 31 March 2019, we had agreed with the DfT to – and they are dependent on other infrastructure Exeter M27 A27 Brighton A30 Portsmouth reschedule the start of works on the M6 junctions 21a projects across housing, regeneration, commercial A30 A35 to 26, and M56 junctions 6 to 8 to reduce congestion aviation and rail. around Manchester. The A47 and A12 junction Torquay Plymouth A38 enhancements were also rescheduled, to align with A30

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People We found out through We have completed one of the We have over 140 apprentices and largest and most expensive Strategic case study more than 200 trainees, graduates Facebook that programmes of archaeological and interns working on the project. communities were excavations ever undertaken on a frustrated that lorry road project in England. A14 Cambridge to Huntingdon We have developed four drivers weren’t reading At its peak, 250 archaeologists The £1.5 billion A14 Cambridge to Huntingdon Pre-Employment Programmes, in were excavating a range of sites improvement scheme is our biggest project collaboration with West Anglian diversions signs on over the 21 miles of the scheme. Strategic report under construction and it is more than half way Training Association, assisting over the A14 properly and More than 40 separate excavations, through to completion. The scheme covers a 45 people who were out of work. To were taking shortcuts covering some 350 hectares, have critical east-west route, particularly important for ensure we work closely with local unearthed three Neolithic henges businesses and freight, linking the North West communities, we have over 100 through their villages. (4,000 and 5,000 years old), seven and Midlands with the Suffolk ports. Science, Technology, Engineering As a result we reviewed and Mathematics ambassadors prehistoric burial grounds (most working with a range of schools our diversion signs and from the Bronze Age), 15 Iron Age (800 BC – 43 AD) and Roman The challenge Early in the project, the decision across the A14 corridor. As part of amended them to make the A14 Community Fund, we have (43 – 410 AD) settlements, three One of the country's fastest growth was made to set up an integrated diversions clearer to Anglo-Saxon (410 – 1066 AD) delivery team, with Highways allocated over £320,000 to support areas outside of London, the over 42 local initiatives. all drivers." settlements and one deserted Cambridge sub-region is expected England jointly agreeing aims medieval (1066 – 1539 AD) village. and objectives with our supply The A14 project is the exemplar to see a 23% rise in population, of making this ambition a reality, Local communities Environment along with a 28% increase in housing chain partners. Culturally this was Archaeologists have also unearthed and the freedoms the team has Project leaders decided, with and a 22% growth in jobs by 2031. important, because it fostered a The A14 passes through arable around 8,000 objects, such as been afforded have resulted in Executive support, to adopt an Our challenge for the A14 was to collaborative environment that farmland, and protected and coins, brooches and ironwork, local decision‑making which makes open approach to communicating improve connectivity, increase safety enabled everyone to work together declining fauna have been 575 human burials and cremations, a real difference, both for local with stakeholders on this project, and generate significant economic – and with equal opportunity recorded in the area, including the with over six tonnes of pottery and communities and right across particularly the communities benefits through better access to – to achieve great things. Jim great crested newt, water vole, almost five tonnes of animal bone. the industry. affected by our work. Our A14 homes and jobs. O’Sullivan, our Chief Executive, otter, and various species of bats. commented on how teamwork Facebook and Twitter pages We aim to provide an enhanced The outcome The solution and clear leadership have helped have over 15,000 followers, and habitat for many of these species. bring about huge benefits for our Journeys that has been a great forum The A14 project spans 21 miles flagship project this year, adding: We forecast that journey times will for conversations with our and will deliver over 100 lane miles communities; an example of how Journey times will decrease by of new network, including a 12.5 mile be 20 minutes quicker at peak times and will aim to eliminate over good governance can promote £1.5bn bypass to the south of Huntingdon “The A14 is a fantastic PROJECT 3,000 collisions across 60 years. stronger relationships. 20 mins and a 750 metre viaduct. As part example of where a solid AT PEAK TIMES of the scheme, we will also widen project framework has and improve existing roads and Efficiencies junctions. reaped great rewards. I Over £8.5 million Lean efficiency £8.5m 3,000 say this to project teams savings have been assured so far, LEAN EFFICIENCY COLLISIONS WILL BE In January 2019, we applied for an often but it’s so true: if with a further £11.57 million in the SAVINGS PREVENTED amendment to the Development pipeline for this RIS. Consent Order to reclassify as you are aligned with our 15,000 motorway the new A14 between company imperatives, Examples of our increased FACEBOOK & TWITTER 100 lane £320k FOLLOWERS TO SUPPORT LOCAL Girton and the new Ellington junction, working to our values productivity include Concrete and extend the A1(M)’s motorway Safety Barrier installation (increased miles INITIATIVES and if what you are WILL BE CREATED status south from Alconbury to by 5% per day) and slot drainage Project Director David Bray said: installation (increased by 14%). Brampton. If approved, this would trying to achieve forms ...have found effectively enable us to provide a part of our business We are also considering how the 250 motorway from the M25 all the way to lessons learned from this project “Social media has proved ARCHAEOLOGISTS... Peterborough. Local authorities and plan, then you have can be transferred to the future 8,000 to be a great listening OBJECTS enterprise partnerships are providing the full support of the nearby major scheme at tool for us. £100 million towards this scheme. Executive team.” (the Black Cat junction).

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The Lower Thames Crossing In February to April 2018, we held the statutory Facilitating the introduction of HS2 We have proposed that, between the M1 and the M40, This project is the single biggest roads investment consultation, followed by a supplementary The first phase of HS2 from London to Birmingham a corridor running near to the proposed east-west project since the M25 was completed more than 30 consultation from July to August. These covered the includes 18 locations where the railway crosses railway would potentially provide the greatest years ago. It will be the longest road tunnel in the proposed scheme and additional heritage mitigations the SRN. The High-Speed Rail Act (London – West benefits. According to our analysis, this corridor country, and one of the largest diameter bored tunnels for inclusion into the Development Consent Order, Midlands) 2017, granted permission for the first phase would be able to support existing transport needs, in the world. The route presents the opportunity to which was submitted in October 2018. of HS2 to be developed and delivered. as well as transformational growth, regeneration and transform journeys across the South East and beyond. redevelopment across the wider corridor. It would The scheme will upgrade an important route linking The Act sets out a number of duties for Highways significantly shorten journey times for getting between The Lower Thames Crossing will almost double the M3 in the South East and the M5 in the South England, requiring a close working relationship. the M40 and M1, providing the area with better road capacity across the Thames, east of London. West, improving journey times for millions of people. These are described further in a Memorandum of access to jobs, services, leisure and education. This

The 70mph crossing, and the new connecting road This investment will support economic growth and Understanding and supporting documents. We corridor would also provide a southern bypass to Strategic report network, will provide quicker, safer and more reliable tourism in an area where congestion and slow have established a dedicated team to lead on the , reducing congestion and helping to journeys locally, regionally and nationally. journeys have previously negatively impacted the interfaces between HS2 and the SRN. We will also support the growth of the town. region’s economy. act as a delivery agent to HS2 – in a similar way to It will form a vital part of the UK's transport our current M25 tunnel enabling works and the M6 Throughout 2019 we will look within this area to find infrastructure, and the areas it will serve are home The tunnel near Stonehenge will reconnect the junction 4 design commission. the most likely route that the road could take. We to economic hubs, key UK ports and thriving northern and southern halves of the 6,500 acre World intend for the leading routes to be subject to a full communities. It will help businesses, both large and Heritage Site, which is split by the current road. It will Oxford to Cambridge Expressway public consultation in autumn 2019. small, to grow and bring people and communities also remove the congestion and its noise from the Oxford, Milton Keynes and Cambridge are growing closer to job, education and leisure opportunities. Stonehenge landscape and local communities. fast, located in a region renowned for innovation and where there are plans for a substantial increase in jobs Following the April 2017 Preferred Route Enabling the expansion of Heathrow and housing. The east-west transport connections Announcement, we have further developed Airport between these areas are not good, with issues such our proposals, informed by our comprehensive Government formally designated the as congestion, slow speeds, poor journey time stakeholder and community engagement programme. Airports National Policy Statement in June 2018, reliability and no single route to travel end-to-end. Our changes have included extending the tunnel by confirming that would be the 600 metres and simplifying junctions to help protect preferred location for a new runway. The statement We were asked to explore the case for a fast, the local road network. detailed the position of the runway to the North West, high-quality road link to better connect Oxford, Milton creating a significant interface with the M25 between Keynes and Cambridge. This included filling the 30 In October 2018 we held the most significant junctions 14 to 15. mile gap in the network between the M1 at Milton pre-application consultation ever undertaken for a Keynes and the M40 at Oxford, potentially including UK roads project. Over 10 weeks, we held 60 events Our role is primarily that of statutory consultee: new capacity at Oxford to relieve pressure on the A34. with 15,000 visitors. We had more than 230,000 visits discharging our SRN Licence obligations and to our consultation website and an unprecedented ensuring that the M25 changes are delivered to We have since been working with stakeholders 28,000 people responded to our consultation. We are standard and that the road remains aligned with and partners on the first phase of the project, using working through these responses and taking them our road users' needs. Heathrow Airport has analytical and evidence-based reviews to understand into consideration as we develop our Development recognised the benefit of our guidance and advice which of the proposed corridors should be taken Consent Order application. on a range of topics relating to their proposals and forward for further development. A high-level case the runway/highway interface. These include tunnel for the project was published in November 2016, We are now carrying out a huge programme of ground design and safety, customer experience, transport when Government committed £27 million to its investigation and enabling surveys to inform both modelling, construction phasing and logistics, future further development. In the Autumn Budget 2017, our Development Consent Order application and our proofing and environmental impact. the Chancellor stated an intention to deliver a new supply chain engagement. link in the SRN between Oxford and Cambridge. A close working relationship has been achieved In September 2018, the preferred corridor was Upgrading the A303 at Stonehenge through shared objectives, a Memorandum of announced by the Secretary of State for Transport. In September 2017, the Secretary of State for Understanding, Commercial Heads of Terms, This central corridor will stretch between Abingdon Transport announced the preferred route for technical working groups and Executive-level and Milton Keynes. The boundaries of the corridor, upgrading the A303 at Stonehenge. This scheme, engagement. A series of visits to airports outside the and the road, will pass either to the south-east or expected to cost around £1.7 billion, includes UK is underway to understand the safety, operational west of Oxford. the construction of a tunnel past Stonehenge, a and maintenance aspects of runways and taxiways free-flowing, dual carriageway and a much-needed over major highway infrastructure. bypass north of Winterbourne Stoke.

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North West 2. Our roads programme North West No. Name Here we summarise, region by region across our Schemes now completed Schemes in construction network, the RIS1 major road improvements which are 1 A556 Knutsford to Bowdon Schemes in development in construction, in development or completed, and Schemes at options stage Schemes now M60 junction 8 to M62 junction 20: 2 outline some of our key schemes in work or delivered completed smart motorway this year. 3 M6 junctions 16 to 19 and North East Schemes in 4 M62 junctions 10 to 12 construction

Yorkshire No. Name Strategic report M60 junctions 24 to 27 and North East 5 junctions 1 to 4 9 1 A1 Coal House to Metro Centre 6 A585 Windy Harbour – Skippool 2 A1 Leeming-Barton A5036 Princess Way – access to 7 3 M1 junctions 32 to 35a Port of Liverpool Schemes now 4 M1 junctions 39 to 42 8 M56 new junction 11a 14 Schemes in completed 6 5 A160/A180 Immingham development 9 M6 junction 19 improvements 15 7 8 6 M1 junction 45 improvement 10 M6 junctions 21a to 26 1 11 16 A19/A1058 Coast Road junction M56 junctions 6 to 8: smart 7 7 10 11 improvement 4 2 12 motorway Schemes in 8 A19 Testos 11 13 12 Mottram Moor link road 14 5 12 construction 9 A1 North of Ellingham 1 13 A57(T) to A57 link road 8 9 3 Schemes at 10 A63 Castle Street 14 M6 junction 22 upgrade options stage 2 A19 Down Hill Lane junction 11 improvement 1. Information correct as at 31 March 2019. 12 A19 Norton to Wynyard 13 M62 junctions 20 to 25 A1 Morpeth to Ellingham Manchester smart motorway (M60 junction 8 to M62 junction 20) Schemes in 14 17 dualling This is the first smart motorway scheme in the North This motorway is an integral part of the main 6 development 10 15 A1 Scotswood to North Brunton West, making journey times more reliable for the east-west corridor connecting Merseyside and 13 4 5 A1 Birtley to Coal House 180,000 drivers who use the M60 and M62 every day. Greater Manchester with Yorkshire and Humberside. 16 18 widening We started construction in 2014, with M62 junctions We estimate that our project provides an economic M621 junctions 1 to 7 18 to 20 opening in December 2017, M60 junctions benefit of up to £1.5 million per week. 17 3 improvements 8 to 10 opening in March 2018 and the final section, M60 junctions 10 to 18, opening in July 2018. 18 A61 Westwood Roundabout Through this scheme, A19/A1058 Coast Road junction 1. Information correct as at 31 March 2019. we have provided: improvement 2. There are currently no schemes at options stage in this region. 11.5 miles 5.9 miles OF CONTROLLED OF ALL LANE RUNNING Works on this £110 million investment started in MOTORWAY MOTORWAY June 2016 and completed on time in March 2019. The focus of our scheme was on reducing congestion at the A19/A1058 Coast Road junction. We built 12.4 miles 31 miles two new single-span structures to carry the existing CENTRAL OF NEW COMMUNICATIONS A19 roundabout over the lowered A19. We also RESERVATION DUCTWORK constructed a new three-span replacement structure RECONSTRUCTION INFRASTRUCTURE to support the A1058 Coast Road across the junction. New traffic signal control measures improved capacity and safety for all users, alongside enhanced facilities 800 6 for vulnerable users. NEW LIGHTING PONDS enhanced to provide COLUMNS suitable habitats for great crested newts and other flora and fauna

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M6 junctions 16 to 19 Around 120,000 drivers a day are benefitting. Results A key success for the project was the close A50 Uttoxeter (Project A) This year, we completed a £265 million smart from the first week of operation show that traffic coordination and collaboration to deliver shared We manage the A50 trunk road which is a key motorways scheme under budget and ahead of flowed at near 70mph for 22 hours each day – a benefits with a major neighbouring scheme (Roxhill). transport link between the East and . schedule. We upgraded a 19-mile stretch of the M6 huge improvement for one of the busiest stretches of Traffic management was delivered in partnership As part of the A50 Growth Corridor investment, in Cheshire – the most significant change to the in the country. New variable speed limits also to enable both schemes to achieve challenging Government announced proposals to improve the A50 since it opened almost 60 years ago. We introduced help to keep the M6 congestion-free during peak times. programmes simultaneously. The success of these around Uttoxeter to ease congestion, address safety a fourth lane in each direction and over 250 electronic programmes could only be achieved through true concerns, support local businesses and help create signs, 100 traffic sensors and 70 CCTV cameras to The upgrade is the first of four smart motorway collaboration and trust. jobs and opportunities for Staffordshire. tackle congestion and improve journey times. schemes to be completed that will increase the M6’s capacity by a third on 60 miles of the motorway The combined M1 junction An important project in this investment, funded through

between Coventry and Wigan. 23a to 25 scheme has RIS1, is the construction of a double decker junction Strategic report been awarded a Gold on the A50 at its intersection with the A522 to the west National Site Award by the of Uttoxeter. Midlands Considerate Constructors Scheme in addition to being Construction started in June 2016, with the new Midlands No. Name Highly Commended in the 2017 Highways England junction opening to traffic in December 2018. Schemes now completed Supplier Recognition Awards for their outstanding Schemes in construction 1 M1 junctions 28 to 31 Schemes in development contribution within the Customer category. The project: 2 A453 widening Schemes at options stage 1 M5 junctions 5, 6 and 7 upgrades „„ improves traffic flows on the A50(T) and local 3 A14 bypass widening We started construction of the M5 junction 6 in April network, easing congestion 4 M1 junction 19 improvement 17 2018 and it opened for traffic in March 2019. Through „„ provides safe access for vehicles and pedestrians 5 A45/A46 Tollbar End 16 19 this project we have increased capacity by widening to and from the A50(T) to the A522 2 6 M6 junctions 10a to 13 15 11 9 all approach roads and the circulatory carriageway. „„ enhances cyclist and pedestrian routes Schemes now 10 We have improved journey times to Worcester by 7 M5 junctions 4a to 6 „„ opens up development land for housing and completed 6 enhancing traffic signals, implemented new signage business, facilitating the creation of jobs and 8 A43 Abthorpe junction 18 20 and road markings, and future proofed the drainage to 21 bringing economic benefits to the area 9 M1 junctions 24 to 25 14 help the floodplain capacity. „„ delivers a junction capable of sustaining future 10 M1 junctions 23a to 24 22 23 4 3 development proposals 7 5 25 The junction 6 scheme has strong local support. 11 A50 Uttoxeter (Project A) 24 It enables future housing developments, supports 12 13 M5 junctions 5, 6, and 7 further development at the Worcester Six Technology Through this project we will support the development 12 upgrades 8 26 and Business Park and increases access to Worcester. of 19 hectares of employment land, the creation 13 M1 junctions 13 to 19 Residual work at the junction will continue until of 2,000 jobs and the construction of 700 homes. autumn 2019. Staffordshire County Council is delivering the 14 M6 junctions 2 to 4 improvements on behalf of Highways England. The Schemes in 15 M6 junctions 13 to 15 construction The junctions 5 and 7 schemes (completed in 2015) opening of this scheme is a great example of effective 16 A52 Nottingham junctions M1 junctions 23a to 24 and 24 to 25 also encourage economic development in local partnership working between Highways England communities and have improved the flow of traffic and Staffordshire County Council together with the 17 A500 Etruria widening We introduced a smart motorway between junctions through the area, for example through our new M5 supply chain. 23a and 24, and between junctions 24 and 25. We 18 M54 to M6 junction 7 signals and vehicle detectors on the four started construction in 2017 and opened for traffic in 19 A38 Derby junctions approach roads. We have improved safety, reducing December 2018. This new smart motorway reduces the number of collisions, and we have improved the 20 M6 junction 10 improvement congestion and smooths traffic flow, making journeys facilities around junction 5 for pedestrians. As the A5 Dodwells to Longshoot more reliable for around 130,000 daily users. 21 circulatory carriageway is operated and maintained widening new new Schemes in by Worcestershire County Council, we worked jobs homes The combined scheme also supports access development 22 M42 junction 6 collaboratively with them to deliver this scheme. to Airport and the A50 growth 2,000 700 23 A46 Coventry junction upgrades corridor, including the East Midlands Gateway Rail M40/M42 smart 24 Freight Interchange. It has delivered some major motorways environmental benefits, including the installation of A45/A6 Chowns Mill junction 25 nine metre high vertical noise barriers in sensitive improvement areas and new low-noise surfacing across all Schemes at four lanes. 26 A5 Towcester relief road options stage

1. Information correct as at 31 March 2019.

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Strategic case study

The M5 Oldbury Viaduct We are planning and managing the largest concrete repair project in the UK, working on an ageing viaduct which forms part of one of the country’s Strategic report busiest stretches of motorway.

The challenge moved to a contraflow "Communication with This section of the M5 is one of the busiest sections of motorway in system on the all of our different the country, carrying over 120,000 northbound carriageway. stakeholders has been vehicles between the M5, M6, The first phase of absolutely critical Birmingham and the Black Country each day. We needed to keep work was completed in throughout this project. the road open and free-flowing September 2018, when We know that there has as far as possible during our we switched over to been frustration about renewal works. work on the northbound the length of time taken The Oldbury Viaduct opened carriageway. to complete these works, in 1970, carrying around so we have looked at two miles of the M5 to the west of The first phase of work Birmingham between junctions different ways to explain 1 to 2. The waterproof layer on the took longer than we had what’s happening to viaduct was beyond the end of its anticipated because road users and the local lifespan, allowing water ingress it was only following to the concrete deck to cause communities. extensive damage. extensive testing that we discovered the extent We have worked Solution and lessons of the concrete decay. particularly hard to learned improve our signage The project has required careful Now we know what we across the Oldbury planning to minimise disruption are dealing with, we will to users, as well as to ensure the project – both to explain safety of workers on the project. be able to achieve much what is happening when, greater efficiencies and as well as to advise of “We planned the project we have learned lessons any diversions.” in two main phases. The from how we did things MARTIN PHILLIPS SUSTAINABLE BUSINESS southbound carriageway on the southbound MANAGER works were carried out carriageway.”

first, with traffic being COLIN JACKSON LEAD ENGINEER

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South West London and the South East

South West No. Name London No. Name Schemes now completed Schemes now completed & South Schemes in construction 2 25 Schemes in construction Schemes now A30 Temple to East Schemes in development 1 Schemes in development completed Carblake Schemes at options stage 12 Schemes at options stage 1 M25 junction 30 13 Schemes in M49 Avonmouth 26 4 2 2 M3 junctions 2 to 4a 6 construction junction Schemes 4 1 A21 to A30 Chiverton to 6 now 3 7 5 3 Pembury Carland Cross 2 15 10 14 completed M4 Heathrow slip

A303 Amesbury 4 Strategic report 16 7 road Schemes in to Berwick 4 5 development Down (includes 8 3 5 M20 junction 10a Stonehenge tunnel) 23 17 6 M4 junctions 3 to 12 1 A303 Sparkford to 18 11 5 19 22 7 M20 junctions 3 to 5 Ilchester dualling 20 9 24 Schemes in construction M23 junctions 8 to 3 M5 Bridgwater 21 8 6 10 Schemes at junctions M27 junctions 4 to options stage A358 Taunton to 9 7 11 Southfields M20 junction 10a A2 Bean and 1. Information correct as at 31 March 2019. This scheme consists of a new roundabout over the 10 near the existing junction 10, as well as a new dual carriageway link Ebbsfleet M49 Avonmouth junction one of the largest brownfield sites in western Europe, road to the A2070 serving the nearby hospital and retail park. 11 M3 junctions 9 to 14 bringing an estimated 14,000 jobs to the area. M25 junction 25 Through this project, we are constructing a new 12 junction on the M49, which will boost the local and improvement After starting construction in December 2017, meeting M25 junction 28 regional economy. The project has a Benefit Cost 13 our Delivery Plan target, we have made significant improvement Ratio of 32:1 as it opens up land for development on new new progress with designing and building the scheme. M2 junction 5 homes jobs 14 31,000 28,000 improvements East M25 junctions 10 to Facilitating 31,000 new homes Following fragmented 15 16 East No. Name and 28,000 new jobs, junction development over a number of M25 junction 10/A3 10a will be the biggest boost years, our Delivery Plan 2015-20 16 for the area since the arrival of confirmed works would start Wisley interchange 6 Schemes now 1 A5/M1 junction 11a link 2 8 international rail services more in 2017-18. We modified M3 junctions 10 completed 2 A47 Acle Straight 11 than 20 years ago. Situated previous proposals to allow for Schemes in 17 to 11 improved 10 7 Schemes in development sliproads 9 3 A14 Cambridge to Huntingdon close to the Channel ports and changing interdependencies construction with direct access to the SRN, with developments in Ashford, M3 junctions 12 4 A12 Chelmsford to A120 widening Ashford in Kent is uniquely and achieved planning consent. 18 to 14 improved sliproads 3 A1(M) junctions 6 to 8 smart positioned to leverage national Construction started in February 5 M27 Southampton motorway and international trading 2018. We have missed the 19 13 junctions 6 A47 North Tuddenham to Easton opportunities. Delivery Plan commitment of 2018-19 because the constraints M271/A35 Redbridge A47 Blofield to North Burlingham 20 7 The new junction will ease of the site have led to a longer roundabout upgrade dualling congestion on the M20 and at than anticipated delivery duration. 21 A31 Ringwood 1 Schemes in 5 A47 and A12 junction the existing junction 10, with The project is expected to be development 8 22 A27 Arundel Bypass 4 enhancements safety improvements predicted open for traffic later in 2019. 12 M3 junction 9 9 A47/A11 Thickthorn junction to prevent more than 14 serious 23 improvement 10 A47 Guyhirn junction or fatal injuries over the next We have had significant 60 years. Through this project contributions from the South East A27 Worthing 11 A428 Black Cat to Caxton Gibbet we are improving facilities for Local Enterprise Partnership and 24 and Lancing 12 M11 junction 7a upgrade pedestrians and cyclists, as Ashford Borough Council. Despite improvements Our flagship A14 Cambridge to Huntingdon well as creating 20 hectares the difficulties we have faced, we Schemes 25 A34 Oxford junctions scheme is the only major scheme in construction in 13 A47 Wansford to Sutton of new habitats and reducing have worked closely with these at options A34 technology the East this year. 26 1. Information correct as at 31 March 2019. road noise. partners to deliver the planned stage enhancements 2. There are currently no schemes at options stage in this region. developments. Read more about this scheme on page 32 1. Information correct as at 31 March 2019.

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3. Supporting economic growth „„ We opened a replacement junction between In 2018 we completed the M1 smart motorway In addition to providing a critical infrastructure the A19 and A1058 near Newcastle, allowing upgrade between junctions 24 to 25, which benefitted link for local communities, the works removed Our delivery over the year free-flowing movement for traffic along both the . outstanding transport restrictions to the delivery of the The SRN plays a critical role in contributing to the A19 and A1058. This provides uninterrupted North East Sustainable Urban Extension, We work with key gateway operators and stakeholders success of the UK economy, enabling businesses to access to the northern end of the Tyne Tunnel. which is expected to enable up to 4,000 homes to across the country, facilitating UK trade and exports. come forward over the lifetime of the development. benefit from safe, reliable and efficient movement of „„ We started widening the A500 between Wolanston Our engagement with ports and airports at a national This includes up to 150 homes in the current road people and goods, connectivity to skills, and access and Porthill in Staffordshire, complementing local level is maturing, including supporting the UK Ports period. Collectively, these improvements will help routes to national and global markets. Supporting road measures funded under the Stoke-on-Trent Conference 2018, and we are supporting Government to address the identified infrastructure deficit on economic growth is one of our objectives in our and Staffordshire Growth Deal. preparations for a third runway at Heathrow airport the A45 corridor and contribute towards the wider Strategic Business Plan, and our commitment to our

„„ We held the statutory consultation for the Lower and the construction of HS2. We have also worked Strategic report Growth and Housing Designated Fund is included in housing allocation target outlined in the adopted Thames Crossing. with the Department for International Trade to our Delivery Plan. West Joint Core Strategy. understand the developments they are working on that „„ We made the Preferred Route Announcement for impact the SRN. The Road to Growth improvements to M3 junction 9, which will enable In the current road period, we have committed Our Strategic Economic Growth Plan, The Road to strategic access to South Coast Ports, including £93 million on 28 schemes. These will bring in a Stimulating and supporting Growth, sets out four economic roles for the SRN and Southampton, from the Midlands and support 3. further £231 million of funding from private and public Highways England: freight exports. sustainable development sectors. Seven schemes opened to traffic in 2018-19, with a further three on site. Over the lifetime of the „„ We sought to better understand the needs of The connectivity and capacity of the transport system developments related to our funded schemes, we the freight and logistics sectors. We analysed has a significant effect on local demand for homes Enabling a high-performing SRN to expect over 45,000 homes and 44,000 jobs to be support reliant business sectors’ our landholdings to identify sites that could and employment spaces. 1. developed. We expect to close the fund in March productivity and competitiveness be developed into lorry parks, assisted local 2020 at the end of the current road period. authorities in identifying areas of lorry parking As a statutory planning consultee, we support Providing efficient routes to global need, and provided potential solutions. well-planned developments around the SRN, 2. markets through international In addition to our funding, we seek third party which bring new job opportunities and homes to gateways „„ We developed a comprehensive spatial contributions, through our engagement in the communities across the country. Stimulating and supporting the understanding of where road-reliant businesses planning system, to mitigate impacts on the SRN, are based and their size, and undertook research where necessary. We are involved in several Housing 3. sustainable development of homes Our dedicated Growth and Housing Fund is aimed at to explore how freight could be more appropriately Infrastructure Fund proposals across the country, and employment spaces supporting road improvement schemes which help and accurately accounted for in appraisal. where significant infrastructure investment is required Providing employment, skills and unlock the development of housing and employment to enable large scale housing to be delivered. 4. business opportunities within our „„ We developed programmes of activity with sites across the country. We work in partnership with sector Network Rail that support passenger commuting local authorities and housing developers to deliver We are working with the DfT to support changes to and freight in a more integrated way, including schemes that help generate long-term economic their planning policy on the SRN and the delivery of establishing success criteria for parkway stations benefits for local communities. sustainable development. 1. Enabling a high-performing SRN and exploring how both organisations approach, forecast and engage with freight. Growth and Housing Fund Providing employment, skills and The SRN’s role in supporting business productivity 4. and competitiveness should be seen as part of a 2. The M1 junction 16/A45 Daventry Development business opportunities Providing efficient routes link road scheme formally entered the Growth and wider and integrated transport system. As a direct employer and significant investor, we have Housing Fund programme in July 2016 and was Within an ever-changing global trading environment, major direct and indirect impacts on the economy. approved for up to £3.5 million investment in February In the current road period, we are delivering a our interventions remain mindful of the need to boost 2017. This was supplemented by over £20 million programme of major improvement schemes across UK export capability and provide reliable access to We have developed, and are implementing, a in Local Enterprise Partnership and Local Authority the country, improving safety, capacity and access, international markets. national skills and employment strategy to create contributions, and a further £15 million identified from supporting existing businesses and supply chains to the conditions in which our supply chain can best private sources. be more productive, unlocking land for development, A number of our schemes support access to respond to labour risks and opportunities. This is and reducing congestion and delays. international gateways. We have schemes to improve being implemented through our supply chain, as well The improvements were overseen by road access to Liverpool, Hull, Southampton and Tyne as through regional skills and employment strategies. Northamptonshire County Council and involved the Progress made in 2018-19: ports, as well as Birmingham, Manchester, Gatwick construction of a new 3.5 mile single carriageway link and Heathrow airports. These are currently in the road. This connected a new roundabout on the A45 „„ We opened our smart motorway improvement in planning stages and are due to start delivery by 2020. Greater Manchester, between junctions 8 to 18 between the villages of Dodford and Weedon to a on the M60, and on the M62 between junctions second new roundabout between Upper Heyford and 18 to 20. We made improvements between the at junction 16. junctions 16 to 19 on the M6.

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Our Routes to Market initiative provides a framework New technology carries with it the prospect of a new, S S for our work with our supply chain. In late 2018, we greener vehicle fleet. Already, electric vehicles are a N D G D A announced the appointment of multi-billion-pound growing presence in the vehicle market. The internal I IL S D contracts that will help us deliver RIS1 and RIS2. combustion engine is also becoming more efficient in E D D Moving from contracting on a scheme-by-scheme D response to environmental concerns. I basis to a programme approach will begin a transformation within the infrastructure construction Well-connected road infrastructure with sufficient I sector. With greater certainty of future work, we can capacity is a vital component of economic success. instil confidence in our supply chain to invest in I E recruitment and workforce skills. These arrangements Read more about our Innovation schemes on pages H DD include incentives for buying more efficiently and 72-74 Strategic report buying locally, ensuring that our spend has real local L economic benefit. The current state of our digital capability is defined by initiatives such as Building Information Modelling Recognising our role within the wider transport sector, (BIM), the Rapid Engineering Model (REM) and the EAE we are pleased to be part of the Strategic Transport Business Information Framework (BIF), which we are Apprenticeship Taskforce. We work with SMEs and promoting through our Major Projects directorate and regularly update our published list of upcoming specifically our smart motorways programme. contract opportunities. Our contract terms include E BIM is a digital approach within the construction D a requirement for our supply chain to invest in one E L apprentice for every £5 million of designated spend sector that allows collaboration between project as a minimum. stakeholders in designing, creating and maintaining D any given asset, throughout the project lifecycle, S I using digital tools and software to manage Wider developments A information from concept to delivery. It uses various Alongside the specific four areas, we are E G technologies to generate 3D technical drawings and demonstrating our economic focus in our work D E through: digital representations of structures and spaces, which can be used to support decision-making I

before commencing the build of – or any work on – E A „„ increasing the assessment of economic growth A and the impact of road investment, including physical infrastructure. BIM enables multiple parties D improved internal guidance and national economy (designers, engineers, contractors, operators) to input data into a shared virtual information model, L model, and using our economic evidence base to contributing to safer, leaner ways of working, and support long-term planning greater opportunities for efficiencies. It is considered „ „ being an active partner of Sub-National Transport to be a key agent for economic growth. Bodies „„ supporting the DfT in the development of the REM is a digital workflow, rather than a single piece Major Road Network of software, that enables smart motorway programme schemes to be designed automatically, and much Our Digital Roads vision faster than by traditional means. Different types Diverse data sources of data are digitally analysed – for example, the Business Information We are on the verge of a great change in the way Framework (BIF) we use roads, and in the way that roads affect our landscape and environment of a given area – to economy and quality of life. help identify opportunities and risks within a specific 2 E project, or along an entire asset in the network. Using Bene ts By 2040, experts are predicting a world of connected this data, design layouts of major roadside assemblies vehicles and road users, where semi-autonomous and can be automatically generated, in accordance Safety Enables with smart motorways programme guidance. These S autonomous control of vehicles will be part of life. We Customer know that vehicles will communicate not only with the can be optimised for a variety of different design road infrastructure, but increasingly with each other. and performance criteria, such as our safety and Delivery engineering standards. REM can generate many Better information has the power to unlock more different output types and formats, including 3D virtual 1 R C value from our road network. Already, drivers can get reality ‘drive through’ visualisations. information about their journeys using the internet, smartphone applications and a dedicated customer information line, allowing them to plan ahead.

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4. Supply chain By declaring a pipeline of work, we are encouraging our supply chain to invest in recruitment and in their Working closely together workforce, as well as incentivising a drive for value for The BIF defines a common language and provides a Increased autonomy of construction technologies, This year, we made a number of major contract money and innovation. single environment in which people can access, share cloud-based software and Internet of Things applied awards, including for two of our national infrastructure We have appointed 13 companies to work with and use trusted information. It gathers verified data to asset condition monitoring could all come into play schemes: Lower Thames Crossing and the A303 us to carry out up to £8.7 billion worth of work. from different sources to create powerful visualisations at this stage. Artificial Intelligence, fully automated Amesbury to Berwick Down. of information to support decision-making, foster construction robotics and, of course, fully automated These companies, known as Delivery Integration collaborative problem solving and achieve efficient vehicles are also expected to be key themes. The viability of our supply chain is important to us. Partners, will be part of the new Regional Delivery assurance. This is underpinned with organisational We assess the financial position of each organisation Partnerships, helping to develop, design and and people development to embed these new ways of Our longer term vision for the SRN, Connecting the before we enter into contracts, including an evaluation construct projects for the Regional Investment Strategic report working within our company and supply chain. Over Country, supports our Initial Report. It outlines the nine of the sustainability of the lead bid. During the life Programme from 2019 through to 2024. time the BIF can be used across Highways England to trends, shown below, that are considered in planning of the contract, we assess risks, including financial help maximise benefits throughout the asset lifecycle. to ensure we develop our network to cater for evolving performance and capacity, as part of our project and The new contracts contain incentives for needs and the influence of technology. contract management process. We also regularly results, which include: The future is likely to be defined by the extension of consider the ongoing financial position of key supply the application of BIM, the REM and the BIF to all chain organisations and we are proactive in exploring stages of the end-to-end strategy, asset management any concerns directly with them. Members of our Shorter duration and customer lifecycle in a joined-up manner. senior leadership team are designated contacts and more accurate for key organisations in our supply chain and they management of roadworks have built, and maintained, constructive working relationships. The nine trends that might affect the future of the SRN Buying more efficiently and buying Last year saw the failure of Carillion. We closely locally monitored their position from their first profit warning and had a cross-business team ready to develop Encouraging innovation, for example DEAND and implement contingency plans, should they lighting and signs designed to need be required. Following the announcement of the less maintenance Demographic & On-demand Connectivity company’s collapse, we immediately mobilised our usage shifts consumption team and managed the step-in by Carillion’s joint Reduced road noise and venture partners or the transition of business to increased environmental other framework providers. We strongly encouraged benefits the partners or new providers to make offers of employment to Carillion employees on similar NRASTRUCTURE terms and conditions, and we understand that the vast majority accepted the offers. This included Smart Construction Reducing impact, 21 apprentices, trainees and graduates, all of whom Smart Motorways Alliance assets innovation increasing transferred to the joint venture partners. resilience In autumn of 2018, we launched the procurement Our use of project bank accounts enabled us to process for our Smart Motorway Alliance. provide both security and continuity of payment to the lower tiers of the supplier base. Because of this, This will identify six partners who will join us for 10 years to develop a smarter network, creating ECLES we were able to ensure that no significant disruption to our operations or projects was caused by Carillion extra capacity and relieving congestion so that more ceasing to trade. traffic can use the country’s busiest motorways. Electri cation Connectivity Mobility as a This will generate a step-change in performance & autonomy service Routes to Market and aid the delivery of a large number of schemes, while improving safety during the delivery of Until now, we have contracted work on a scheme- these schemes. by-scheme basis or used a framework called the Collaborative Delivery Framework. The new contracts The infrastructure that goes into creating this capacity developed and announced under the Routes to also forms the foundation for connected vehicles to Market procurement approach have been designed use our motorways in the future. to start a transformation within the infrastructure construction sector.

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We have completed a number of elements from To date we have: Using Lean expertise, we are supporting the “We want a step change away from the plan: development of modular off-site construction within traditional thinking and more „„ let contracts worth up to £2.5 billion our Smart Motorway Programme, which should result towards creating value. We want „„ We trialled a new risk-based and evidence-based „„ developed direct relationships with more in these schemes being delivered more quickly approach to our asset interventions, covering a secondary contractors than before and safely. companies that can learn from their wide range of activities. „„ grown our Operations team by about 450 people experiences, and work together to „„ We reviewed and clarified our roles, A better maintained network „„ developed our first Quality Management System deliver ever-improving efficiency responsibilities and accountabilities across all our asset management processes and we are now Read more about this KPI – keeping our network in and productivity.” The Asset Delivery approach is performing well, with good condition – on page 28 working to better align asset-related activities, in reduced asset renewal unit costs, improvements to line with the defined roles across all aspects of Strategic report JIM O'SULLIVAN CHIEF EXECUTIVE asset condition, and increased customer satisfaction. asset creation, maintenance and replacement. Maintaining and renewing our network „„ We developed our asset decision support tools We continually monitor the condition of our roads and We developed the model through engagement with Read more about customer satisfaction on page 77 to provide better information on the condition of carry out investigations of any potential defects. our supply chain, and the Alliance puts integration our key carriageway and structures assets. We and collaboration at the centre of how our smart 5. RIS1 performance used these tools to underpin our business case for Our maintenance and renewals programmes are motorway programme will operate. renewing our assets in the second road period, as Efficiency based on the needs of our customers and our assets well as supporting delivery of our pavement (road in each region, as well as our capability to deliver The six partners will work with us to provide exemplar the investment effectively. We schedule our renewal surface) KPI. Read more about efficiency on page 23 performance and achieve results that include: activity across the year to minimise the overall impact „„ We carried out a review of our asset inspection of roadworks on our customers. „„ better safety, through better aligned and common programmes and are implementing a new Our delivery over the year assurance approach, ensuring that our assets are working practices and reduced time on site Our Efficiency Working Group shares best practice During 2018-19, we invested £674 million on renewing consistently assessed and the right information „„ more efficient delivery, through a programmatic to enable us to implement repeatable efficiency road surfaces, structures and technology on our recorded to inform future required investments. approach that will drive standardisation, initiatives. We have set efficiency targets for network. This represents 18% of our total planned production and off-site assembly „„ Following the tragic bridge collapse in Genoa, individual projects and provided incentives for project investment for capital maintainance within the first „„ improved customer service, with a reduction we confirmed that we do not have any bridges of managers. This is supported by a comprehensive road period. The table below provides an overview of in time needed for works and minimising any similar design. Our structures specialists worked review of the business changes which have the the extent of the renewal activity we carried out this disruptions for road users to understand the causes of the incident and used potential to contribute directly or indirectly to our year on the SRN, compared with our plans. the learning to review our policies and procedures overall efficiency target. We have clear timescales „„ increased investment in skills and innovation from for managing our structures. We had a number for these to be implemented and we are exploring the supply chain, supported by a secure and Asset renewals of overdue inspections (around 10%), which we emerging opportunities for further efficiencies. We long-term pipeline of work cleared by the end of March 2019. have created a network of efficiency managers to capture efficiencies and share knowledge. 1,118 Asset management Our new approach to Asset Delivery Road LANE MILES We recognise that an effective asset management Asset Delivery means that we directly manage This year, we appointed a Pavement (or 'road surface') surface approach, underpinned by accurate good quality data Efficiency Lead and we have identified further ways to 1,205 maintenance operations and scheme delivery. We are LANE MILES and information, is essential if we are to manage our moving to this operating model to ensure a longer improve pavement productivity. assets so they provide the sustainable level of service term, more effective approach to planning and that our customers need. Understanding our assets, We are working with our supply chain to identify 117 delivery, allowing us to take more control of our assets Vehicular LINEAR MILES knowing how they perform and managing them in a and implement better ways of working on our major and to really focus on customer need. barriers consistent and effective way is critical to ensuring construction schemes. This includes adopting 127 we can identify and deliver the right investments and In 2018-19, we rolled out the approach in Greater standardised designs, common components and LINEAR MILES keep our assets safe and serviceable. Manchester and Merseyside, which went live at year moving our construction off-site. We applied this end, and undertook the work necessary for go-live in approach to design eight over-bridges for the ongoing 103 This year, we established an Executive-level Asset A14 Cambridge to Huntingdon scheme, using LINEAR MILES the East region in October 2019. Half of our Company Drainage Management Steering Group to lead the delivery will be using the new model by 2019-20. standardised elements and allowing pre-fabrication of our Informed Asset Management Plan, our asset 108 rather than construction on-site. This has the benefit LINEAR MILES management improvement plan. Under this initiative, we are insourcing the decision- of improving quality control, reducing safety hazards making on all maintenance activity, scheme planning to road workers and generating efficiencies in how and development and network access, previously we deliver. Technology 343 undertaken by our supply chain. We expect this renewals & will keep our road assets in the same or better upgrades 429 condition, improve customer experience and generate savings from directly managing and contracting with 2018-19 targets 2018-19 renewals secondary contractors.

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Managing the Severn River Crossing Regional incident management has been increased Sustainability and the environment In the foreword to the second report, Mike Wilson, Since taking over responsibility for the operation, with the introduction of national network managers. We know that our network has an impact on the Chief Highways Engineer and Chair of the Highways maintenance and tolling collection for the Severn They maintain a real-time 24/7 overview of how the surrounding environment, and we aim to ensure England Strategic Design Panel, says: Bridges in January 2018, we have focused on whole network is operating across all our regions, that all our activity on the SRN contributes towards integrating their operation into our wider network employing strategies to minimise impacts of incidents a sustainable future and delivers long-term benefits “There has been good progress over on customers. Managing multiple events across and removing the toll charge. This was achieved in to the natural and built environment. We have two the past year by both the Strategic December 2018, ending 52 years of tolling at the regions, they support senior managers in the co- specific KPIs around delivering better environmental crossings. ordination of national communications for customers outcomes: noise and biodiversity. Design Panel and Highways England and are involved in developing pre-planned to guide the design and delivery of responses to future events. The project was delivered with minimum disruption Embedding our strategies and principles safer, better, more beautiful roads to the travelling public and fulfilled Government’s Strategic report Vehicle breakdown is one of the most prolific Our Sustainable Development and Environment which connect people and connect commitment to create a free-flowing, charge-free Strategies, published in April 2017, set out our vision motorway between England and Wales. incidents occurring on our network; we recorded our country. just one short of 15,000 vehicle breakdowns in 2018. for ensuring our work supports society and the wider national interest, as well as both minimising our We are working with our customers to close down their Where customers do not have private recovery arrangements, we call on our own vehicle recovery environmental impact and improving the environment Last year Highways England 33,000 tolling accounts, and to return their financial where possible. balances and tolling pass deposits. contract to remove customers and their vehicles published its vision and principles to a place of safety. Delivery against the terms of Our for good road design which follow the contract was higher this year than in any of the Sustainable Development and Environment Action A free-flowing network published in December 2018, describes how we previous five years. Following a trial in the West Plan, the themes of people, places and will deliver against our aspirations in the current road Midlands region, the practice of recovery operators processes. The Panel have examined Read more about these KPIs – network availability and period through 13 actions, supported by all areas being dispatched directly from our Regional Control incident clearance – on pages 25-26 of our business. We will seek to implement them in and challenged our processes to Centres when an incident is viewable on CCTV is collaboration with partners, stakeholders and local now firmly embedded. In December 2018, 56 such make recommendations to respond Our delivery over the year communities. instances (a record number) were recorded. With better to the needs of users and local Planning and managing roadworks over 20% of vehicles being recovered an average We formally published a design vision and principles communities. It is important for the We are working with our supply chain to improve how of 20 minutes quicker than previously, our ability to in January 2018 in The Road to Good Design. The we plan and manage roadworks. return the network to free-flowing conditions has been company to be challenged to improve principles are now embedded within our major greatly improved. design outcomes, but also become Regional reports on closures planned for that projects' processes, and teams within our schemes have been challenged to consider and respond more efficient in what it does. The new night are completed on a daily basis and released We have invested in the capability of our front-line positively. We also established a design review panel to a wide stakeholder base, including more than traffic officers, and have now coached over 60% design review panel overseen by the to provide scheme-specific advice and report to the 200 logistics companies ranging from Royal Mail to to work as single crews, maximising our ability to Highways England Strategic Design Panel. Panel will also help us do that.” National Express and John Lewis. Alongside this respond to incidents and ensure a free-flowing daily report, a forward look of the next seven days is network. In 2018, we also introduced new training and Strategic Design Panel Progress Report 2 Flood mitigation provided to enable these companies to plan. equipment to assist in the safe recovery of animals on our network. 85% of traffic officers have now The panel was established to put good design at the We are committed to reducing flood risk to those In response to customers' requests for additional been trained in handling dogs and 38% have been core of England’s road improvement projects, and using, or living next to, the SRN. We have a information about roadworks, we have developed trained in handling swans (the most common animals has members from across a range of disciplines, programme of schemes to address high priority a communications approach to improve user attended to in 2017); and all regions have been representing stakeholders who have a strong interest flooding locations throughout the remainder of the engagement. This includes providing customers with provided with animal handling kits. in the design of our network. The second progress current road period. key information about the works, potential disruptions, report, published in December 2018, sets out and the expected benefits of the project. Keeping the network open during severe progress over the past year (April 17 to June 18), In 2018-19, we mitigated 35 flooding hotspots and weather provides recommendations and looks ahead to the culverts, some of which were funded through the Read more about our customer service initiatives on Environment Designated Fund. We are continuously upgrading our winter service coming year. pages 78-79 vehicles to improve our levels of service. The newer vehicles are more efficient in their operation and the Air quality Developing our incident management use of de-icing materials, have enhanced visibility, and Air quality on and around the SRN remains our highest capability can treat roads with minimal driver intervention. The risk. In RIS1, Government established a £75 million We have worked hard this year on improving how newer vehicles have an increased 26 tonne capacity, Air Quality Designated Fund for RP1 (2015-20), to we manage incidents when they happen. A report enabling us to treat more of the network in a single trip. improve air quality on and around the SRN, with a commissioned by the ORR highlighted that we remain further £25 million designated for 2020-21. at the forefront internationally in terms of incident management and we have updated core incident management documents and ensured incident managers are briefed on best practice.

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In support of our ongoing compliance with the Carbon In January 2018, the Secretary of State for Transport National Plan for NO2, in August 2018, Government Our corporate carbon metric for the current road instructed Highways England to expand on this formally commissioned us to review 101 links on period has an established measurement and reporting work. We were asked to deliver a contingency the SRN that have been identified as potentially history. It measures our carbon footprint, the total plan to provide temporary HGV storage on exceeding the thresholds for poor air quality, and to the M20 SRN by 29 March 2019 that was less tonnes of carbon dioxide equivalents (tCO2e), from develop proposals for improving air quality at these our activities. We are committed to supporting the disruptive to Kent traffic than . locations. We have met our commitment to undertake DfT to meet the Greening Government Commitments We called this plan Operation Brock. preliminary modelling of these links by the end of carbon target, and we recognise the clear financial March 2019, and to identify potential mitigation benefits from becoming a more energy and resource In October 2018, the DfT further instructed that Brock measures, where possible, for development and efficient organisation. should extend to the Manston Airfield and the M26, delivery in 2019-20 and beyond. and should be used to avoid the need for Operation Strategic report The current DfT Greening Government Commitments Stack. By December 2018 – in partnership with the We are working with local authorities as they develop target is a 43% reduction by 2019-20, against the Kent Resilience Forum – we completed preparations local air quality plans, particularly those authorities 2009-10 baseline, modified in 2018 from a 36% for Operation Brock, and it has now been added to the included in Government’s UK Plan for Tackling reduction in the same timeframe. Our reduction trend Operation Fennel suite of plans. It remains available to Roadside Nitrogen Dioxide Concentrations. We remains on target to exceed this figure. Designated use as a first response should there be any unplanned have appointed Air Quality Focal Points to work spend on energy-efficient equipment brings an disruption at the ports. with the relevant authorities and ensure a shared immediate and long-lasting energy consumption understanding of the interactions between the SRN cost saving, along with a corresponding carbon The M20, Manston Airfield and the M26 can and the local air quality plans. Where local authorities cost saving. Our actions have contributed towards collectively be used to queue more than 10,000 lorries are considering the implementation of Clean Air Zones a 44.8% reduction against the baseline. heading for mainland Europe, keeping other traffic on their networks, we are preparing to support the flowing for people living, working and travelling in provision of associated signage on the SRN. Our supply chain recognise the need, imperative and around Kent. Using an escalation and phased and opportunity of carbon management. We monitor approach, if the M20 becomes full, lorries heading for We carried out air quality monitoring around a sound the carbon footprint of our supply chain as they the Port of Dover can be routed to Manston Airfield, barrier in the Netherlands and confirmed that it operate, maintain and improve the SRN. We are while the M20 is used to hold traffic for Eurotunnel. helped disperse pollutants to improve air quality for working with them to reduce emissions as part of our If needed, the coastbound M26 can also be used to those living closest to the network. As a result, we carbon management priority within our Sustainable queue Eurotunnel-bound HGVs. have developed a programme to undertake feasibility Development Strategy. To support this, our action plan reviews and deliver up to 15 large air quality barriers The project was not RIS1 funded and work was states that we will deliver a meaningful contribution to subsequently undertaken – with DfT approval – alongside the SRN to protect neighbouring properties the Government target of an 80% reduction in carbon (subject to wider environmental and engineering against the previous M20 Lorry Area project budget, emissions, against the levels in the 1990s, by 2050. with an investment spend of £30 million, and a further constraints). Construction work for the first barrier We will investigate and plan for the uptake of low alongside the M1 in started in £5 million for the M26. The work at Manston was carbon technology across the SRN. Our milestone is delivered by DfT and Kent County Council. spring 2019. to ensure timely and high-quality supply chain carbon submissions each quarter. Management of vehicle speeds is a potential A web-page for Operation Brock was mitigation for the improvement of air quality. In 2018, published on 15 March 2019 to provide we launched a trial of different speed management 6. Operation Brock advice to road users. This can be found at regimes on the M1 in South Yorkshire, to build an www.highwaysengland.co.uk/OperationBrock evidence base to support decisions around the use In 2015, the Kent Resilience Forum developed of this measure elsewhere on the SRN. This pilot is Operation Fennel. This is a suite of multi-agency 7. Developing RIS2 also intended to help other road authorities elsewhere delivered plans that can be called upon in the event in the UK, and local authorities, who may also be of disruption at the Kent ports – Dover and the Following the publication of our Strategic Road considering speed management as a means of Eurotunnel – to manage traffic in Kent. This included Network Initial Report and Connecting the Country improving air quality. Operation Stack, the Kent police-led solution which in December 2017, the DfT created their Draft RIS2 closes sections of the M20 to queue coast-bound alongside the Chancellor’s Autumn Statement in We recognise that improving air quality is a lorries heading for mainland Europe when channel October 2018. This announced our funding for the collaborative effort. For the second year, we were a crossings are seriously disrupted. second road period (2020-25) at £25.3 billion. major supporter of the Energy Saving Trust’s Fleet Heroes Awards, sponsoring the Freight Hero Award. In response, we developed and submitted our We congratulate Bibby Distribution (winner) and Draft Strategic Business Plan in January 2019. This Oxford City Council (highly commended) on their will be subject to an efficiency and deliverability success in this award category and for their work in review by the ORR, whose advice will inform the final managing their vehicle fleets to improve efficiency and RIS2. This is due to be published in autumn 2019. reduce emissions.

HIGHWAYS ENGLAND ANNUAL REPORT AND ACCOUNTS 2019 HIGHWAYS ENGLAND ANNUAL REPORT AND ACCOUNTS 2019 54 55 Our risk management Strategic report We work closely with our partners and stakeholders to mitigate the impact of all Key elements of our risk management A. Risk planning – Our policy, processes E. Risk treatment – We identify actions to risk. Our approach encompasses managing and procedures define the external or internal enhance opportunities and reduce threats (putting risk across our broad range of activities at framework criteria to be considered when identifying and controls in place) and any further activity that will operational, tactical and strategic levels. managing risk. help the risk owner manage the risk. Overview A. RISK PLANNING B. Risk identification – We have a defined F. Risk review, reporting and escalation Our risk management process focuses on the process to help identify, recognise and describe – We structure this area so that: early identification and management of risk. opportunities and threats to strategic, programme, Our framework provides the structure for all B. RISK IDENTIFICATION project and operational objectives. „„ risks and opportunities are managed in line with staff to identify, prioritise, manage, monitor and our risk appetite report risks. C. Risk assessment – We assess the „„ risks are updated as additional activity to manage probability and impact of all risk against a matrix them is delivered Our principal risks, identified by the Board C. RISK ASSESSMENT that recognises that any risk has the potential for and our Executive team, align to our „„ escalation of risk to senior management for multiple impacts. We encourage the risk owner to strategic objectives, which we agree with information, review and/or further management identify the most important impact and this helps our Shareholder, the Secretary of State for D. RISK EVALUATION action is on a timely basis us to prioritise our response. Transport. Risk identification and review exercises are carried out across all key G. Communication and consultation – E. RISK TREATMENT D. Risk evaluation – We compare the level business areas throughout the year and we AND CONSULTATION . COMMUNICATION We consult and communicate with internal and

G of risk assessed with our risk appetite (set by use the outputs from these to fully review and AND ESCALATION REPORTING RISK REVIEW, external stakeholders through all stages of the risk F. the Board) to help the risk owner to prioritise refresh all our risk register information regularly. management lifecycle to increase understanding management activity. and improve our risk management capability

Highways England risk management process based upon core requirements of ISO31000:2018 across the business. Our strategic objectives

Roles and responsibilities Our underlying principles are that risks are: The Board has overall responsibility for determining „ our risk appetite: the amount and type of risk that we „ identified, assessed and then mitigated in line with our risk appetite STRATEGIC are willing to take to meet our strategic objectives. BOARD AND EXECUTIVE LEVEL RISK Our Chief Executive (as Accounting Officer) is „„ monitored continuously responsible to Parliament for the stewardship of public „„ reported through our established procedures money and he exercises his delegations in line with TACTICAL RISK DIRECTORATE OR PORTFOLIO LEVEL the Finance and Reporting letter and Accounting Each Executive Director owns the directorate-level Officer letter, issued by our Shareholder. risks relevant to their area of responsibility. A formal review is completed on a quarterly basis and the While the ultimate responsibility for risk management results reported to the Board. The Executive team DIVISIONAL OR PROGRAMME LEVEL OPERATIONAL RISK rests with the Board, it delegates oversight of the escalate any significant risks, including those with risk management framework to the Audit and Risk the potential to jeopardise our business, to the Board. Committee. This committee reviews the effectiveness If acknowledged by the Board, the risk is added to of our internal controls and procedures to identify, SUB-OPERATIONAL RISK TEAM OR PROJECT LEVEL our corporate risk register as a Board-level risk. This assess and report risk. The outcomes from their work ensures that the Board can maintain visibility of its feed into the Board’s wider discussions. status and mitigation plan.

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Developing capability Assuring our risk We have deployed an enterprise-wide risk recording has a Head of Risk, with oversight provided by a Head We have several teams that work together to help comfort that we are managing risks properly. Each line tool to improve the way that we record and report risk. of Profession for risk management, who sits at portfolio the organisation manage risk properly. Each team of assurance provides a level of oversight, appropriate This went live across our major projects environment level. This role is linked to the Head of Corporate Risk has a unique perspective and specific skill sets. to their position within the business. The model allows in January 2018. During this financial year, we have Assurance to ensure cohesion at a corporate level. Their duties are coordinated carefully to ensure that each risk owner to draw from a breadth of information added further capability to the tool to enhance the there are neither gaps nor duplication of activity. We and rely on assurances obtained at the most visibility and reporting of risk data and this has helped We have developed online risk management have created a four lines of assurance model and appropriate level, relevant to the risk being managed. improve our risk management maturity. In 2019-20, training, aimed at our project risk managers, and risk this provides the Board with an appropriate level of we intend to roll out this tool across the rest of awareness training for non-specialist staff whose role Highways England. involves risk management to a lesser degree. Strategic report Alongside the development of our system functionality, We have also introduced a company-wide risk Four lines of assurance model we have increased the capability of our people. Within management community of practice to share expertise our Major Projects directorate, each programme now and examples of good practice.

Our risk appetite „„ Business reporting 1 „„ Assurance by management MANAGEMENT Recognising that we face risks inherent to the sector that we work in, and on behalf „„ Operational control CONTROL

of our key stakeholders, we have defined our risk appetite as follows: line assurance st 1

Safety Delivery „„ Compliance „„ Inspection We face various risks in the operation of We identify risks which might impact our 2 „„ Quality assurance CORPORATE the high-speed road network, and with our ability to meet key performance goals and OVERSIGHT construction and maintenance activities. capital outcomes. We adapt our approach „„ Business and project review While it is not appropriate to eliminate line assurance „„ Risk and management issues

to optimise and meet our short-term and nd all risk inherent in our activities, we take long-term targets. 2 all reasonable measures to minimise the potential for harm or loss of life for the public, road users and those who work for us. „„ Internal audit „„ Programme assurance 3 „„ Counter-fraud INTERNAL „„ Safety assurance INDEPENDENT Customer service Financial governance „„ Contract assurance ASSURANCE line assurance rd

3 „„ Risk assurance We want to be trusted that we can deliver We are willing to accept some our commitments and be respected by circumstances where we will balance those who use our services. In the pursuit financial risk to optimise our long-term of our delivery objectives, we will work to financial performance, operational ensure risk outcomes only have potential for performance and capital outputs. Decisions „„ National Audit Office low-to-medium impact on our customers and on these will be taken in accordance with „„ Transport Focus 4 stakeholders. our internal governance arrangements. „„ Office of Rail and Road EXTERNAL INDEPENDENT „„ Other ASSURANCE line assurance „ DfT client and Shareholder teams

th „ 4

HIGHWAYS ENGLAND ANNUAL REPORT AND ACCOUNTS 2019 HIGHWAYS ENGLAND ANNUAL REPORT AND ACCOUNTS 2019 58 59 Our principal risks and uncertainties Strategic report We take a thematic approach to risk reporting, and We rate our risks without control (raw) and with control have created reporting dashboards for nine themes, applied (current). Delivering to customers and communities linked to the performance specification within RIS1. These are the focus of the Board and are managed High risks are events that, before mitigation, Strategic risk Summary of mitigation by our Executive team. Management of these risks we consider have a high probability of We do not listen to, influence „„ Our Executive-led Customer Group oversees cross-business activity and has meant that our raw and current risk exposure has occurring and which could have an extreme or respond to changes in our ensures that it is in line with our Customer Service Strategy remained constant throughout the year. or major impact if they do so Raw risk customers' and stakeholders' „„ We have appointed customer service directors, who are responsible for expectations effectively, understanding the needs of our customers within their business areas as Medium risks are events that, before which might result in a poor well as delivering their element of the Customer Service Plan "Our performance in these areas is mitigation, we consider are likely to occur Current level of customer service good but addressing these risks is and which will have a significant impact if risk being delivered they do so critical to our success and it is right Customer service is one of our three imperatives and is an integrated part of our continuous improvement culture. that the Board and the Executive Low risks are events that, before mitigation, Our customer satisfaction score for roadworks is at its highest level since the beginning of the current road period. we consider are unlikely to occur and which We illustrate what we are currently doing in this area on pages 78-79. remain focused on them." will have an undesirable impact if they do so We do not manage „„ We have developed a corporate back-story to portray Highways England’s JIM O'SULLIVAN CHIEF EXECUTIVE our Company narrative reputation. This is applied across all communications, both internally and Raw risk effectively, which might result externally, with our Corporate Editor reviewing key documents to ensure Safety in reputational damage that we use a consistent tone of voice undermines our capability „„ We use our supply chain Engagement Council to communicate key Strategic risk Summary of mitigation Current and achievements messages and briefings with our contractor community risk „„ Our strategic stakeholder engagement is supported by a full Ineffective control over safety, „„ Our contractual obligations are set to ensure certain health and safety communications plan, which is reviewed regularly to ensure it is relevant health and wellbeing could lead standards are met, including the use of competent contractors at all levels and consistent Raw risk to an increase in staff and road „„ Our Health and Safety Management System incorporates policies and workers being physically or processes that direct our workforce and ensure the control of contractors We made good progress this year delivering to plan and with strong financial results. For further commentary on mentally harmed our performance, see our Chairman's and Chief Executive’s statements on pages 10-13. Current „„ We have an ongoing monitoring regime, including inspections, leadership risk tours, accident reviews and compliance and assurance reviews „„ We have dedicated health and safety professionals across each region Delivering performance and efficiency and programme team who provide health and safety advice and support to the business Strategic risk Summary of mitigation „„ Our wellbeing programme is in place and progress is monitored on a Government actions to „„ We are working with the Department for Environment, Food and Rural quarterly basis improve air quality may Affairs and the DfT to support Government's Air Quality Plan – including In the last four years, we have reduced accidents to traffic officers by a factor of four and to contracting staff by Raw risk impact on the ability engagement with local authorities 30%. Read more on page 68. to achieve our Licence „„ Our Air Pollution Strategy Board monitors the delivery of our obligations, internal Air Quality Strategy. This board includes representatives from the DfT, the Ineffective interventions or „„ We have Executive and Board-level committees to assess and approve Current performance indicators Department for Environment, Food and Rural Affairs and the Office for investments for road user safety investment in our safety interventions and monitor the success of their risk and deliver our capital Low Emission Vehicles Raw risk might lead to an increase in implementation programme „„ Our Major Projects Air Quality Roads Board manages scheme-level air road users being harmed „„ Our National Incident Casualty Reduction Plan and Regional Incident quality risks and considers interventions to mitigate air quality impacts Casualty Reduction Plans provide detailed programmes of interventions to Current reduce incidents on our network risk „„ We track, monitor and report on the overall levels of casualty incidents to We are working closely with Government to address air quality. We have advanced plans to understand our air our Executive and Board-level committees to help inform future investment quality challenges and to introduce mitigations where possible, which you can read about on pages 53-54. and interventions This year has seen a slight increase in killed and seriously injured cases, although there has been an overall reduction in the number of reported incidents, with fatal casualties falling by about 10%. More information on our road user safety interventions can be found on pages 68-75.

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Delivering performance and efficiency (continued) Asset stewardship

Our capital project efficiency „„ We have an Efficiency Delivery Plan and an Efficiency Manual in place to Strategic risk Summary of mitigation savings target may not support the business in identifying and managing their efficiency activity. Raw risk be achieved, which might Compliance is established through a robust assurance programme A significant asset failure „„ Our standards for the design, operation, inspection and maintenance of undermine our Shareholder’s „„ We have a framework for reporting efficiencies to the DfT and the ORR, on our network could assets are defined by the Chief Engineer in theDesign Manual for Roads Raw risk confidence in our delivery with monitoring of efficiencies built into our corporate performance result in a major incident, and Bridges (DMRB) Current capability for future reporting process leading to death, injury or „„ For structures (including geotechnical structures), we have an established risk investment periods vehicle/property damage design-check process that includes oversight by independent specialists „„ Our business efficiency managers, coordinated by our commercial team, Current working for the Chief Engineer calculate and assure individual efficiency cases identified by the business. risk Results are independently verified by our Corporate Assurance function „„ We have an incident reporting process and a programme of inspections „„ Efficiency targets are part of our executives' and managers' personal in place, which are defined within the DMRB and are completed by objectives to embed accountability for their delivery across the business either Highways England inspectors or our contractors (including our PFI concessionaires) Strategic report Since 2015, we have delivered £848 million of efficiencies. Moving into our final year, we are on track to deliver the „„ We use a suite of asset management systems to hold, manage and remaining £349 million. More information on our current financial performance is provided on pages 20-23. analyse data to identify needs and report performance Differing interpretation of „„ We have engaged a tax expert to help support our interpretation of current In 2018-19, we reviewed our policies and procedures for the management of structures following the tragic bridge VAT rules might result in a VAT rules collapse in Genoa, including ensuring that we have a robust inspection regime. For more information on our asset Raw risk significant impact on our „„ We have an open dialogue with the DfT and HM Treasury to discuss our management activities, please refer to page 50. funding and an increased interpretation and its impact on our current and future funding, based on cost on road schemes going best and worse-case scenarios We do not respond to our „„ We include clear responsibilities in our supply chain contracts and Current forward asset intelligence with processes specifically aimed at identifying and reviewing asset risk Raw risk appropriate maintenance or interventions interventions and this could „„ Our value management process uses risk-based techniques to prioritise This topic remains a risk. For further information, read our Financial review on pages 20-23. result in asset failure or our asset interventions and this is supported by technical input and Current network disruption oversight by our asset specialists Inappropriate information „„ Our policies, procedures and processes define the governance, control risk „„ Our operational processes and Designated Funds programme outline how and data governance, and management activities over any personal and sensitive information we use asset intelligence to develop and inform our capital programme Raw risk security and management that we hold or use in the normal course of our work „„ We have a robust assurance regime which covers our processes, might lead to the inefficient „„ We have a defined risk assessment framework for both information and contractor compliance and performance to ensure they are fit for use and delivery of our business operational technology, where we risk assess and assure the design, build Current consistently applied objectives and implementation of any technology solution (on and off our SRN) risk „„ We monitor across industry, accept Government best practice, and We ensured that 95.5% of our network was in good condition. Read more about our asset delivery approach on regularly review all significant data risks at the Board and the Audit and page 50. Risk Committee Since 2015, we have increased our capability and capacity to understand and improve on our data management People and company and security practices. See page 64 for further detail. Strategic risk Summary of mitigation We may fail to engage „„ Our Supply Chain Group coordinates the ongoing monitoring and with or understand the intervention around our contractor stability Our remuneration flexibility „„ We work in collaboration with the DfT to identify and manage the risks of Raw risk impact that our increased „„ We employ standard procurement evaluations as part of our tendering is not kept under scrutiny, improving and maintaining our current remuneration processes investment will have on our process and our published Procurement Plan is updated regularly Raw risk which might impact on our „„ Our career pathways framework provides clear direction on career supply chain. This might ability to deliver the RIS Current „„ Our Routes to Market procurement approach is designed to establish development and gives greater flexibility in optimising internal career result in an inability to deliver outputs and associated risk long-term relationships and stable demand visibility to drive supplier development-related moves our commitments to time, Current benefits efficiently investment in skills and capability risk „„ Our governance arrangements, including our Recruitment and Reward budget and quality „„ We regularly review our main contractor relationships and market Executive, approve all new permanent posts and contingency hires to resilience to provide assurance to our Board ensure appropriate control over our pay spend is applied Our employee engagement score has increased to 52% and our employee enablement score to 56%. We are We monitor the viability of our supply chain closely. Our handling of the Carillion failure is described on page 49. committed to developing our staff to build our organisational capability and capacity. For more information on what we are doing, please see pages 86-87. We do not achieve „„ We have increased our internal commercial capability and this resource is commercial maturity embedded within project delivery, providing commercial leadership and Raw risk and embed contract assurance to all stages in a project’s lifecycle management capability fast „„ Our Commercial Head of Profession (Commercial Director) is responsible enough, which could result in for developing commercial standards, practices, processes and training to Current reduced ability to deliver the support improved commercial awareness risk RIS portfolio to time, budget „„ We have an established governance process in place to deal with contract and quality, and achieve the interpretation issues and to resolve emerging issues outcomes and benefits we have committed to We have increased our engineering programme management and supply chain management skills significantly in the current year. See page 85 for a description of our organisational change programme.

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Economic crime Government Functional Standard ‘GovS 013’ has We refer to the collective of fraud, bribery, corruption established that we are compliant in all aspects of and money laundering and modern slavery as the standard. Our ability to deal with economic crime Viability statement economic crime. We are determined to manage this has increased during the past financial year and we risk across the Company and our supply chain. As well are progressing a risk-based programme of proactive The Board has assessed the viability of the Company our understanding of likely demand, customer service as the tragic human consequences, exposure could work to help reduce the level of risk that we face. over the six years to March 2025, in line with our expectations, technological advancements and five-year road investment periods (currently 2015-20 strategic levers, this report sets out the challenges we lead to financial loss or delays to delivery, and might Brexit impact on customer and stakeholder confidence in and 2020-25). They review our going concern on an face over the medium to long-term in responding to how we respond to any issues that we find. In 2017, Government submitted its notification to annual basis, taking into account Government funding, Government’s ambition for the SRN. leave the EU in accordance with Article 50. The our business plan, our risk management framework

In line with our values, we require all staff to act triggering of Article 50 started a two-year negotiation and our risk register, including consideration of our In October 2018, the Chancellor’s Autumn Statement Strategic report honestly and with integrity to safeguard the public process between the UK and the EU. Any subsequent current position in the first road period and our plans for announced £25.3 billion of funding for the SRN funds for which they are responsible. All instances of changes in legislation, regulation and funding the second. between 2020-25. This announcement coincided economic crime will be dealt with effectively, ethically arrangements are subject to the outcome of these with the preparation of DfT’s Draft RIS2. Together with and in accordance with the law. negotiations. Currently, we have no significant impacts We considered six years to be an appropriate the summary of the responses to Shaping the Future on our financial statements in the short-term from timeframe, given the certainty of our final year in the of England’s Strategic Roads, this forms part of the This year we have focused our efforts on raising fraud Government making the formal notification. We will current road period and the increasing certainty over Draft RIS required by the Infrastructure Act 2015 and awareness through targeted training events and the keep this under review as negotiations continue. our next five-year funding settlement. our Licence. Once finalised, our funding for the next use of internal social platforms, such as Yammer. road period will be provided through the National Our counter-fraud culture is maturing throughout We have delivered a solution to assist with planning We set out our proposals for the next road period Roads Fund, which reserves the revenues of Vehicle our organisation, with appropriate channels in place for potential traffic congestion at the Kent ports, in our Draft Strategic Business Plan, published in Excise Duty within England for road investment. for staff, customers and our supply chain to raise Operation Brock, outlined in detail on page 55. January 2019. Our final funding position will be concerns safely. Our suite of policy, processes and agreed in late 2019, and will incorporate the output Our Delivery Plan, budgets and related financial procedures reflects and builds upon current legislative General Data Protection Regulation from this plan, the ORR Efficiency Review, and the models are used to project cash flows, monitor requirements. These should be understood by all staff, The EU General Data Protection Regulation (GDPR), results of Government’s 2019 Spending Review. financial risks and our liquidity position, and forecast no matter what their role. which harmonises data privacy laws across future funding requirements relevant to our Licence. Europe, took effect in May 2018. In preparation for We are funded from the public purse by grants-in- Linked to our ability to meet our strategic objectives, We have improved our understanding of our risk its implementation, we reviewed and updated our aid from the DfT. Before the start of each funding our principal risks (on pages 60-63) are identified profile, which captures internal and external economic privacy-related policies and guidance and rolled out period, we work with the DfT and the ORR to through a robust assessment that includes a crime risks, including those introduced through GDPR training across the Company. This enables determine our outputs, which provides a high degree continuous cycle of reporting and review at all levels of cybercrime. These are based on industry and all of our staff and supply chain to understand their of certainty over our capital and resource funding, the business. Government information, updated on an annual basis. responsibilities and the impact of the legislation. detailed in the Statement of Funds Available and set We use this information to carry out proactive testing We worked with our commercial and procurement out in Government’s annual Resource Delegated We analyse the Company’s resilience to the potential over our control activity to improve our resilience. colleagues to include within relevant contracts Expenditure Limit. The Statement of Funds Available, impact of these risks, based on: the GDPR-compliant clauses issued by the Crown covering April 2015 to March 2020, totalled We have seen an increase in the number of Commercial Services. £11.4 billion of capital funding to meet our first road „„ the Company’s ability to withstand severe yet fraud allegations from external sources. All period commitments. Government’s Spending Review plausible scenarios allegations are investigated in line with our Since GDPR came into effect, we have seen an 2015 confirmed our resource funding and, for the „„ the effectiveness of mitigating actions to reduce policies. The Counter-fraud Group and the Audit increase in the number of subject access requests for final year (2019-20), this is £1.1 billion. As we are a either likelihood or impact company owned by the DfT, our creditors can rely on and Risk Committee receive reports on the work personal information and our average response time „„ the Board’s conclusions from their regular Government security, and the statutory obligations of the Counter-fraud team, and the results of all is consistently within the legislative deadline of one monitoring and review of risk management and of the Secretary of State for Transport, to settle any investigations completed in the year, together with calendar month. internal control systems, as described on page 117 recommendations for future prevention. liabilities due. We are improving and streamlining our information In making this statement, the Board has considered For each funding period we prepare a Working proactively with our supply chain, we are rights practices, and working proactively with our the safety of the SRN, the current political environment, a three-year business plan raising the profile of economic crime risk across the supply chain to reduce the risk of non-compliance, Strategic Business Plan, the Company’s performance in the first road period and annual delivery plans. Together these detail sector. We have created the Supply Chain Economic while promoting the fair and ethical handling of and the viability of our supply chain, in view of the how we will deliver our strategic outcomes, measure Crime Group, a forum which brings together our staff personal information. We are also developing collapse of Carillion during the year. The scenarios our success and identify our future improvement and supply chain to highlight areas of commonality automation techniques to improve the efficiency of were considered in terms of the impact on our financial plans. Our performance is monitored by the ORR on and share best practice. our processes. resources and the delivery of our first road period a quarterly basis and we refresh and republish the commitments. We fully align to the work of the Cabinet Office Delivery Plan annually. in improving counter-fraud capability across Based on these assessments, the Board has a The statutory process for setting the next road period Government. This year, our assessment of our reasonable expectation that the Company will continue began in December 2017, with the publication of our performance against what is now called the in operation and meet its liabilities as they fall due over first Based on Strategic Road Network Initial Report. the period to March 2025.

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