Local Highways Maintenance Challenge Fund Application Form The level of information provided should be proportionate to the size and complexity of the scheme proposed. As a guide, for a small scheme we would suggest around 10 to 15 pages including annexes would be appropriate and for a larger scheme, 15 to 30 pages. A separate application form should be completed for each scheme up to a maximum or one large bid and one small bid for each local highway authority.

Applicant Information Local authority name(s)*: Worcestershire County Council *If the bid is a joint proposal, please enter the names of all participating local authorities and specify the lead authority Bid Manager Name and position: Mr. Ian Bamforth, Highways and PROW Operations Manager Name and position of officer with day to day responsibility for delivering the proposed scheme. Contact telephone number: 01905 766701 Email address: ibamforth@worcestershire.gov.uk Postal address: Worcestershire County Council County Hall Spetchley Road, Worcester WR5 2NP

When authorities submit a bid for funding to the Department, as part of the Government’s commitment to greater openness in the public sector under the Freedom of Information Act 2000 and the Environmental Information Regulations 2004, they must also publish a version excluding any commercially sensitive information on their own website within two working days of submitting the final bid to the Department. The Department reserves the right to deem the business case as non-compliant if this is not adhered to.

Please specify the weblink where this bid will be published: http://www.worcestershire.gov.uk/info/20055/strategies_plans_and_bids/806/the_local_transport_plan/2

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SECTION A - Scheme description and funding profile

A1. Scheme name: Carriageway Asset Restoration Project

A2. Headline description: Please enter a brief description of the proposed scheme (in no more than 50 words) Major maintenance of the County's carriageway network restoring the Highways' condition to levels enjoyed prior to the recent years' severe weather damage and reduction in base level funding. The project will enhance the Highway Asset value and access to essential commercial centres and key tourism businesses.

A3. Geographical area: Please provide a short description of area covered by the bid (in no more than 50 words) The project will consist of some 111 sections of roads distributed all around the County, totalling some 135km in road length. Please append a map showing the location (and route) of the proposed scheme, existing transport infrastructure and other points of particular interest to the bid e.g. development sites, areas of existing employment, constraints etc. Map = Appendix 1

A4. Type of bid (please tick relevant box): Small project bids (requiring DfT funding of between £5m and £20m) Major maintenance, strengthening or renewal of bridges, tunnels, retaining walls or other structures

Major maintenance or renewal of carriageways (roads) ✓

Major maintenance or renewal of footways or cycleways Major maintenance or renewal of drainage assets Upgrade of Street Lighting Large project bids (requiring DfT funding of between £20m plus) Major maintenance, strengthening or renewal of bridges, tunnels, retaining walls or other structures Major maintenance or renewal of carriageways (roads) Major maintenance or renewal of footways or cycleways

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Major maintenance or renewal of drainage assets Upgrade of Street Lighting

A5. Equality Analysis Has any Equality Analysis been undertaken in line with the Equality Duty? Yes (appendix 2)

SECTION B – The Business Case

B1. The Scheme – Summary/History (Maximum 200 words) Please select what the scheme is trying to achieve (this will need to be supported by short evidence in the Business Case). Working in partnership with the Worcestershire LEP, 'Open for Business' is WCC's driving priority to increase economic growth through our four Game Changer initiatives, supporting our top economic strategic businesses and tourism, particularly in rural areas. As such, WCC needs to deliver and maintain a high-quality supporting highways' infrastructure. In recent years due to exceptionally adverse weather conditions and challenges to maintenance funding, this has become more difficult. WCC is committed to Modal Shift and has delivered a number of schemes under its recent Local Transport Plan in recent years. The maintenance of these assets to retain existing users and support an increase in road users remains a challenge. Our objective is a combined asset management approach to improve our highways infrastructure to restore the condition of the road network back to pre-2012 levels, providing high quality roads in key areas, alongside improving our overall network asset and condition. Offering potential for realistic early delivery of the project, this bid is supported by the clear commitment of match funding from the Local Authority to the value of £6m from 2015/16, representing 50% of the total bid value.

B2. The Strategic Case (Maximum 650 words) This section should set out the rationale for making the investment and evidence of the existing transport problems, set out the history of the asset and why it is needed to be repaired or renewed. It should also include how it fits into the overall asset management strategy for the authority.

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In particular please provide evidence on the relevant questions/issues at paragraph 15 onwards of the accompanying Challenge Fund guidance. Supporting evidence may be provided in annexes – if clearly referenced in the strategic case. This may be used to assist in judging the strength of your strategic case arguments but is unlikely to be reviewed in detail or assessed in its own right. So you should not rely on material included only in annexes being assessed. What are the current problems to be addressed by your scheme? (Describe any economic, environmental, social problems or opportunities which will be addressed by the scheme. An improved highways infrastructure will help unlock economic growth by supporting the four Game Changer initiatives, our key businesses and tourism. Improving the national cycle route (NCN 45) will encourage more cyclists and sustainable travel. Why the asset is in need of urgent funding? Our asset management principles are grounded on early intervention to ensure that the cost of recovery in the condition of our highways to a state of ongoing maintenance, is at an affordable cost. WCC has arrived at a 'tipping point' whereby sections of the asset to be treated have deteriorated rapidly due to: • Recent severe weather and the associated issue of "Accelerated Pothole

Propagation" (A.P.P.). • Recent severe weather resulting in subgrade saturation (permanent failure) • Rapid diversification/expansion of rural business' resulting in much higher HGV

usage. Explaining A.P.P; under normal circumstances, steady state condition is achieved by treating at least 4% of the network annually. Anything more than this will bring about improvement. Any less and the overall condition decreases. Problems persist when defects aren't treated as part of the annual maintenance programme. These untreated lengths contribute to the PI scores for the relevant road classes and are susceptible to water ingress and potential impacts of freeze/thaw damage, bifurcation and subsequent potholing. Usually, these defects survive for many years. Previously, lengths of cracking would appear along a road, with little change in severity and extent when revisited in subsequent annual inspections. Exceptional adverse weather has significantly accelerated degradation, thus reducing the time between the development of a crack and when potholing appears. This has resulted in sub-base failure on some sections of the county's network. The water table in many areas attained an unprecedented height and remained for many months, causing deformation and degradation of the carriageway. The expansion of local businesses leading to an increase in HGV movements on sections of the network not designed for such traffic has also had an effect. Without rapid intervention, sections of affected roads will quickly deteriorate further, necessitating extensive palliative maintenance and disruption to road users. This would potentially jeopardise local enterprises that have successfully expanded their HGV operations and impact on key roads supporting Worcestershire's 'Game Changer sites'.

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What options have been considered and why have alternatives have been rejected? WCC have considered 3 options: 1. "Shallow" Minimal Intervention: Spreads money further initially but increases

whole-life cost but effects can be short-lived. 2. Part structural repairs: This approach is our norm. It offers best value for money

overall utilising preventative processes and medium depth structural maintenance to achieve a lower whole-life cost

3. Full depth structural repairs: Used when options 1 and 2 have not been possible and the foundation of the road requires attention.

The bid uses a "blended" approach to combine the best of options 2 and 3. Addressing the root cause of failure, this approach delivers best value and lowers the whole life cost. Well established asset management tools have been developed by the county's 'in house' Asset Management team these include a Financial Impact Modelling Tool (FIMT) and spatial data management techniques shown in Using these tools, we have prioritised 135km of carriageway to be treated (Appendices 3 to 6) What are the expected benefits / outcomes? The restoration of our highways infrastructure in line with our Asset Management Plan will benefit areas of economic development and key businesses (See Appendix 7). Please provide information on the geographical areas that will benefit from your scheme. You should indicate those areas that will directly benefit, areas that will indirectly benefit and those areas that will be impacted adversely. Appendix 1 shows how the project will directly benefit all road users, many businesses and residents in Worcestershire, providing better access to tourism and commercial centres. What will happen if funding for this scheme is not secured - would an alternative (lower cost) solution be implemented (if yes, please describe this alternative and how it differs from the proposed scheme)? WCC will continue to manage the asset as best we can. However, our recovery approach would slow down and reach the tipping point sooner (see previous section referring to APP). What is the impact of the scheme? The general public and businesses in Worcestershire will perceive an overall improvement in the highway network conducive to the economic aspirations of WCC and WLEP. It is hoped that new business start-ups will be encouraged and that existing businesses will expand in areas where the highway asset is well maintained and affords good connectivity. This bid and our approach is consistent with the optimisation of our Asset Management Plan to improve the overall condition of the Highways network and increase the asset value.

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B3. The Financial Case – Project Costs Before preparing a scheme proposal for submission, bid promoters should ensure they understand the financial implications of developing the scheme (including any implications for future resource spend and ongoing costs relating to maintaining and operating the asset), and the need to secure and underwrite any necessary funding outside the Department’s maximum contribution. Please complete the following tables. Figures should be entered in £000s (i.e. £10,000 = 10). Table A: Funding profile (Nominal terms)

£000s 2015-16 2016-17 2017-18 Total

DfT Funding Sought

£750 £2250 £3,000 £6,000

LA Contribution

£3250 £1,750 £1,000 £6,000

Other Third Party Funding

£0 £0 £0 £0

Please note, the above is indicative of the very flexible availability of the WCC element of funding. The County's funding can be spread evenly over the three years or biased towards any particular year to suit DfT requirements. Notes: 1) Department for Transport funding must not go beyond 2017-18 financial year. 2) A minimum local contribution of 10% (local authority and/or third party) of the project costs is required.

B4. The Financial Case - Local Contribution / Third Party Funding Please provide information on the following points (where applicable): a) The non-DfT contribution may include funding from organisations other than the scheme

promoter. Please provide details of all non-DfT funding contributions to the scheme costs. This should include evidence to show how any third party contributions are being secured, the level of commitment and when they will become available. N/A

b) Where the contribution is from external sources, please provide a letter confirming the

body’s commitment to contribute to the cost of the scheme. The Department is unlikely to fund any scheme where significant financial contributions from other sources have not been secured or appear to be at risk.

Have you appended a letter(s) to support this case? X N/A

c) Please list any other funding applications you have made for this scheme or variants thereof

and the outcome of these applications, including any reasons for rejection. None

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B5. The Financial Case – Affordability and Financial Risk (maximum 300 words) This section should provide a narrative setting out how you will mitigate any financial risks associated with the scheme (you should refer to the Risk Register – see Section B10). Please ensure that in the risk register that you have not included any risks associated with ongoing operational costs and have used the P50 value. Please provide evidence on the following points (where applicable): a) What risk allowance has been applied to the project cost? A 3% risk allowance has been applied to the Project Cost. The previous experience of delivering two similar projects coupled with a Target Price Contract (with a suitable Contractors share formula and Efficiency factor) with design and delivery by an experienced "Worcestershire Highways" team will mitigate this risk.

b) How will cost overruns be dealt with? In addition to contractual procedure the Project will allocate a Project board and be subject to the County's proven Project Governance processes. This includes the use of value engineering principles.

c) What are the main risks to project delivery timescales and what impact this will have on

cost?

Clashes with Public Utility major Projects – mitigated by regular planning meetings - no impact on cost.

Lack of design and delivery resource – mitigated by flexibility of funding allowing Project to run over the three year term using permanent employees – no impact on cost.

Lack of bituminous material supplies – mitigated by extensive use of recycled materials and processes – reduction in cost.

B6. The Economic Case – Value for Money a) If available for smaller scheme bids, promoters should provide an estimate of the

Benefit Cost Ratio (BCR) of the scheme. The estimated BCR = 1.3 b) For larger schemes costing £20 million or more we would expect the bid to include a

BCR and this should align with WebTAG - https://www.gov.uk/transport-analysis-guidance-webtag

Where a BCR is provided please provide separate reporting in the form of an Annex to the bid to enable scrutiny of the data and assumptions used in deriving that BCR. This should include: - A description of the key risks and uncertainties in the data and assumptions and the impact

these have on the BCR;

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- Key assumptions including (but not limited to): detail of the data used to support the analysis, appraisal period, forecast years, level of optimism bias applied; and

- A description of the modelling approach used to forecast the impact of the scheme and evidence to demonstrate that it is fit-for-purpose.

c) Please provide the following data which may form a key part of our assessment: Note this material should be provided even if a BCR estimate has been supplied (unless already covered in a VfM Annex).

A description of the do-minimum situation (i.e. what would happen without Challenge Fund investment).

Ongoing cycle of reactive/palliative work would continue without addressing the underlying problem.

Details of significant monetised and non-monetised costs and benefits of the scheme (quantified where possible)

Non-monetised cost benefits:

Improve the overall condition of the highway network to support tourism businesses in rural parts of the county and the four planned Game Changer initiatives.

Less congestion and disruption to journey times if road infrastructure is remedied without having to repair annually .

Improvements to NCN 45 – a national cycle route through the county to encourage more sustainable travel.

Length of scheme (km) The total length of treated carriageway will be 135km

Number of vehicles on affected section (AADT in vehicles and if possible split by vehicle type) – to include details of data (age etc.) supporting this estimate.

N/A

d) Other VfM information where relevant - depending on type of scheme bid:

Details of required restrictions/closures if funding not provided (e.g. type of restrictions; timing/duration of restrictions; etc.)

N/A

Length of any diversion route, if closure is required (over and above existing route) (km)

N/A

Regularity/duration of closures due to flooding: (e.g. number of closures per year; average length of closure (hrs); etc.)

A number of roads included in the project are a key part of diversion routes when flooding occurs in Worcestershire, such as experienced in the last winter of 2014. These routes are often in use for in excess of two weeks due to flooding.

Number and severity of accidents: both for the do minimum and the forecast impact of the scheme (e.g. existing number of accidents and/or accident rate; forecast number of accidents and or accident rate with and without the scheme)

N/A

Number of existing cyclists; forecasts of cycling usage with and without the scheme (and if available length of journey)

NCN 45 is a popular national cycle route that runs through the county from Twyning (Glos) to Bridgnorth (Shrops) via

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Worcester, Droitwich, Stourport & Bewdley. Our automatic cycle counters on the route indicate upwards of 200,000 cyclists using the route per annum. We anticipate that based on current usage, an improved road condition and the planned connection with Upton Severn, the number of cyclists will increase.

B7. The Commercial Case (maximum 300 words) This section should set out the procurement strategy that will be used to select a contractor and, importantly for this fund, set out the timescales involved in the procurement process to show that delivery can proceed quickly. What is the preferred procurement route for the scheme? For example, if it is proposed to use existing framework agreements or contracts, the contract must be appropriate in terms of scale and scope. The procurement route for this project would be to utilise the existing Highway Maintenance Service Contract (HMSC) that exists between the County Council and Ringway Infrastructure Services. The Contract was carefully designed to be sufficiently flexible to cater for additional influxes of funding over and above the anticipated base line. The Contract, which is an evolution of the County's previous Term (Highways) Maintenance Contract, is an NEC Term Service Contract (option C) and has a number of mechanisms to provide Cost savings during the life of the Contract, In line with the new HMEP document. In addition to a Contractors Share arrangement, the Contract contains an efficiency factor. The two mechanisms allow real Cost savings to be achieved year on year during the life of the Contract. This is achieved by the Worcestershire Highways team working together to ensure works are carried out to the maximum efficiency. By using this existing Contract there is also an obvious and immediate cost saving as it mitigates an additional procurement exercise. This also means the project could commence from April 1st 2015 should this bid be successful. The minimum Contract duration exceeds the length of this project. *It is the promoting authority’s responsibility to decide whether or not their scheme proposal is lawful; and the extent of any new legal powers that need to be sought. Scheme promoters should ensure that any project complies with the Public Contracts Regulations as well as European Union State Aid rules, and should be prepared to provide the Department with confirmation of this, if required. An assurance that a strategy is in place that is legally compliant is likely to achieve the best value for money outcomes is required from your Section 151 Officer below.

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B8. Management Case - Delivery (maximum 300 words – for b) Deliverability is one of the essential criteria for this Fund and as such any bid should set out any necessary statutory procedures that are needed before it can be constructed. a) An outline project plan (typically in Gantt chart form) with milestones should be included as

an annex, covering the period from submission of the bid to scheme completion. The definition of the key milestones should be clear and explained. The critical path should be identifiable and any contingency periods, key dependencies (internal or external) should be explained.

If successful WCC plan to treat 85 separate sites. The programming of these sites over the three year term will be dependent on a number of factors including Public Utility works, major public events, other WCC LTP projects and future Housing / commercial developments. Once the above and other issues have been considered we can hand the Project's scope of works with all the associated constraints to the Contractor to programme in the most efficient way. Appendix 7 is a work in progress and will be substantially enhanced should the bid be successful.

Has a project plan been appended to your bid? Yes (Appendix 8) b) Please summarise any lessons your authority has learned from the experience of delivering

other DfT funded programmes (such as pinch point schemes, local majors, Local Sustainable Transport Fund, and Better Bus Areas) and what would be different on this project as a result.

A Pinch Point project is in progress (Hoobrook Link Road, Kidderminster). Issues overcome on that scheme – acquisition of land can be protracted; relocation of major utility infrastructure can be subject to delay and in obtaining third party approvals (CRT, DECC). Active engagement with third party stakeholders is key to keeping them focussed using a clearly defined and executed stakeholder engagement plan early in the project as identified in the Risk Register. Local Sustainable transport Fund – Redditch Chose How you Move, and Major Scheme - Worcester Transport Strategy – CPOs protracted and successfully resolved within programme, engagement with internal and external stakeholders, communicate and reinforce the scheme objectives within the democratic decision process, high tech element prices can change in both directions Additional lessons include: The two previous £15m projects (£30m WCC Capital investment) we have completed have provided clear experience in terms of delivery of similar maintenance projects. • Clear asset identification of roads and clustered works packages. • Investing in experienced staffing resource, to ensure high quality works

completed. • Sound methodology of types of materials used and work methods to deliver.

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• Strong advanced work programming, coordination and communications, to ensure integrate with others including utilities to minimise impacts.

B9. Management Case – Governance (maximum 300 words) Please name who is responsible for delivering the scheme, the roles (Project Manager, SRO etc.) and set out the responsibilities of those involved and how key decisions are/will be made. An organogram may be useful here. This may be attached as an Annex. Project Manager; Mr Ian Bamforth - Highways and PROW Operations Manager SRO; Mr John Hobbs – Director of Business, Environment and Community (BEC) The project will be delivered by our existing "Worcestershire Highways" team which comprises of a very experienced group of Client and Contractor staff. Day-to-day design, planning and operational issues would be dealt with at this level. The team is well versed in managing such schemes using the NEC Term Service Contract and are well aware of their individual responsibilities and requirements. As WCC procedure requires for such projects a Project Board would be established with Ian Bamforth as Project Manager. This board would report to the BEC Programme Board. The Project will follow well established WCC processes which were developed along the Prince 2 model.

B10. Management Case - Risk Management A risk register covering the top 5 (maximum) specific risks to this scheme should be attached as an annex including, if relevant and in the top 5, financial, delivery, commercial and stakeholder issues. Please ensure that in the risk register cost that you have not included any risks associated with ongoing operational costs and have used the P50 value.

Has a risk register been appended to your bid? ✓Yes (appendix 9)

SECTION C – Monitoring, Evaluation and Benefits Realisation

C1. Benefits Realisation (maximum 250 words) Please provide details on the profile of benefits, and of baseline benefits and benefit ownership. This should be proportionate to the size of the proposed scheme. The key baseline benefit will be to bring the road network back to 2010/11 levels before the severe weather of the last three years adversely affected the infrastructure. Offering value for money from an asset management perspective.

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Worcestershire is one of the best performing Local Enterprise Partnership (LEP) areas in terms of advanced manufacturing, cyber security and a strong base in horticulture and food sector businesses. As a well-connected county, home to global brands such as GKN, Npower and Worcester Bosch, this scheme will enhance the highways infrastructure county-wide to afford better access to local, national and international markets for the movement of products, services and a skilled workforce. To accelerate economic growth in Worcestershire, four key Game Changer initiatives are planned to further attract and retain high value-added businesses and support new residential developments. Creating new jobs and attracting inward investment, this scheme will improve the highway infrastructure surrounding and supporting these sites. Supporting over 25,000 jobs and generating revenue for nearly 1,500 businesses, tourism is one of the top five industry sectors in Worcestershire contributing £538m per annum to the local economy. This scheme will improve the highway network to support tourism, in particular our world-class attractions such as the West Midlands Safari Park, the Three Counties Showground and the rural areas of the county that are dependent on road transport.

C2. Monitoring and Evaluation (maximum 250 words) Evaluation is an essential part of scheme development and should be considered and built into the planning of a scheme from the earliest stages. Evaluating the outcomes and impacts of schemes is important to show if a scheme has been successful. As identified in the Risk Register, there will be stringent controls for monitoring and evaluation. Adhering to Prince2 methodologies for Project Management governance, all projects are reviewed regularly by a monthly Programme Board. As the upper tier of the Integrated Transport Programme governance structure, it has responsibility for the management and scrutiny of all programmes, budgets, risks, milestones and decisions for major project variances. Feeding into the Programme Board will be the Project Board for the individual project. In addition to the above a weekly Contract Management Team meeting with senior management from WCC and Ringway Infrastructure Services is held. This meeting reviews all performance aspects of the HMSC and the performance of this project will become a regular agenda item. Please set out how you plan to measure and report on the benefits identified in Section C1, alongside any other outcomes and impacts of the scheme The physical improvements to the network will be measured by SCANNER and our in house CVI team and reported in line with DfT guidelines and national codes of practice. Supporting the wider social and economic benefits, our Commercial and Change Directorate will continue to work in partnership with the Worcestershire LEP and other partners to monitor and report changes in GVA, increases in tourism spend and visitors, the business engagement of Worcestershire's strategic businesses and increase in public perception and satisfaction relating to the condition of our roads. The project plan will incorporate stringent controls for monitoring and evaluation to monitor and measure the outputs and outcomes.

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The following will be monitored, reviewed and reported: •Value for money/reduction in terms of the overall cost of asset management •Costs and timescales of completion in line with the project plan. •Key milestones met for all project phases •Stakeholder engagement plan and communication plan milestones and actions •Road schemes that can be completed earlier than planned in the project plan •Reduction in overall reported defects such as potholes to addressed schemes •Cost reduction/eradication in the number of remedial and palliative works •Procurement costs and efficiency savings where possible for materials and recycling through joint working with Shropshire County Council via Ringway Infrastructure Services •Increase in annual public perception survey regarding the general condition of roads •Reduction in reported complaints to roads addressed •Reduction in disrupted journey times leading to increase in public satisfaction of condition of roads. •Record increase in usage on NCN 45

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