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SESSION 2001/2002 SEVENTH REPORT
Ordered by the Public Accounts Committee to be printed 17th April 2002
Report: 07/01/R (Public Accounts Committee)
TOGETHER WITH THE PROCEEDINGS OF THE COMMITTEE
SEVENTH REPORT FROM PUBLIC ACCOUNTS COMMITTEE
Standing Orders under Section 60(3) of the Northern Ireland Act 1998 have provided for the establishment of the Public Accounts Committee. It is the statutory function of the Public Accounts Committee to consider the accounts and reports of the Comptroller and Auditor General laid before the Assembly.
The Public Accounts Committee is appointed under Standing Order No. 51. It has the power to send for persons, papers and records and to report from time to time. Neither the Chairperson nor Deputy Chairperson of the Committee shall be a member of the same political party as the Minister of Finance and Personnel or of any junior minister appointed to the Department of Finance and Personnel.
The Committee Members were appointed by the Assembly on 24 January 2000. They will continue to be Members of the Committee for the remainder of the Assembly, unless it orders otherwise. The Chairperson Billy Bell and Vice-Chairperson Sue Ramsey were previously appointed on 15 December 1999. The full membership of the Committee is as follows:-
All publications of the Committee (including press notices) are on the internet at archive.niassembly.gov.uk/accounts.htm
All correspondence should be addressed to The Clerk of the Public Accounts Committee, Room 371, Parliament Buildings, Stormont, BELFAST, BT4 3XX. The telephone number for general inquiries is: 028-9052-1532. The Committee's e-mail address is: firstname.lastname@example.org
TABLE OF CONTENTS
Our Principal Conclusions and Recommendations
Implementation of the Street Works (Northern Ireland) Order 1995
Progress made by Roads Service in setting up a Street Works Register
Effectiveness of the Roads Service Inspection Process
Quality of Reinstatement by Utilities
Extent to which Utilities are made to bear the full cost of Road Openings
Financial Audit Issues
Mr Nigel Hamilton, Accounting Officer, Department for Regional Development
Mr Robert Martin, Accounting Officer, Water Service
Dr Andrew Murray, Network Maintenance Manager, Roads Service
Mr David Orr, Divisional Road Manager/Belfast - (Acting), Roads Service
Mr Graham Frazer (Acting Chief Executive of Roads Service)
Mr John Mc Neill (Director of Finance, Roads Service)
Mr John Dowdall, Comptroller and Auditor General (C&AG)
Mr Brian Delaney, Deputy Treasury Officer of Accounts, Department of Finance and Personnel
THE PUBLIC ACCOUNTS COMMITTEE HAS AGREED TO THE FOLLOWING:
ROAD OPENINGS BY UTILITIES
1. The Public Accounts Committee met on 8 November 2001 to consider the Comptroller and Auditor General's report on "Road Openings by Utilities" (NIA 35, Session 2000-2001) and the Roads Service Agency Accounts 1999/2000 and 2000/2001. Our witnesses were:
2. The utilities which provide water, gas, electricity and telecommunications services in Northern Ireland have a statutory right to lay their equipment over, under or on the road network. In recent years this has resulted in many roads and footpaths being subjected to extensive trenching as new services were installed and existing ones repaired or replaced. During 2000 an estimated 46,000 road openings were carried out. This inevitably causes disruption to traffic and pedestrians. However under the Street Works (Northern Ireland) Order 1995 certain legal requirements have been placed on the utilities however, which are intended to minimise disruption and to ensure a high quality of reinstatement. Roads Service, which is an Executive Agency of the Department for Regional Development, is charged with the operation of this system of control. The C&AG's report examined Roads Service's performance in implementing the legislation.
3. In taking evidence, the Committee focussed on a number of issues raised in the C&AG's report. These were:
OUR PRINCIPAL CONCLUSIONS AND RECOMMENDATIONS ARE AS FOLLOWS
4.1 We welcome the fact that the Department now has most of the proposed codes of practice in place but are concerned that the delay may have resulted in a reduced level of control during a period when there was a dramatic increase in road openings.
Main report, paragraph 7.
4.2 We are concerned that where the utilities responsible for faulty reinstatements cannot be identified due to inadequate records, the cost of making good this damage may ultimately be borne by the taxpayer. We regard this as unacceptable. We recommend that where faulty reinstatements are discovered, Roads Service should make strenuous efforts to identify the utility responsible and to ensure that it carries out the necessary remedial works.
Main report, paragraph 10.
4.3 A robust and effective inspection process is vital to ensure that utilities carry out reinstatements to the required standard and we are pleased that Roads Service has now fully implemented the Inspection Code of Practice. We are disappointed, however, that it has taken so long and we are not convinced it could not have been done sooner, in the absence of a computerised register, as was the case in England and Wales. In our opinion, if full consideration had been given to the benefits of early implementation, Roads Service may have taken a different view.
Main report, paragraph 12.
4.4 We are pleased to see that Roads Service has introduced fees from January 2002 and recommend that it monitors the cost of inspection and the level of income to ensure that fees are set at an appropriate level to recover full costs.
Main report, paragraph 13.
4.5 The C&AG's report estimated that the delay in introducing the code had resulted in a loss of income of some £600,000 a year. We note the Department's views that it did not have sufficient staff to carry out an increased level of inspection but we consider that an extension of the inspection process could have contributed to a much-needed improvement in the quality of reinstatement. In our opinion, this matter should have been given much more consideration in the decision to delay implementation of the Inspection Code of Practice.
Main report, paragraph 14.
4.6 We note that Roads Service currently investigates all complaints but would ask it to review its procedures to ensure that it is making best use of them as a management tool and has satisfactory procedures for ensuring that they receive a response. We also consider that complaints should be positively encouraged as a source of information and would like Roads Service to consider promoting a road condition hotline with a freephone number which motorists and pedestrians could call to register concerns about road conditions.
Main report, paragraph 16.
4.7 Roads Service told us that it wants to move as quickly as possible to reduce the reinstatement failure rate to 10 per cent. It is important that demanding targets are set and we recommend that Roads Service should require action plans from utilities, as provided for under the Code of Practice, detailing how performance would be improved to meet the target within a reasonable timescale.
Main report, paragraph 18.
4.8 Water Service has a particularly poor record of reinstatement and must be expected to conform to best practice and be held fully accountable when it does not do so. We are encouraged by the Accounting Officer's recognition of this principle and by the assurances that reinstatement performance is improving. We would like the Audit Office to keep us informed of Water Service's performance against its standard of service targets.
Main report, paragraph 19.
4.9 We recommend that Roads Service establish a statistically based approach to coring, to ensure that it gives an accurate reflection of the level of performance on the quality of reinstatement.
Main report, paragraph 20.
4.10 The Department told us that it is now in a position to produce better management information and intends to publish the results of performance measurement. This is a welcome development and we recommend that performance measurement should include a comparison with performance in Great Britain and should cover the full range of key indicators listed in the C&AG's report.
Main report, paragraph 21.
4.11 We drew the Accounting Officer's attention to examples of quality paving having been replaced by tarmacadam which we find totally unacceptable. We welcome his assurance that cases brought to the attention of Roads Service offices would be investigated but we emphasised that local offices should ensure that reinstatements are carried out to the proper standard first time.
Main report, paragraph 22.
4.12 We gave examples of unco-ordinated activity by Roads Service, Water Service and other utilities which had been extremely disruptive. We welcome the Accounting Officer's assurance that lessons have been learned on this.
Main report, paragraph 23.
4.13 We were told that, even if reinstatement is carried out to the required standard, opening a road inevitably weakens the structure. This damage is a factor in about £10 million worth of maintenance work each year. We recommend that the Department should explore the possibility of utilities making voluntary contributions towards additional maintenance costs. If voluntary agreement cannot be reached, consideration should be given to making enabling regulations under Article 38 of the 1995 Order. We understand the political dimension to this issue but given the fact that Roads Service's maintenance budget is already stretched to breaking point, we believe that action is required urgently to ensure that the taxpayer does not continue to subsidise the activities of the private sector.
Main report, paragraph 25.
4.14 We noted from the national press, that some local authorities in Great Britain are fining companies £2,000 a day for every day they go beyond an agreed deadline for completion of road works. Another authority is charging £500 a day for the duration of roadworks. We recommend that the Department gives consideration to the introduction of fines or charges of this kind in Northern Ireland as a means of recovering some of the cost of damage and to provide an incentive to complete works more quickly.
Main report, paragraph 26.
4.15 We expect the Department to make every effort to lift the qualification on the Roads Service's Accounts on a time scale agreed with the Northern Ireland Audit Office.
Main report, paragraph 29.
4.16 We welcome the establishment of an Infrastructure Evaluation Group to oversee consultants and the development by this Group of further quality assurance checks and tests of their work.
Main report, paragraph 31.
4.17 We were pleased to note the establishment of the Compliance Audit Team to redress the issues raised in the Comptroller and Auditor General's report and the steps taken to make Roads Service staff aware of financial accountability when dealing with public money.
Main report, paragraph 33.
5.1. We strongly welcome the Accounting Officer's positive response to the C&AG's report and are encouraged by the action which the Department and Roads Service have since taken to ensure that there is an improvement in the performance of utilities. It is important for both Roads Service and the utilities to realise, however, that road users may view the Accounting Officer's assurances with some scepticism. Members are aware from their post-bag and examples in their own locality, of instances of poor co-ordination of activities by utilities and cases which are not being dealt with as promptly as they should be. There is still enormous scope for improvement and the people of Northern Ireland have had to tolerate a poor service for too long. Where performance targets are set, these should be demanding and we expect to see significant improvements in the short term. If this is not achieved, more radical action may be necessary and one of the items we would expect the Department to have on its agenda would be to review the statutory right of utilities to open roads. If the conflict, which seems to have existed up to now, between the interests of taxpayers and the rights of utilities to open roads is not resolved satisfactorily, then in our view, the rights of taxpayers must be given priority.
5.2. There is absolutely no doubt in our mind that the inadequate regime operated by Roads Service has benefited the utilities and their shareholders at the expense of the taxpayer. It is all the more reprehensible that this has occurred in an area of infrastructure such as roads which claims that many of its current problems are because it has been chronically underfunded for years. We appreciate that these problems have their roots pre-devolution. However, departments cannot expect the Assembly to look sympathetically on claims of underfunding if they are seen to have failed over a long period, to manage their assets sensibly and to maximise their opportunities for raising revenue or passing on costs which properly lie with the utilities.
IMPLEMENTATION OF THE STREET WORKS (NORTHERN IRELAND) ORDER 1995
6. In 1995, new legislation was introduced which was intended to give Roads Service powers to co-ordinate street works. It was also intended to commit water, gas, electricity and telecommunications utilities to minimising disruption resulting from road openings and to ensuring that they reinstated roads to a high standard. The Street Works (Northern Ireland) Order 1995 set a broad framework for control and matters of detail were to be dealt with by Codes of Practice to be agreed with utilities. Six codes were identified: Diversionary Works; Reinstatement; Inspections; Co-ordination; Safety; and Records. The C&AG's report pointed out, however, that over five years after the legislation came into force, only two Codes of Practice had been introduced. This was in contrast to the position in Great Britain, where five Codes of Practice were implemented within two years of the corresponding legislation being introduced.
C&AG's report paragraphs 1.1-1.5.
7. The Department told us that since the publication of the C&AG's Report, two further codes on Co-ordination and Inspection had been introduced and all codes, with the exception of the Records code, would have statutory effect by February 2002. The Department recognised that there had been delay in introducing these codes, but cited two mitigating factors. Firstly, the need for a computerised street works register, which came into effect in September 2000, and secondly, the desire to benefit from a review of the Codes of Practice as applied in Great Britain. We welcome the fact that the Department now has most of the proposed codes of practice in place but are concerned that the delay may have resulted in a reduced level of control during a period when there was a dramatic increase in road openings.
Minutes of Evidence, paras 6-8.
PROGRESS MADE BY ROADS SERVICE IN SETTING UP A STREET WORKS REGISTER
8. The operation of a comprehensive street works register is a requirement of the 1995 Order and was essential to allow Roads Service to co-ordinate and control road openings and to inspect reinstatements. Roads Service started planning for a computerised register in 1994, but the C&AG's report indicated that the Northern Ireland Streetworks Register and Notification System (NISRANS) was only being piloted in August 2000, some six years later. The Department had originally intended to use the system being designed in England and Wales which was initiated in 1991, but it had withdrawn from this project in 1994, when it became apparent that there were problems with the system. Procurement of NISRANS began in 1997, but the appointed contractor withdrew in 1999, causing further delay. The Department assured us that NISRANS was now operational in all areas of Northern Ireland and that the system fully meets the requirements of the 1995 Order. Further enhancements are planned for March 2002 which will assist in the production of the management information recommended in the C&AG's report. These additional features are intended to assist Roads Service in following up defects, identifying trends and identifying particular areas or utilities where action is required.
C&AG's report paragraphs 2.6-2.11 and Minutes of Evidence, paras 50-51,152, 168-171.
9. We asked the Department whether the lack of a fully functioning streetworks register prior to 2000 would mean that Roads Service would have difficulty in identifying and taking action against utilities which had carried out faulty reinstatements during this period. The Department recognised that the systems in place prior to the introduction of NISRANS were less than effective. However, it assured us that whilst it was more difficult to identify who had caused a road opening carried out prior to the introduction of the new system, experienced engineers inspecting a reinstatement could generally identify which utility was responsible, even without the back up documentation.
Minutes of Evidence, paras 175-182.
10. The existence of a comprehensive record of streetworks is the key requirement to the exercise of proper control over road openings by utilities. We welcome the fact that Roads Service now has a fully functioning register. There were some 140,000 major road openings between 1997 and 2000 when the Department, by its own admission, had an information system which was neither good nor effective. Roads Service coring samples indicate that reinstatements carried out during this period were of a poor quality and we are concerned that where the utilities responsible for faulty reinstatements cannot be identified due to inadequate records, the cost of making good this damage may ultimately be borne by the taxpayer. We regard this as unacceptable. We are somewhat reassured by Roads Service's confidence that engineers can identify the utility responsible for a particular road opening even where records are incomplete. We are sceptical, however, as to whether utilities will accept responsibility, where this cannot be independently verified. Nevertheless, we recommend that where faulty reinstatements are discovered, Roads Service should make strenuous efforts to identify the utility responsible and to ensure that it carries out the necessary remedial works.
C&AG's report paragraphs 2.4 and 5.20.
EFFECTIVENESS OF THE ROADS SERVICE INSPECTION PROCESS
11. A key provision of the 1995 Order is that Roads Service should inspect utilities' reinstatement work to ensure that it is carried out to the prescribed standards. When the C&AG reported in February 2001, Roads Service had not implemented an Inspection Code of Practice. Its inspection process was inadequately staffed and consequently, utilities had little incentive to carry out adequate reinstatement.
C&AG's report paragraphs 4.2 and 4.17.
12. Roads Service introduced the Inspection Code of Practice shortly after publication of the C&AG's report. We were told that implementation had been delayed until the computerised streetworks register was in place because the code could not be fully implemented without it. We noted, however, that an inspection code had been introduced in England and Wales without the benefit of a computerised register and the C&AG reported that he found no evidence that the benefits of delaying implementation had been properly assessed. On questioning the Department on this point we were unclear as to how, or indeed if, a decision not to implement the code had been taken. We were told that the Streetworks Advisory Group frequently considered implementation and that feedback from Great Britain suggested that it would be foolhardy to try to introduce the code before NISRANS was up and running. We were also told that the decision not to introduce the Code of Practice was "not a decision as such" because a computerised system was simply a necessary precursor to the code. A robust and effective inspection process is vital to ensure that utilities carry out reinstatements to the required standard and we are pleased that Roads Service has now fully implemented the Inspection Code of Practice. We are disappointed, however, that it has taken so long and we are not convinced it could not have been done sooner, in the absence of a computerised register, as was the case in England and Wales. In our opinion, if full consideration had been given to the benefits of early implementation, Roads Service may have taken a different view.
C&AG's report paragraph 4.12 and Minutes of Evidence, paras 183-187, 196-199 and 204.
13. One of the major advantages of the Inspection Code of Practice is that it allowed Roads Service to charge utilities a fee for each inspection carried out. This is important because it ensures that the cost of the inspection process is borne by the utilities and not the taxpayer. We are pleased to see that Roads Service has introduced fees from January 2002 and recommend that it monitors the cost of inspection and the level of income to ensure that fees are set at an appropriate level to recover full costs.
14. The C&AG's report estimated that the delay in introducing the code had resulted in a loss of income of some £600,000 a year. However, the Department took the view that it had not had sufficient staff to carry out this level of inspections and if more staff had been employed, the £600,000 would only have been enough to cover the cost of additional inspection. Nevertheless, we consider that there has been a significant loss to the public purse and at the very least, the income generated would have covered the cost of the existing inspection regime. An extension of the inspection process could have contributed to a much-needed improvement in the quality of reinstatement. In our opinion, this matter should have been given much more consideration in the decision to delay implementation of the Inspection Code of Practice.
C&AG's Report, paragraphs 4.13-4.14 and Minutes of Evidence, paras 59-60, 190 and 209-214.
15. The C&AG's report highlighted the fact that there was inconsistency in the approach to inspection applied at different section offices within Roads Service. We are pleased to note that guidance has recently been issued covering the level of routine inspections to be undertaken and instructing that the frequency of inspections should be increased in relation to contractors or utilities where a problem had been identified. We also note that NISRANS is being used to generate the sample and to record the results of inspection.
C&AG's report paragraphs 5.4-5.6 and Minutes of Evidence, paras 220-227.
16. Given the high cost of the inspection, we consider that information supplied by the public in the form of complaints is a potentially valuable source of management information which should be used constructively to compliment the inspection process. We note that Roads Service currently investigates all complaints but would ask it to review its procedures to ensure that it is making best use of them as a management tool and has satisfactory procedures for ensuring that they receive a response. We also consider that complaints should be positively encouraged as a source of information and would like Roads Service to consider promoting a road condition hotline with a freephone number which motorists and pedestrians could call to register concerns about road conditions.
Minutes of Evidence, paras 77 -79.
QUALITY OF REINSTATEMENT BY UTILITIES
17. The 1995 Order requires that where a utility carries out road openings, it should reinstate the road to a satisfactory standard as prescribed in the Reinstatement Code of Practice. The Department told us that it regards this as the most important code of practice and whilst it had only come into legal effect in February 1999, utilities had, for the most part, been operating it on a voluntary basis prior to that date. The C&AG has reported, however, that between 1996 and 2000, the standard of reinstatement had deteriorated rather than improved, with 44 per cent of reinstatements failing to meet the required standard in 2000. Roads Service told us that performance has improved somewhat recently, with coring results indicating a failure rate of 35 per cent but they consider that this needs to be improved further and want to move as quickly as possible to a failure rate of 10 per cent. We asked what action would be taken to achieve this level of performance and were told that all defects would be notified to the utility concerned and the Accounting Officer will now receive six monthly reports on the performance of each utility. Where these indicate issues to be addressed, he will take them up personally with the Chief Executive of the utility concerned. In addition, standard of service targets will be set and these will be published, together with performance data, in the Annual Reports of Roads Service and Water Service.
18. It is important that these targets are demanding because a very significant improvement is required. The quality of reinstatement being carried out by utilities is unacceptable and Roads Service has clearly not done enough to retrieve the situation. We would like to be informed when these targets are set. Roads Service has emphasised the level of co-operation with the utilities, particularly in the period before the reinstatement code was implemented. We recognise that such co-operation is necessary and commend it, but the poor quality of reinstatement achieved clearly indicates that co-operation is no substitute for an effective legal framework. We recommend, therefore, that in conjunction with the proposed targets, Roads Service should require action plans from utilities, as provided for under the Code of Practice, detailing how performance will be improved to meet the ultimate 10 per cent target, within a reasonable timescale.
C&AG's report paragraphs 5.19 - 5.20 and Minutes of Evidence, paras 18, 87-92 and 101-102.
19. Water Service has a particularly poor record of reinstatement, with failure rates as high as 67 per cent and widespread failure to notify road openings to Roads Service. It was also drawn to our attention in the form of a joint submission from the private sector utilities, that whereas Roads Service is taking legal action against several private sector companies, Water Service has Crown Immunity and cannot be prosecuted. It would appear, therefore, that Water Service is under less pressure than other utilities to comply with the legislative requirements. The Accounting Officer conceded that Water Service's record had been poor, but stated that Crown Immunity should in no sense allow it to be treated differently from any other utility. He assured us that Water Service will be required to comply with the 1995 Order and the associated Codes of Practice and will be subject to the same monitoring and reporting regime as other utilities. We were told that there had been a "sea change" in Water Service's attitude in recent years, with improvements in reinstatement performance and a new willingness to co-operate with Roads Service. We recognise the constraints which Crown Immunity imposes, but as we have emphasised before, in the context of the control of river pollution, the real issue is that Water Service must be expected to conform to best practice and be held fully accountable when it does not do so. We are encouraged by the Accounting Officer's recognition of this principle and by the assurances that reinstatement performance is improving. We would like the Audit Office to keep us informed of Water Service's performance against its standard of service targets.
C&AG's report paragraphs 2.12, 5.13, Appendix 2 and Minutes of Evidence, paras 103-108 and 118.
20. Roads Service's assessment of the overall quality of reinstatement is based on the results of a small sample of some 240 cores which is not statistically based. We are not convinced by Roads Service's explanation of its approach to the selection of this sample, that it is acceptable as a measure of the quality of reinstatement of some 46,000 road openings. The results of coring samples will be used to measure reinstatement performance against targets set by Roads Service. It is essential, therefore, that it gives an accurate and representative picture of the quality of reinstatement carried out by each of the utilities. We recommend that Roads Service establish a statistically based approach to coring, to ensure that it gives an accurate reflection of the level of performance.
C&AG's report paragraph 5.19 and Minutes of Evidence, paras 132-134.
21. The C&AG's report highlighted the lack of basic management information and performance indicators which could be used to assess the performance of both Roads Service and utilities. The Department told us that it is now in a position to produce this information using the NISRANS system and that it intended to publish the results of performance measurement. We welcome this development and recommend that performance measurement should include a comparison with performance in Great Britain and should cover the full range of key indicators listed in the C&AG's report.
C&AG's report paragraphs 5.15, 5.29 and Minutes of Evidence, paras 149-154.
22. We drew the Accounting Officer's attention to examples of faulty reinstatement where high quality paving in town centres had been replaced by tarmacadam. Elaborate paving schemes have been carried out at great expense to enhance town centres and contribute to social and economic regeneration and we regard it as unacceptable that utilities should be allowed to vandalise public property in this way. The reinstatement code of practice requires utilities to reinstate high-amenity surfaces to their original standard and Roads Service suggested that the use of tarmac in these cases might be temporary, pending proper repair. We were told that local Roads Service offices would investigate cases of this nature if they were informed. We welcome this, but we would emphasise to Roads Service that local offices should ensure that reinstatements are carried out to the proper standard first time.
Minutes of Evidence, paras 143-147
23. We were also aware of examples of multiple action by Roads Service, Water Service and other utilities, which were extremely disruptive in towns such as Larne. We pressed the Accounting Officer for an assurance that uncoordinated action on this scale would not happen again and welcome his assurance that lessons have been learned.
Minutes of Evidence, paras 109-116.
EXTENT TO WHICH UTILITIES ARE MADE TO BEAR THE FULL COST OF ROAD OPENINGS
24. Utilities have a statutory right to open public roads and footpaths to install their equipment and to access it for the purposes of repair and renewal. This facility has to be reconciled with the interests of road users and Roads Service which has a duty to maintain a public asset worth some £17 billion. One of the objectives of the Street Works (Northern Ireland) Order 1995 was to ensure that the cost of road openings is borne by the utilities rather than the taxpayer, primarily by requiring utilities to reinstate roads to an appropriate standard. The C&AG has reported however, that Roads Service is spending £10 million a year making good damage caused by road openings.
C&AG's report paragraphs 5.30-5.33 .
25. We asked the Department what steps it was taking to make utilities contribute to the cost of this long-term damage. We were told that, even if reinstatement is carried out to the required standard, opening a road inevitably weakens the structure and means that resurfacing will be required at an earlier date. Roads Service agrees that the presence of old utility workings is a factor in £10 million worth of maintenance work each year, but pointed out that no road authority in Great Britain has the power to recover the cost of this long-term damage. Giving such power to the Department would be a political decision and the Accounting Officer stated that if the current strategy of co-operation and reinstatement does not prove successful, the Minister may consider obtaining additional powers from the Assembly to recover costs or require the utilities to do more. The Department has stated clearly that long-term damage to the road network is inevitable even if utilities improve the quality of reinstatement beyond what is currently being achieved. We are not convinced, therefore, that the current reinstatement strategy can significantly reduce the £10 million annual maintenance bill currently borne by Roads Service. We recommend that, in the spirit of co-operation which the Department has advocated, it should explore the possibility of utilities making voluntary contributions towards additional maintenance costs. Under Article 38 of the 1995 Order, the Department may make regulations requiring utilities to contribute to the cost of long-term damage and whilst we recognise that this power has not been exercised in Great Britain, we do not see this as a barrier to its introduction in Northern Ireland. We further recommend, therefore, that if a voluntary agreement cannot be reached, consideration should be given to making such regulations. We understand the political dimension to this issue but given the fact that Roads Service's maintenance budget is already stretched to breaking point, we believe that action is required urgently to ensure that the taxpayer does not continue to subsidise the activities of the private sector.
Minutes of Evidence, paras 122-130.
26. We noted from the national press, that some local authorities in Great Britain are fining companies £2,000 a day for every day they go beyond an agreed deadline for completion of road works. Another authority is charging £500 a day for the duration of road works. Roads Service is aware of these initiatives and is monitoring their outcome. We recommend that the Department gives consideration to the introduction of fines or charges of this kind in Northern Ireland as a means of recovering some of the cost of damage and to provide an incentive to complete works more quickly.
Minutes of Evidence, paras 62-71.
FINANCIAL AUDIT ISSUES
27. In addition to examining the control of road openings by utilities, the Committee questioned the Accounting Officer about a number of issues arising from the Comptroller and Auditor General's work on the Roads Service's accounts.
28. We cannot over-emphasise the importance the Committee attaches to having a proper evaluation of the roads network in the Agency's Balance Sheet. This is a major asset and it is important for management purposes that the Roads Service has as good a grip as possible on its value. This is an integral part of the Accounting Officer's role in safeguarding assets.
29. We expect the Department to make every effort to lift the qualification on the Roads Service's Accounts on a time scale agreed with the Northern Ireland Office.
Project Management of Consultants
30. It is disappointing to find that consultants employed to assist the Department in the evaluation of the roads network were poorly managed. While we acknowledge that the Department needs to employ consultants from time to time, it is essential that when they are used they are supervised closely so that the Department receives a satisfactory service from them.
31. We welcome the establishment of an Infrastructure Evaluation Group to oversee consultants and the development by this Group of further quality assurance checks and tests of their work.
Payments to External Contractors
32. We were concerned that inadequate documentation existed in the Department to support payments made to external contractors for the repair and maintenance of roads. We want to emphasise that it is essential that documentation is properly maintained by the Department to provide evidence that payments have been made correctly.
33. We were pleased to note the establishment of the Compliance Audit Team to redress the issues raised in the Comptroller and Auditor General's report and the steps taken to make Roads Service staff aware of financial accountability when dealing with public money.
PROCEEDINGS OF THE COMMITTEE
Members Present: Mr B Bell (Chairperson)
Mr John Dowdall, Comptroller and Auditor General (C&AG) was examined
Mr Brian Delaney, Deputy Treasury Officer of Accounts was examined.
The Comptroller and Auditor General's report on "Road Openings by Utilities" (NIA 35, Session 2000-2001) together with the Roads Service Agency Accounts 1999-2000 and 2000-2001 were considered.
Mr Nigel Hamilton, Permanent Secretary of the Department for Regional Development, Mr Graham Fraser, Acting Chief Executive of the Roads Service, Mr Robert Martin, Chief Executive of the Water Service, Mr John McNeill, Director of Finance of the Roads Service, Dr Andrew Murray, the Network Maintenance Manager, Roads Service, Eastern Division, and Mr David Orr, Divisional Manager (Eastern) of the Roads Service and Acting Director of Customer & Network Services were examined
[Adjourned until Wednesday 21st November at 10:30am]
* * * *
PROCEEDINGS OF THE COMMITTEE
Mr John Dowdall, Comptroller and Auditor General (C&AG) was further examined
Draft Report (Road Openings by Utilities) proposed by the Chairman, brought up and read.
Ordered, That the draft Report be read a second time, paragraph by paragraph.
Para 1 read and agreed to
Para 2 read and agreed to subject to amendment
Para 3 read and agreed to
Paras 4.1 to 5.2 postponed
Paras 6 to 18 read and agreed to
Para 19 read and agreed to subject to amendment
Paras 20 to 33 read and agreed to
Paras 4.1 to 5.2 read and agreed to subject to changes made to reflect amendments agreed in Main Report
[Meeting adjourned until Wednesday 24th April 2002 at 10:30am]
* * * *
Thursday 8 November 2001
Mr J Dowdall ) Northern Ireland Audit Office
The Chairperson: You are very welcome, Mr Hamilton, as are your colleagues, Mr Martin, chief executive of Water Service, and Mr Orr and Dr Murray from Roads Service. Also present are Mr Delaney, from the Department of Finance and Personnel, and Mr Dowdall, from the Northern Ireland Audit Office.
Before we start, I want to say that I and, I am sure, all the Committee members, are pleased that we are back in business again after all the upheaval that we have had. We are now back again to deal with the real political issues that concern people.
I have to say that delays and the damage to our roads that are caused by road openings by utilities are issues that have attracted a lot of attention, both from the public and from the media. I welcome the fact that the BBC's consumer programme, 'Fair Play' - I am sure that you will be pleased to hear this, Mr Hamilton - is dealing with the issue in its programme next Monday night.
Turning to the business in hand, I want to ask a couple of questions. The Street Works (Northern Ireland) Order 1995 placed the emphasis on utilities having to work to agreed codes of practice. According to paragraph 1.5 of the Northern Ireland Audit Office report, 'Road Openings by Utilities', in GB five codes were introduced within two years of the primary legislation. However, when the Comptroller and Auditor General reported on the situation in Northern Ireland six years after that, Roads Service had only managed to introduce two codes of practice. Why has it taken so much longer in Northern Ireland, especially when you had the experience of GB to draw on? What is the timetable for the implementation of any outstanding codes of practice?
Mr N Hamilton: I would like to make two introductory comments before I answer your questions specifically. The first one is that, so far as we are concerned, this is a very important report that has galvanised the work of the Department, in particular in its relations with utilities. That is not least because the roads network is a very essential conduit for gas, energy, water and electricity supplies. In that context, I want to assure the Committee that we believe that we have made significant progress in five or six areas since the publication of the Audit Office report. I am sure that we will return to those, but they include things like a computerised register, the performance of Water Service, et cetera.
In relation to the codes of practice, we did have two codes in operation in 1998 and 1999. Two further codes - the codes of practice on co-ordination and inspection - will actually become law in January 2002. Both of those have been published after consultation with the utilities, one in May 2001 and one in February 2001. The utilities and Roads Service are actually working to those codes, although they will not have statutory effect until January 2002.
A further code that will also be introduced in February 2002 will be an update of the code on safety at roadworks. We have had a code in place since April 1997, but this is a co-ordinated, updated code applying in England, Wales, Scotland and Northern Ireland. So, by February at the latest all the codes will in fact be fully in place with statutory support. There is one further code, on records, which is currently being considered in Great Britain but has not yet been introduced there. We will be doing that at the same time as they introduce it.
The Department recognises that there has been delay in doing this. We believe that there have been several mitigating factors. The first is that we really needed to have a computerised street works register, and that came into play in Northern Ireland in September 2000. We thought it important to have that register in place before we proceeded with these further codes on a statutory basis.
The Chairperson: Before that you were unable to tell who did what or when, is that right?
Mr N Hamilton: Before that computerised register was put in place, it would be fair to say that in terms of notification of works, for example, there were up to 100,000 pieces of paper moving around on a manual basis. It was very difficult to manage. Roads Service recognised that and, indeed, the utilities recognised that, and that is why we thought it very important to have the computerised street works system in place.
The second thing we did - as you said yourself, Mr Chairman - was to learn the benefit of what was happening in Great Britain. I understand from my reading and from reading the papers that, in fact, although the codes were quickly introduced in GB, there have been a number of major concerns on the part of the utilities there. They are under review, and we believe that our codes are much more relevant and practical in terms of their application by utilities.
The Chairperson: Are there any other codes that would apply to Northern Ireland that you intend to initiate?
Mr Orr: The one remaining code is the records code of practice, which is being considered in GB at the moment. There are a number of difficulties with it, not least the fact that it would require all the utilities to give each other the details of the exact locations of their plant and equipment. That has commercial confidentiality implications. The situation in Northern Ireland at the moment is that, before any utility opens the road, it checks the location of every other utility's plant in an effort to avoid damage and disruption. The records code of practice is under consideration in the UK, but it is far from being agreed.
The Chairperson: I take your point, but does Roads Service not have a record of all this itself?
Mr Orr: No. The utilities have a statutory right to place their equipment in the road. As you can understand, their networks have been built up over many years. In some cases, their records are less than accurate, but the responsibility has always been on the utilities to maintain the records of their own plant within the public road network, rather than on the roads authority.
The Chairperson: OK. I am not sure whether those answers adequately address my question, but it is useful to have them.
Ms Ramsey: Paragraph 1.12 of the report tells us that Roads Service said that it could not consider measures proposed in England to minimise disruption caused by utilities until the full impact of the 1995 Order had been assessed. Mr Hamilton said earlier that Roads Service will be learning the benefits of what is happening in England. Given that most of the codes of practice identified in the 1995 Order have not yet been implemented, how much longer are we going to have to wait for this assessment and for the appropriate measures to be introduced?
Mr N Hamilton: What I said was that by January and February all the codes of practice, apart from the records one, would have a statutory basis. In fact, I also said - and I apologise if I was not clear - that all the codes were already being implemented, on a voluntary basis, by the utilities and by Roads Service.
Mr Orr: The most important code of practice, in my view, is the one on reinstatement, which governs the quality of reinstatements. It came into legal effect in Northern Ireland in February 1999. However, prior to that the various utilities had, for the most part, been operating it on a voluntary basis. Similarly, the diversionary works code of practice, which I can explain if you wish, came into effect in June 1998. The two codes that are coming into effect early next year are to do with co-ordination and inspection, but, as you may know, our computerised notification system has been in operation for over a year. All the utilities are co-operating with that, so in a sense those codes of practice are already operating, even though they do not have the full force of law at present.
Ms Ramsey: So by February 2002 all the codes of practice will have been implemented?
Mr N Hamilton: They will all have been implemented on a statutory basis.
Mr Orr: Except one.
Mr N Hamilton: Apart from the records code.
Ms Ramsey: By February 2002?
Mr N Hamilton;
Yes, by February.
Ms Ramsey: Right.
In paragraph 2.4 we are told that between 1992 and 2000, there was an increase in road openings made by utilities from 18,000 to 43,000. Do you agree that Roads Service has missed the boat by not having a proper system of control in place to deal with that increased activity? We all witness the damage that has been done to the road network on a daily basis. The public purse will have to foot the bill for that in years to come.
Mr N Hamilton: We did not have our computerised system working until September 2000. However, as Mr Orr said, we worked closely with the utilities over that period, running a manual system of record keeping, and also checking and trying to ensure that standards were enforced. The codes and the legislation were not introduced as early as they might have been. However, we want to assure the Committee that considerable progress has been made across a number of areas due to the co-operation we have with the utilities.
It is the statutory responsibility of the utilities to open the road and to ensure that the road is reinstated to acceptable standards. If it is not reinstated to reasonable standards, then the Department, after inspection, requires that reinstatement to be undertaken again. Our experience of the last few months has shown us that significant improvements have been made in the quality of reinstatements.
The Chairperson: Will it cost £10 million to fix it?
Mr N Hamilton: Our intention is to ensure that the quality of reinstatements is such that any additional costs to the public purse are minimal. The advice from my engineering colleagues is that any trenches or holes dug in the road will inevitably impact on the structure of the road in the long term. We are seeking, with the co-operation of the utilities, to ensure that the best possible reinstatements are made as quickly as possible in order to preserve and protect the road surface.
Dr Murray: The large increase in street works in Northern Ireland is due to companies such as telecommunications and gas companies coming in to install new networks. Those new companies operated within the spirit of the GB legislation from day one. All of the new-build works throughout Northern Ireland have been being carried out in accordance with the GB codes of practice, before the Northern Ireland codes of practice came into effect.
Ms Ramsey: One of the codes of practice is supposed to minimise disruption to traffic. I remain to be convinced that companies who dig up the roads, for whatever reason, go out of their way to minimise disruption of traffic. It is only when they are contacted that they put up temporary traffic lights.
Paragraph 2.17 of the report says that the cost of traffic and public disruption in England and Wales is estimated at £2 billion a year. Has any assessment been carried out of the cost of disruption here?
Mr N Hamilton: We have not done a detailed assessment of the cost of disruption because it is a particularly difficult and complex matter, and we do not have the background records. However, I can assure the Committee that in relation to the recommendation about the views of the public on the utilities, the attitudes survey which the Northern Ireland Statistical and Research Agency undertakes every year will include for the first time this year two specific questions. One will be in relation to temporary road signs and the other in relation to the inconvenience of the work. We will then have proper statistical analysis of the views of road users through the attitudes survey. We understand that that could be available before Christmas.
Ms Ramsey: I would appreciate a copy of that.
The Chairperson: Can we have a copy?
Mr N Hamilton: Certainly. When the survey results are available we will immediately give you a copy. I understand that it is under way at the moment.
The Chairperson: Before I call Jane Morrice, I have a question for Dr Murray. You said that all new road openings have been conducted under the new codes. Are you therefore saying that you have no problems with them?
Dr Murray: No. The codes introduce more satisfactory means for Roads Service to control and oversee the works of utilities, but they certainly do not do away with all the problems.
The Chairperson: That is just the point that I wanted to clear up; you are not saying that it is going to improve them.
Mr N Hamilton: We do not pretend that we are where we wish to be. We believe that there have been improvements, and we can give you some facts later in the hearing, but we still believe that considerable improvements can be made.
The Chairperson: You can let us have anything of that sort in writing.
Ms Morrice: I want to make two points on the comments so far. First, you talk about an attitude survey. I suggest that you do not need a survey to guess the general public's attitude to the behaviour of utilities in matters such as roadworks. As representatives, we get complaints all the time from people about the disruption caused by roadworks. The Bangor-Belfast road is just one example. I should love to know from your statistics how many times in the past four months that road has been dug up, and what disruption has been caused. An attitude survey may only prove the point.
Secondly, you were talking about the fact that the roads were being dug up for new telecommunications and a new modernised system, but computers have been in vogue since the 1980s. Did the telecommunications never reach your offices? Can it be true that you have only had computers for a year? Why are we so far behind the times in computerising the system?
Mr N Hamilton: In response to the first question, I can say that it was a Northern Ireland Audit Office recommendation that we carry out an attitude survey. I wish to assure the Committee that we took that seriously.
The second issue is a matter for the telecommunications utility itself, in the sense that when it wishes to come -
Ms Morrice: The point I was making referred to your own services and why they were not computerised when such technology became available.
Mr N Hamilton: Sorry. I shall comment specifically on that. We completely accept the view of the Northern Ireland Audit Office that we need a computerised system. We had originally hoped that we would eventually be able to plug into the system being designed in England and Wales, initiated in 1991. As it turned out, that system was abandoned in England in 1997 at a cost to the public purse of £42 million.
In one sense, we heaved a sigh of relief, since we had exited the scheme in 1994. Had we been locked into it, our contribution to that loss would have been around £1 million. In 1994 we began planning for our own system, and design of the Northern Ireland Streetworks Register and Notification System (NISRANS), as it is now called, started in 1995. Procurement began in 1997 and we appointed a contractor in March 1998 to undertake the work, but unfortunately the contractor withdrew in November 1999. So, between 1991 and 1999 there were two abortive attempts to get a system up and running.
The Committee might also like to know that in England and Wales there is currently no computerised system. They have an Internet facility which is not fully integrated and still includes paper and fax. We introduced the Northern Ireland system in March 2000, and it has been running very effectively since. There are 49 terminals in the system in every section in the offices of Roads Service, Water Service and all the utilities. That system is proving most effective in building up our computerised streetworks register. The 46,000 road openings this year have been notified to it.
Finally, we are currently considering a tender for an enhancement of that system that, we hope, will go live in March 2002. It will not only record information, but will also enable us to produce a number of reports on utilities and areas. We hope to include as many of the indicators listed in appendix 3 of the Audit Office report as we can in regard to a reporting facility.
Ms Morrice: I want to move on to the issue of voluntary contributions. I understand from paragraph 4.14 that ntl and Phoenix Natural Gas paid voluntary contributions towards the cost of inspection. However, for some reason, this arrangement has ended. Why? Did you persuade other utilities to contribute in the same way?
Mr Orr: This relates to the inspection of utility works. When ntl and Phoenix came to Northern Ireland, we entered into a voluntary agreement with them, so that they would contribute towards our inspection costs. Over the period, they contributed in excess of £250,000 on a voluntary basis. The ntl network in Belfast is almost complete, and the arrangement has come to an end. It will be replaced by formal inspection fees, which are coming on stream early next year, as we have already indicated. That system, where there is a fee per inspection, required a computerised database. We were disappointed in the delay in the installation of the database, but we are pleased that it has been up and running now for over a year.
Ms Morrice: Did you try to get voluntary contributions from other utilities?
Mr Orr: The utility that makes the most openings is Water Service. If we had been receiving contributions from them, it would have been neutral to the public purse; it would have been a transfer between agencies.
Ms Morrice: They are the largest; what about the others?
Mr Orr: The others, such as NIE and BT, have complete networks. Theirs is a maintenance role. We did not arrange a voluntary agreement with them.
Mr N Hamilton: From January 2002, we will be introducing the new fee system on a statutory basis. There will be a charge of £15·50 for a sample inspection, and £31 for a joint inspection by Roads Service and the utility concerned.
Dr Murray: Another element of finance that we can recover from utilities is a cost for registering street works.
Ms Morrice: That is exactly the point that I was trying to make. I want to talk about creative thinking and best practice. In Great Britain, utilities are charged £2,000 if they overstay the time allowed, and they can also be charged £500 rent per day to dig the roads. Have you thought of doing that sort of thing here?
Dr Murray: There are two different issues here. In Great Britain, the regulations allow the highway authority to recover a fee every time an item of street works is registered. In Northern Ireland, those regulations have not yet come into force.
Ms Morrice: Have you recommended that they should?
Dr Murray: Yes. They are due to come into force shortly. However, when we set up NISRANS, we agreed with the utilities that that system would be jointly funded. The utilities and Roads Service have shared the costs of running NISRANS for the past year. The utilities pay half those costs; that has been done on a voluntary basis.
Ms Morrice: Will rent and fines be charged after a certain time?
Dr Murray: That is a different point.
Mr Orr: New primary legislation in GB in 2000 introduced a lane rental facility - I think that is what Ms Morrice is referring to. Some authorities in GB now make use of those powers, but they do so in a way that allows them to fine the utility if the road works last longer than the utility originally said it would. There have been difficulties with that system in England, mainly due to the amount of bureaucracy involved in checking whether the utility gave an adequate timescale in the first place. There have been disputes about that, and about the ensuing fines.
In England, the Secretary of State for Transport, Local Government and the Regions granted powers in August 2001 to allow the Middlesborough and Camden authorities to charge for the total time that the utility occupies the road space. That system is preferable because it cuts out the arguments about how long the utility should have been there in the first place. That system is being tested in those two authorities.
There are some counter-arguments. For example, if utilities are to be charged for lane rental, is there a risk that they will try to cut corners and, perhaps, not compact the reinstatement just as adequately? In other words, will they try to get out more quickly? Another argument is that it is estimated that this would cost utility users about £50 to £60 a year per household. So there are arguments for and against, and we are closely watching the experiment in England.
Mr N Hamilton: We will closely monitor the outcome of that experiment, and there will be an evaluation of it. We do not have the legislative authority to carry out such an experiment yet, but we might return to that issue later.
Ms Morrice: In Hong Kong, they have wonderful ideas for managing this situation - they have boxes that can be easily opened and closed, into which all the lines run. There are fabulous examples of best practice elsewhere - why do we not move in that direction?
Dr Murray: It is partly dues to the complicated network of utility services already in our roads.
Ms Morrice: I am sure that that is the case in Hong Kong too.
Dr Murray: Hong Kong tends to rebuild a lot, and has a fast rebuilding cycle. That sort of opportunity does not exist in Northern Ireland. We simply could not move all our existing services and put them into those convenient boxes, although I would love to see that happen.
Mr N Hamilton: Co-ordination is important. Over the last 18 months, there have been many instances when utilities have worked in co-operation - for example, Roads Service and Water Service. That is one of the benefits of having a computerised system and of ensuring that the Roads Service forward programme is input into that system. For example, the Roads Service major works programme is input a year in advance so that utilities are aware which areas Roads Service will be resurfacing. Again, there have been examples of the utilities changing their timescales so that they can co-ordinate the work on the ground.
Ms Morrice: Do customer complaints and reports from public representatives form a constructive part of the inspection process? How long does it take the Department for Regional Development to respond to a complaint? Where are complaints input into the system, and how do you react to them?
Dr Murray: Our aim is to respond to written complaints from the public within 15 days. However, we respond faster to a written complaint about a utility, because some utility works take place quickly and workers are in and out of a site within a day or so.
We certainly follow up every single complaint about a utility. We bring it to the attention of the squad on the ground, and. the supervisor of the squad as well. If we are getting a lot of complaints about an individual utility we arrange a separate meeting with the management of that utility.
Ms Morrice: How long does it take to patch it up?
Dr Murray: It depends on the severity of the defect. If it is a safety defect, utilities are supposed to fix it within two hours. Other defects are not of a safety nature, and we simply advise the utility in that case that the work needs to be repaired and brought up to a proper standard. The important thing to remember is that when they replace any defective reinstatement, the guarantee period restarts, so there is actually an advantage for Roads Service.
The Chairperson: Your point on co-ordination is good news, because that has been part of the problem all along - there has been very little co-ordination in the past.
Mr Beggs: I welcome the news that you will be bringing in statutory support in January, and that the inspection and safety at road works, and improvements in the guidance notes has occurred. Does the publication of the Audit Office report in February, and your appearance here today, have something to do with that? When did these new guidance notes come out?
Mr N Hamilton: The guidance notes on one of the codes were published in February, and the second set of notes was published in May, so those were at an advanced stage. However, it would be foolish to deny that the involvement of the Audit Office has not spurred both the Department and the utilities in this as well.
Mr Orr: I reassure the Committee that I do not like utilities digging up my roads - I take a personal interest in my roads, and I do not like it. One of the features about the operation in Northern Ireland has been the degree of co-ordination between the utilities and ourselves, which I have to admit is high. I am pleased with the co-ordination at a high level between the utilities. That co-operation does not exist in GB, where the utilities and the road authorities are at each other's throats.
At the same time, we have to recognise that we live in a civilised society. The services our society needs - electricity, water, telecoms - run beneath the road, and there is almost as much traffic beneath the road as there is on top. The work of the Audit Office, this hearing today, and, indeed, the series of meetings that our Minister has undertaken with the chief executives of utilities in Northern Ireland have been tremendously helpful to Roads Service. This has raised the profile of this problem and focused the utilities' attention on the importance of this particular aspect, so I welcome it.
Mr Beggs: You are saying that there is a high level of co-operation, but the object of the 1995 Order was to put the onus on utilities to carry out the work and the reinstatement to prescribed standards. I would have expected the 1995 Order to have improved the standards of reinstatement. However, paragraph 5.20 of the report indicates that performance has actually deteriorated since 1996, with 44% of reinstatements failing to meet the prescribed standards. What has been the cost of this high level of co-operation, and who is benefiting?
I do not fully understand why quality has gone down. Why has there been a reduction in quality, and are all defective reinstatements being brought to the attention of the utilities concerned? To what extent is the follow-up action being taken to ensure that the necessary work is carried out?
Mr Orr: The answer is that quality is improving, but not as quickly as we would like. In the latest coring results, the pass rate was 65%. Let us contrast that with the situation in Scotland, where a recent coring survey found that the pass rate was about 22%. Therefore, we are slightly ahead of Scotland, although we are not as good as I would like us to be.
Mr Beggs: I welcome the fact that it shows some improvement. However, it also shows that 35% are failing, which is unacceptable.
Mr N Hamilton: We agree. We are concerned, and our target is to work with utilities so that quality reinstatement ensures that the 35% failure rate goes down. We want, as quickly as possible, a situation where 90% of all the coring is positive and passes.
Mr Beggs: The important point is that, if it is not carried out to the appropriate standards, the taxpayer ultimately pays for the necessary improvement. That means that other road safety matters cannot be dealt with, so it is important to eliminate the failure rate of one third.
Mr N Hamilton: The two biggest utilities are Water Service and Phoenix Natural Gas, and I had a most helpful meeting with the chief executive of Phoenix last week. One of the things that the Department will do - with the full support and agreement of the utilities - is publish performance and standards of service and targets, including those of Water Service. That information will be included in the annual reports of Roads Service and Water Service, and the issues will be in the public domain.
Mr Beggs: Paragraph 5.11 tells us that utilities have not been responding to notifications of defects. Has this situation improved since the publication of the Northern Ireland Audit Office report? What actions have you taken to demand action plans and target dates?
Dr Murray: There has been improvement. At one time, if a utility did not respond sufficiently quickly to a defect notice, Roads Service carried out a temporary repair. We ran into trouble because we had to recover the cost of the repairs from the utility, which was a bureaucratic process. It also meant that we were the last people to work on the area of road, so we could have been taking on public liability, and we did not want to expose the public purse to that.
We have changed tack in the last year and a half. When we notify a utility of a defect, we put them on notice that it is their responsibility to fix it on time. We have been monitoring the situation, and the results of the monitoring process are sent to the Northern Ireland Roads Authority and Utilities Committee (NIRAUC).
Mr Beggs: Paragraph 5.11 also states that one utility took no remedial action whatsoever, and the best-performing utility repaired only one third of its defects within the four-week timescale considered appropriate by Roads Service. Which utility took no remedial action?
Dr Murray: I am afraid that I do not have that level of detail.
Mr Beggs: Can you give the Committee the information in writing?
Dr Murray: Yes.
Mr Beggs: Will improvement notices be issued when people fail to meet the 90% standard set by the Department?
Mr N Hamilton: As the Committee may know, I have only been in this job for several months. One of the crucial things that we will be doing is developing our relationships and our management information systems so that, at section office level, divisional level and Northern Ireland level, there should be, and is, a good working relationship with the utilities. At each level, the nature of defects and outstanding issues will be raised with the respective utility. If there are common issues across Northern Ireland, they will be raised at Northern Ireland level. If there are continuing issues, I will take them up personally with the chief executive of the utility concerned
Mr Beggs: I am pleased to hear you say that. Paragraph 5.13 says that there is a particular problem with Water Service, and appendix 2 shows that in 1999-2000, 50% of Water Service reinstatements were not satisfactory - and it has been as high as 67%. There have also been problems with Water Service's failure to give required notification of road openings. Water Service seems to be particularly unco-operative. How can you expect private sector companies to perform in a helpful way when one of the public bodies does not?
Mr N Hamilton: Let me assure the Committee that as the accounting officer I have made it quite clear - and Mr Martin fully accepts this - that Water Service will comply with the conditions and the codes of practice that emerge from this. I concede that until recently the record was not good and I invite Mr Martin to comment on what is happening. However, I have set in train a reporting mechanism whereby Roads Service will report to me every six months on the performance of each utility, including Water Service.
We will also have independent validation of the work of Water Service, because Water Service's Crown immunity should in no sense allow it to be treated any differently from any other utility. This is a matter of public accountability; of ensuring that Water Service's record is in place. The information available to me shows that Water Service has improved considerably in the past year.
Mr Martin: Water Service is fully committed to complying with the codes and regulations. Our record has not been good, but we have many road openings. Last year we had 16,000 road openings, 98% of which were classified as either emergency or urgent. I believe that we operate NISRANS very effectively; there were 53,000 notifications by Water Service under that system.
I concede that Water Service's record was very poor in the past, but I can demonstrate that we have taken the issue in hand, particularly over the past two years. Since November 2000 we have, for the first time, required first-time final reinstatement on our major works. That means that before a contractor leaves a site his contract requires him to make final reinstatement on those works, which are cored for Water Service by an independent contractor whom we employ. Subject to the core results, the contractor is either paid or not paid for the reinstatement works. If the works are defective, he is required to rectify them before he is paid.
We carry out a vast number of temporary works because of the nature of our network of sewers and water mains all over Northern Ireland. We estimate that there are six million joints in our networks, and every one of them can leak or cause us trouble. Most of the 16,000 openings are temporary. We now require contractors who are doing those works to use bituminous materials to reinstate the works temporarily, and they must reinstate them permanently within 28 days. The code requires 60 days; we insist on 28. I am pleased to say that in one recent six-month period we scored an 80% pass rate for the 28-day target and an 85% pass rate for cores on major works. That is a vast improvement on the period covered in the report.
Mr Beggs: May I relate a horror story from Larne? New sewers were being installed throughout the town, and there were roadworks everywhere. On top of that, Phoenix Natural Gas was laying new gas pipes. As well as that, Roads Service was laying pavements in the town centre and introducing new works in the Broadway area in the centre of town. Roads Service then decided to introduce a new one-way system. Can you ensure me that such chaos will never be allowed to return? The people of Larne were being directed from one diversion sign to another. Will that ever happen again?
Mr Orr: It was a mistake with hindsight to embark on the environmental improvements that precipitated the one-way scheme on Broadway while Water Service was undertaking major sewerage renewal works. There was too much disruption, despite the fact that the Department for Regional Development had good consultative arrangements with the council and had set up working groups. A lesson has been learnt.
Mr N Hamilton: The computerised system ensures that each utility is aware in advance of when another utility is to move in.
Mr Beggs: You do not need a computer to work out the net result.
Mr N Hamilton: In the past 18 months there have been 45 instances on 35 water schemes where Water Service and Roads Service have worked together before work is finished on the roadside. Water Service and Roads Service have together laid something equivalent to 95 lane-kilometres with a sharing of costs. Roads Service and Water Service have worked together to resurface roads. Co-operation like that is important.
Mr Beggs: So what happened in Larne will never happen again?
Mr N Hamilton: That is our objective.
The Chairperson: I hope it will not happen in Lisburn either.
Mr Martin said that Water Service's record was poor, but that there had been improvements. Mr Orr said that he did not like people digging up roads and making a mess. I do not want to put you at each other's throats, Mr Orr, but do you see any improvement in Water Service?
Mr Orr: There has been a sea change in Water Service's attitude. There is co-ordination at chief executive level between Mr Martin and Mr James. There are regular meetings at divisional manager level. I attended one of a series of meetings with Trevor Haslett a few weeks ago. That co-operative attitude is being encouraged throughout the organisation. There has been a change in attitude and a willingness from Water Service to work with us to crack this problem.
Mr Dallat: I would be the last person to pour cold water on what we are being told. However, this morning I dealt with a constituency complaint regarding raw sewage that has been flowing over a man's garden for five years due to a long-standing dispute between Roads Service and Water Service.
I hope that these promises can be enacted immediately in my home town. However, they are too late for the pensioner who recently fell on a footpath that had been dug up by Water Service. It happened outside my constituency office. I reported it several times, but I did not get a response. The man fell, broke his glasses, and was taken to hospital. He did not need that to happen to him at 80 years of age. When I contacted Water Service, the customer service advisor was terribly co-operative - she told me that a compensation form was available. I do not think that that is acceptable.
We are being given a rosy picture this morning. I hope that it is sincere. Shooting the messenger, Mr Hamilton, is pointless. He is new to the job. I have no doubt, however, that he will fulfil the promises he has made today.
Much has been said about the statutory rights of the utilities, and we have heard a bit about the responsibilities that they might have - but not a lot. Can we try to balance the situation so that we do not have cops and robbers chasing each other to make sure that things happen? The Assembly is currently debating the Budget for next year - it is strapped for cash. There is not enough money for education and health, in particular, as well as for many other amenities. The railway between Ballymena and Derry is clapped out, and the Department for Regional Development is using £10 million per year on repair work that should be done by the utilities that dug the roads up.
To add insult to injury, Water Service has immunity from criminal prosecution. Clearly we cannot hold you responsible for 30 years of direct rule, but it is obvious that things were in a hell of a mess when you were overburdened by paperwork, understaffed, and without a clue about who owned the utilities. Now, with the introduction of the new computer system, we will have a bright new future. However, someone must be responsible for finding out what is under the roads, and the utilities must take responsibility for furnishing the Department for Regional Development with up-to-date details of everything that they have, whether it was installed this year, 10 years ago or 20 years ago.
Mr Orr: The Northern Ireland Audit Office report mentioned the figure of £10 million per year, and I would like to explain that. Roads Service estimated that figure and gave it to the Audit Office. The presence of old utility openings is a factor in the decision to resurface roads in about £10 million worth of work each year. It is not necessarily the case that the roads are badly reinstated, but opening a road inevitably weakens the structure.
As a roads engineer, I would be very pleased to receive an extra £10 million per year, but no road authority in the UK has the power to recover that sort of expenditure. Therefore, in a sense this is a political matter, and so a political decision must be taken on whether the Department is given the power to recover the money. That is not done in the rest of the UK, but there is always the possibility of introducing -
Mr Dallat: Can I stop you there? Surely, now that we have our own Parliament, there is the opportunity to initiate legislation for the benefit of the people of Northern Ireland that will allow the Department to recover the cost of the long-term damage caused by the utilities. There is also an opportunity to introduce regulations that will give the Department the authority to ensure that the public do not subsidise the activities of the private sector, which makes millions of pounds from digging up the roads which they are now asking the public to pay for.
Mr N Hamilton: Earlier, I said that the Minister has been quite clear in discussion that, if the strategy outlined today of co-operation and of ensuring defects are reinstated does not prove successful, he will - as the previous Minister has already indicated to the utilities - want to obtain additional legislative powers from the Assembly to recover costs, or to require the utilities to do more. Beyond that, there is the issue of future funding of roads, transport and so on. In the past three weeks, the Department has set up a new infrastructure funding division. The new division will be charged with looking at ways of raising more money from the private sector for a range of the Department's areas of responsibility, including, for example, consideration of developers' contributions, tolls, charges, and so on.
That is happening not least because the regional transportation strategy identifies a considerable backlog in maintenance. I know that the Committee has published a report on that. We are examining those policy initiatives necessary to increase private-sector contributions, with the express purpose of achieving and maintaining a quality road network as well as providing for other areas of transportation we need to fund, such as railways and buses.
Mr Dallat: Am I therefore to assume that you may well propose charging utilities for laying cables and pipes?
Mr N Hamilton: I cannot say what the Minister will propose, but those issues will certainly be on the agenda.
Mr Dallat: We have had the Assembly for three years now, and although we have not had the same Minister in your Department, surely it is time we had some proposals to relieve the public of the awful burden from your Department each year.
Perhaps I might ask you again about reinstatement. According to paragraph 5.19, the analysis of reinstatement was based on a sample of 235 cores. We know from the Northern Ireland Audit Office's report that there were 46,000 road openings. Do you consider the sample satisfactory? How did you assure yourself that it would give an accurate and representative picture of the standard of reinstatement? Are there proposals that the utilities get involved in sampling - in other words, that they sample their own work in the way that is happening in Nottingham and certain other parts of England? That is really what I want to know.
Dr Murray: I shall answer the last part first. The utilities generally employ contractors to do their work, and they pay them to do it properly, putting in the correct thickness of blacktop and stone, proper compaction and so on. I believe all the utilities are now checking up; Water Service certainly has an extensive agenda, and the telecommunications companies also have large programmes, so they are checking up on their contractors to ensure that they are getting what they pay for.
As far as Roads Service samples are concerned, it is clear that the more cores we take, the more representative the sample will be. If we had taken 46,000 cores per year, we would know the full picture. What we actually do is, every six months, randomly select a number of sites covering all the utilities. For each six-month period it is about 120 cores. We accept that that is not as good as 46,000 cores, but we think it sufficient to give us an overview of how utilities are performing.
I should like to say something about the coring results. There has been comment on the percentage failure. Each time a core fails, we investigate it and decide whether remedial action is required. Some of the failures are because of too much engineering being carried out, so that instead of the 100 mm of blacktop we require, we might get 130 mm. In those cases it would not be appropriate for us to ask that the 130 mm of blacktop be taken out and the 100 mm put back. There is an element of over-engineering in the failures.
There is also an element of very marginal failure. When we take out a core on a category 4 road - one of the less busy examples - it is supposed to be 100mm. We measure the core at three different points. If the average of those three readings is 98mm, the core has failed. However, for practical purposes it is as strong as a 100mm core. I should not like the impression to be that a figure of 30% or 40% of the work done is so bad that it has to come out.
Mr Dallat: Given that the Ormeau Road was dug up 76 times, I hope you are not seriously suggesting that 235 core samples are adequate to get an overall picture. Quite frankly, some of the roads are left like a war zone, and the only thing missing is landmines.
Dr Murray: The cores are only one of our methods of quality control. We also have a guarantee period. For some works that guarantee period is two years; for others it is three. Generally that period is very useful to us, for if a utility's contractor has put back the stone without compacting it properly or has put down a thin layer of blacktop instead of the full layer, the works will fail within that time. When we become aware of that we will ask that the work be done again. When that has been done the guarantee period restarts.
Mr N Hamilton: I would like to make a comment about the Ormeau Road. We have looked at that issue because it was mentioned in the report.
One of the interesting features about the Ormeau Road is that 80% of this large number of holes were dug by Phoenix Natural Gas. However, it was using trenchless technology. Rather than digging one trench along the length of the Ormeau Road, Phoenix Natural Gas, because it was using the old gas pipe system, bored down and inserted a new pipe inside the old one. The problem, and my engineering colleagues will explain this, is that each time an existing pipe turned vertically or horizontally, another borehole had to be made. Therefore Phoenix Natural Gas, with the best of intentions of maximising the old pipeline, dug 80 holes instead of one, that one being the trench that stretched along the entire length of the Ormeau Road. Is my understanding of the technology correct?
Dr Murray: Yes. There was extensive use of trenchless technology on the Ormeau Road, and it did result in a large number of isolated holes. However, the use of trenchless technology meant that there was a little less traffic disruption at the time and less of the road surface has been disrupted.
Another point about the Ormeau Road is that it runs alongside the site of the old gasworks, and there are many gas mains radiating out from that site.
Mr Dallat: Very elaborate schemes were carried out to enhance town centres as part of the regeneration programme for towns in Northern Ireland. Paving stones, as shown in the film we watched, have been vandalised very often by contractors and replaced by tarmacadam, leaving what were very good schemes that should have lasted for years in an appalling state. Clearly there was no effort made to correct that when it was immediately obvious. There was no need for any core testing. There was no need to do anything other than look at the pavements. Is that issue being looked at, because one of the weapons, particularly for smaller towns that are fighting hard to retain business and encourage shoppers to stay locally, is the upgrading of street furniture and surfaces? Surfaces are being vandalised day and daily by contractors operating for utilities. What have you done about that?
Dr Murray: The reinstatement code of practice and its forerunners require that any utility going through a high-amenity area surface has to reinstate the surface as it was. Sometimes there are difficulties. If a scheme was completed a few years ago it can be difficult to get the same materials again, and a temporary reinstatement may be carried out. That temporary reinstatement may be blacktop. However, blacktop reinstatements should be pending proper repair, and the local section office can investigate cases where that has not taken place.
Mr Dallat: The lack of materials should not be an excuse for running tarmacadam up the middle of a paved pedestrian precinct.
Dr Murray: It can only be so if it is a temporary measure. Sometimes the utility will want to reinstate the surface to let people use it again.
Mr Dallat: I understand. However, temporary measures have a habit of becoming permanent, and that has been the problem all over Northern Ireland, not just in Coleraine.
Dr Murray: Many temporary reinstatements in the Greater Belfast area, which is the area I look after, are being made permanent by the use of the correct materials. All I can say is that Roads Service manages its street works through a network of section offices, and if there are examples where one of these temporary reinstatements has effectively became permanent, the local section office would be very happy to deal with that.
Mr Dallat: I will move on to paragraphs 5.15 to 5.29. Management of road openings is a key function of Roads Service. Therefore I am surprised to see that the Northern Ireland Audit Office found a lack of basic management information and no performance indicators that could be used to assess Roads Service performance or that of individual utilities. What are you doing to produce such information and to develop performance indicators?
Mr Orr: The computerised system is the key element that we needed.
Mr Dallat: I understand that. However, a computer is only as good as the information that goes into it. The information that comes out and how it is acted upon is really the aspect I am getting at. We have heard enough about the computer.
Mr Orr: It was very difficult to collate all the information when dealing with a paper-based system prior to the introduction of NISRANS, as you can imagine. We have been working with the new system for over a year and are getting the notifications through on it, which is allowing us to manage better. For example, the computer automatically generates a sample for us to inspect.
Mr Dallat: Will you publish this?
Mr N Hamilton: Yes. This is what I was referring to earlier. We now want to move to published standards and targets, and published performance, so that members of the Committee and the Assembly are aware of performance. We consider that to be particularly important.
Mr Dallat: We note from paragraph 5.24 that there was a court case in 1998 taken by a local authority in GB against one of the major utilities. It established an important principle that the utility was liable for defective work even though the guarantee period had expired. To what extent has Roads Service used this important precedent in its action against utilities?
Dr Murray: Roads Service and the utilities in Northern Ireland are well aware of that court case and are taking it very seriously. There is a guarantee period that runs for either two or three years. If anything fails during the guarantee period, clearly, we go back and ask the utility responsible to repair it. If something fails after the guarantee period and we can prove that the failure was because of defective work we can still go back to the utility. Effectively, we have an extra safeguard beyond the guarantee period.
Mr Dallat: In this report dated February you indicated that you were taking a number of test cases. Can you update us on those?
Mr N Hamilton: There was one successful prosecution, and we have another nine cases at an advanced stage of prosecution against a number of utilities.
Ms Ramsey: You said that Water Service causes 50% of the problems. As it has Crown immunity, where does that leave you?
Mr N Hamilton: We cannot prosecute Water Service, which is why I indicated earlier the range of actions that we want to take in respect of Water Service, including publishing standards and ensuring that it is complying fully.
Ms Ramsey: According to this report the majority of the problems is associated with Water Service but nothing can be done because of Crown immunity.
Mr N Hamilton: I do not agree that nothing can be done. That is why earlier I invited Mr Martin to explain precisely what he was doing to identify -
Ms Ramsey: What about the court cases?
Mr N Hamilton: There is Crown immunity.
The Chairperson: You can do nothing about Crown immunity.
Mr N Hamilton: That is right. It is a constitutional issue, which is beyond my authority. However, we can do lots of other things to make Water Service publicly accountable for what it is doing. That is the road we are taking.
The Chairperson: I welcome the fact that you are going to publish all this extra information. That is good news, and I look forward to that.
Mr Carrick: Mr Hamilton, in your responses so far I have noted the current position and your future intentions, which certainly appear to be an improvement on what we have been reading in the report. I want to bring you back to some of the issues in the report - particularly the streetworks register, or the absence of one. I know that you have already mentioned the reasons for the delay in the implementation, going right back to 1991. However, one of the provisions of the 1995 Order is a requirement for the Department to keep a register of street works. That was clearly a key to the successful implementation of the proper control over road openings. Paragraph 2.11, on page 26 of the report, states that the new computerised register was piloted in the eastern division in May 2000 and then extended to the other divisions in August 2000. Can you assure the Committee that the computerised register is sufficiently comprehensive and fully in place across Northern Ireland? Is it capable of meeting all the Department's statutory responsibilities and fully compliant with the Street Works (Northern Ireland) Order 1995?
Mr N Hamilton: Mr Orr will comment on the detail. The purpose of the system was to ensure that all notifications of all street works went into the register. It does not currently provide us with the reports that we want, either at geographical or utility level. That is why we hope to have an enhanced system in place by March next year.
Dr Murray: To add to that, the 1995 Order requires a number of commencement Orders to bring its powers into force. Because there was no computerised register in the past, we did not bring the relevant commencement Order into force to require us to keep a street works register. However, the relevant commencement Order that dealt with the co-ordination code of practice and the street works register was made on 17 October this year. We are already fully complying with that.
The NISRANS system has a gazetteer of every single street in Northern Ireland - that is why it is a complicated system. All the major utilities in Northern Ireland, including Roads Service, have terminals. All works are now registered on that system.
Mr Carrick: To follow up on that, I note the word "commencement." Mr Hamilton hopes that the register will be fully in place by March 2002. It is important for the public purse that there is not only the commencement, but also the completion, of a system that properly complies with the 1995 Order.
Mr N Hamilton: I assure the Committee that the current system is fully compliant with the requirement of a register.
Dr Murray: That is correct.
Mr N Hamilton: I was referring to an enhanced facility to enable us to produce reports about issues that are of concern to members of the Committee. Those reports are important in following up defects, in identifying trends and in identifying particular areas or utilities where we want to take action.
Mr Carrick: Page 24 deals with road openings. Figure 3 states that from 1997 to 2000 there were some 140,000 major road openings. That appears to be a broad-brush estimate. How were those estimates arrived at, particularly with the absence of proper and detailed information? How did the Department co-ordinate the scheme? How was it monitored and controlled without the aid of a computerised register? You mentioned the 100,000 pieces of paper moving around. What system was in place before the computerised register?
Mr N Hamilton: I would like Dr Murray to answer that. I do not want to give the Committee the view that our management information systems prior to the register were good or effective. I have clearly said that they were not. I do not want to mislead the Committee. We are, of course, using a lot of information from elsewhere.
Dr Murray: Before the new street works legislation came in and the new means of giving us advance notice of works, we had a system in place whereby three certificates were required. So any utility that wanted to dig up the road applied for a certificate to allow it to do so. That was certificate number one. On completion of the work certificate number two was issued indicating that permanent reinstatement had been completed. At the expiration of the guarantee period, which was at that stage only one year, we inspected the works and issued certificate number three, which advised the utility that it had been relieved of any further responsibilities. That was the system which operated throughout Northern Ireland previously, and all the old utilities worked in accordance with it. When the new utilities such as Phoenix Natural Gas and ntl came in they immediately started the GB system whereby they notified us of their works.
In answer to the second part of your question about the estimated number of road openings, "road opening" is a term which Roads Service and the utilities have used in the past. It is quite a loose term. There is no definitive explanation as to what a road opening is. Is it a single hole in the road, or is it five miles of new sewer that Water Service has installed? The code of practice now has a more precise definition, which is "inspection unit". This can be defined as an isolated piece of utility work; some small piece of utility work within a defined area; or, in relation to large works, it can be a 200-metre length. So a one-kilometre job would be defined as "five inspection units".
NISRANS requires that any utility carrying out works indicate how many inspection units will be involved, so with the advent of NISRANS we will be moving on to a new system. We will not be referring to "road openings" but to "inspection units", and we will have precise measurements.
Mr Carrick: As a consequence of the absence of information, to what extent does the lack of a street works register prior to 2001 mean that Roads Service would have difficulty in identifying, and taking action against, utilities which have carried out faulty reinstatements during this period? Do we have any indication or measurement of the financial consequences of that?
Dr Murray: Before NISRANS was up and running in the year 2000, our life was more difficult, but it was still usually possible to identify who had caused a road opening. When utilities lay their mains, pipes or cables in the road they have a series of manholes, and experienced section engineers and their staff can inspect a reinstatement on a road and can generally identify which utility was responsible even without having the back-up information.
Mr Carrick: My final question relates to the code of practice for inspections. I am referring to page 47, paragraph 4.12. Inspection by Roads Service is of course the key element in ensuring that utilities carry out reinstatements to the prescribed standard, yet in paragraph 4.12 you stated that you had delayed implementing an inspection code of practice until the computerised street works register was in place. Would it not have been possible to press ahead with the legal cover for the inspection process in advance of the street works register, as was the case in GB?
Mr Orr: The inspections code of practice is predicated on the existence of a computerised database so it would not have been possible. We had paper-based systems, but they were different from those in the inspections code of practice. It really needed the computerised system.
Mr Carrick: Are you saying that the manual system, prior to the introduction of the computer system, was inadequate for that?
Mr Orr: The manual system allowed us to record which utilities were working and to follow up the work and check the reinstatements, and so on. However, it did not allow us to charge inspection fees or defect fees, as envisaged by the inspection's code of practice.
Mr N Hamilton: Basically, it was not adequate for that purpose. We used the manual system to chase the utilities about defects, but it was judged inadequate to do the type of thing that Mr Carrick described.
Dr Murray: We are referring to a manual system, but it was computer aided. We did not have NISRANS before 2000. We could not keep huge piles of paper in the busier section offices in the Belfast area. When the offices in Belfast and the surrounding area got the paper notification from the utility, the information was entered into a computer database. Someone from Roads Service had to enter that information manually, but at least it was there for management purposes. With the introduction of NISRANS we no longer need to do that. The utility enters the data into its own terminal, and it is immediately available to the Roads Service office. We have saved ourselves work by introducing NISRANS.
Mr Close: I have been listening for an hour and a half, and I have formed some interesting conclusions or perceptions about what has transpired. First, it strikes me that you, gentlemen, do not travel to work by car or on foot - you probably take a helicopter. You have put a gloss on the state that the roads are left in after the utilities make openings. I accept that there were problems in the past, but, in many respects, it is unreal. The tone of this morning's evidence suggests that everything is getting better, and that everything was poor in the past. That begs the question: what was going on in the past? What have Roads Service and Water Service been doing? Have they been twiddling their thumbs? I am delighted to know that the relationship between Water Service and Roads Service will improve, and that there is going to be some co-ordination. I say "Hallelujah" to that. I am sure that the public was looking for "Hallelujah" sooner.
In passing, Mr Orr made the point that getting money from Water Service would have a neutral effect on the public purse. Is it not correct to say that most of the work done by Water Service is done by private contractors? Therefore, could Water Service not go after the contractor and say "Look here, we are dealing with a public asset that is worth about £17 billion, and it is being torn up"? I agree that I do not like seeing them tearing up our roads -taxpayers' roads - but they are doing it. If someone were to tear up my driveway, I would make blooming sure that they would pay for it. I would not take a laissez-faire attitude and not pursue them to the nth degree.
That follows on from Mr Carrick's point about the inspection code. Its implementation here was delayed, and that has resulted in a loss of fees to the public purse of some £600,000 per annum. Taken over the years in which it should have been implemented - following the GB example, where it was introduced before there was a computerised system - that has cost several million pounds of taxpayers' money. We paid that money when we were cash-strapped and had no room to manoeuvre. Just think about what that money could have been spent on. What were the benefits of delaying implementation of the system? I have told you the costs, but what were the benefits?
Mr Orr: I too am disappointed at the delay in introducing the system. There were some benefits in that we have been able to learn from the experiences in England and implement better procedures. However, those benefits were not significant.
With regard to the loss of fees, we estimate that the sample inspection fees are £200,000 per year. In order to increase that figure to £600,000 we would have to undertake as many defect inspections as possible. We do not have the resources to do that. If we employed more staff to carry out inspections, that £600,000 would only be enough to cover the cost of those additional inspectors.
Inspection fees are paid by the utility, not the contractor. Therefore about half of the £200,000 annual inspection fees is paid by Water Service, not Water Service's contractor.
We did not have the legislative ability to charge the utilities fees, but we had a voluntary agreement with the new utilities involved in new build to the extent of £284,000.
Mr Close: Who decided not to introduce the code of practice?
Mr Orr: It was not a decision as such. Nobody actually said that we were going to defer the introduction of the inspection code of practice. A computerised system was a necessary precursor to the introduction of the code. It was therefore dependent on a computerised system being in operation.
Mr Close: Somebody decided that the introduction of a code of practice was dependent on having a computerised system and decided not to follow the practice that was in operation in GB. Please tell me that a decision was made. Do not allow me to believe that the Department simply did not bother and ignored the situation.
Mr N Hamilton: It is important to note that the codes of practice that we now have are not the original codes of practice used in Great Britain. Several problems emerged when those codes of practice were first implemented in Great Britain.
Dr Murray: That is true. We were slower to introduce our codes of practice than Great Britain was. However, the codes of practice gave rise to problems shortly after they were introduced in Great Britain, and the groups in GB that we are in contact with were aware of those problems and reviewed the codes.
It would have been inappropriate for us to replicate codes of practice that had inbuilt inadequacies. Therefore we examined the hundreds of points that emerged in discussions on codes of practice in GB, and then decided what should be done in Northern Ireland. That is why there are improved codes of practice in Northern Ireland.
Although the inadequacies in the codes of practice in England were noticed very quickly, none of the amended codes of practice have yet been implemented. So after eight years they are still working to codes of practice that have inadequacies.
The implementation of the inspections code of practice has three strands - the co-ordination code of practice, the inspection code of practice and the NISRANS computer system. They must be considered as a block. The co-ordination code of practice will not work unless there is a computerised streetworks register. In Great Britain a paper system was tried out, but staff were completely buried in paperwork.
The inspections code of practice relies on people using the co-ordination code of practice to advise the Department for Regional Development of their works and on the availability of the computer system to analyse that information.
There is a group in Roads Service called the street works advisory group. It had to decide whether to introduce the co-ordination and inspection codes before installing a computer system or delay them until the computer system was installed. It was decided to delay those two codes of practice until the computer system was up and running.
The delay in the installation of the computer system was longer than anticipated, so the Department reviewed the decision. When I was in the street works advisory group the chairman at that time frequently asked if it was wise to hold off on introducing the inspections and co-ordination codes of practice until the installation of the computer system was completed. Feedback from Great Britain suggested that it would be foolhardy to try to introduce those codes before NISRANS was up and running.
Mr Close: Will you remind the Committee of some of the problems that were encountered in Great Britain?
Mr Orr: I will give the Committee some examples of where the Northern Ireland codes are improved. In Great Britain the reinstatement code has no protection for street trees, but that was built into the Northern Ireland code. The Northern Ireland reinstatement code has tighter standards for the crowning or depression of a road when a trench is dug. The Northern Ireland reinstatement code has insisted on thicker reinstatements in footways where the reinstatement goes past a vehicular entrance. The response times for defects have been tightened. The Great Britain system had a complicated sequence of five inspection types. Northern Ireland has reduced that sequence to three, and the new Great Britain code is following our system. Therefore there were a number of improvements.
Mr Close: Will those inspection codes be introduced in January or February 2002?
Mr N Hamilton: They are already in place, but they will have statutory effect from January.
Mr Close: You said that the fee would be £15·50. What is that based on?
Mr Orr: It is based on how many inspections a member of staff can do in a day multiplied by time and costs.
Mr Close: Will it cover the cost of the inspections?
Mr Orr: Yes.
Mr Close: Paragraph 4.17 states that while the number of road openings has more than doubled since 1992 there has been no increase in inspection staff - you referred earlier to the lack of staff. What level of inspection are you currently carrying out, and are you satisfied that it is sufficient to ensure that reinstatement is being carried out properly?
Mr Orr: Under the guidelines in the inspections code of practice we are supposed to be doing 30% of a random sample of inspections. However, we are doing more than that. Thirty per cent of random sample inspections are carried out on the small openings dispersed throughout Northern Ireland, but 100% of inspections are carried out in areas where the likes of Phoenix Natural Gas or ntl are involved in major new builds. That is because they are in one place, and it is easier and more efficient for the Department to do 100% of inspections. You can go to the area in which the work is being done and do all of the inspections that are required, whereas the smaller openings are distributed all over Northern Ireland.
Mr Close: Are you satisfied that reinstatement is being carried out adequately?
Mr Orr: No. There still needs to be progress with regard to the utilities, although I did indicate a good improvement in the coring results. One of the best things that the street works legislation provided was the introduction of the reinstatement code in February 1999. This gave us a two-year, or is some cases a three-year, guarantee on the work of the utilities. That was a strong motivating factor for them to get their act together. At that time many of them introduced quality control systems which involved their bringing in independent testing firms to test the quality of their reinstatements. So there has been an improvement in that regard.
Mr N Hamilton: Of those new build works where there has been 100% inspection over the past 18 months, there have been a number of cases where defects were found, and the reinstatement was not satisfactory. At our insistence the work has been done again, not at public expense but at the expense of the utility. There have been a number of examples of the work having to be done again.
Mr Close: I am pleased to hear that. I am not doubting what you say, but when I look at paragraph 5.5 I see that there are different approaches to inspection at different section offices. One of them says it carries out 100% inspection of final reinstatements; another one does not look at works in progress. Some of them have checklists while others rely on the utilities rectifying the defective reinstatements and do not follow up with a second inspection. I appreciate what I am hearing. However, paragraph 5.5 makes me wonder how that can be the case if there is not a standard and uniform practice that moves down from headquarters to all the different divisions and section offices so that there is compatibility, uniformity and an enforcement procedure to ensure that the work is carried out to that level of inspection.
Mr Orr: You are right. NISRANS is now helping us because it generates the random inspection from the information that it already holds. So the computer does the 30% random check. We have also recently issued firm guidance to our section offices about the 30% routine inspections - 100% on new build. We also told them that they should increase their inspection frequency in relation to contractors or utilities where there has been a problem identified. So we will increase the frequency of inspection.
I have to be honest and say that when you have got 24 section offices throughout Northern Ireland, it is hard to ensure that they are rigorously doing everything exactly the same. There is always a measure of local interpretation, but we have tried to give good and firm guidance.
Mr N Hamilton: We have given firm guidance in the last couple of months both on the inspection and the nature of the samples and on the coring, which was another issue that was in the report.
Mr Close: Are the results of inspection monitored, controlled and recorded?
Mr Orr: Yes. The results of the inspections are generally fed into NISRANS.
Mr Close: Generally?
Mr Orr: The inspectors who are sent out on the random samples will feed that back into the NISRANS system. We also pick up defects because we have our normal safety inspectors inspecting roads for everyday types of defects at certain intervals. When they see a hazardous defect from the utility they will report that to the utility as well. We have recently been working at getting that strand of information fed into NISRANS, on top of the 30% of random inspections.
Mr Close: For inspections to be meaningful there must be an end result. There must be product. Is it right that utilities should be able to rip open our roads and have a statutory right to do so?
Mr N Hamilton: That is an important policy issue. Our starting point is that utilities provide a basic, important infrastructure. Parliament considered it proper at the time to give utilities the right to do that. We have tried to make the system that the legislation provides as effective as possible. I should like to discuss with the Minister and with others whether that statutory entitlement should be changed.
Mr Close: Why should private utilities, undertakings or companies, which are making large profits, have a statutory right to rip up my driveway, my garden or pull down a wall in my house? As guardians of the public purse, we should adopt that attitude rather than try to make life easier for those whose motivation is profit.
Mr N Hamilton: We are not trying to make life easier; we are trying to ensure that the statutory requirements, the code of practice and the standards laid down are met by all the utilities without fear or favour. That includes Water Service. We take that seriously. We have tried to show what we consider to be the weaknesses in the system; we have tried to show what we have done; and we have tried to show what we expect to happen. Roads Service has the responsibility of ensuring that Northern Ireland has the best possible roads network. If, however, we needed enhanced powers to accomplish that, I know that the Minister would want to discuss that with us and to report to the Assembly.
The Chairperson: I am sure that the Regional Development Committee would have something to say on that.
Mr N Hamilton: Absolutely.
Mr Beggs: The figures in the report go up to March 2000, and you say that there has been a great deal of improvement. Can you provide us with the figures for this year to show that the improvement is continuing?
Mr N Hamilton: Yes, we can.
Mr Beggs: At our last meeting we discussed the matter of river pollution, and we found that Water Service had in many instances failed to comply with discharge standards to protect water quality. Water Service seems to be abusing its position as a Government agency with Crown immunity in order to avoid complying with the standards that apply to the private sector. Can you assure the Committee that Water Service is complying fully with the street works regulations?
Mr Martin: Water Service is working as a public utility to deal with the waste product of developed society, to treat that product and to return it to the environment with the least possible impact. We are working with what is in many cases obsolete technology and with sewers that are under great pressure and which were sized perhaps 100 years ago. We have many difficulties with the network of 25,000 kilometres of water mains; and we have 15,000 kilometres of sewers, much of them in a distressed state. We have combined sewer outlets that discharge directly into waterways and the sea whenever there is a storm.
Water Service does not deliberately pollute the environment. It is doing its best with the infrastructure that it has to ensure that pollution is kept to a minimum. The Water Service will comply fully with the provisions of the 1995 Order and with the code of practice.
The Chairperson: You have accepted that there has been a delay in implementing the codes of practice and that this has had an effect on the matter. The Committee is pleased that you have indicated that there will be improvement in the future, and it will keep a close watch to ensure that that happens.
The Committee received a paper from the Stratagem group, and it will consider it in its report. One of its key concerns is that Water Service and Roads Service have immunity from prosecution, while legal action is taken against other utility companies. It is impossible to obtain up to date figures on Roads Service or Water Service failure rates for road openings. That is another concern which the Committee will look at when it deals with the report. It is vital that all utilities follow codes of practice to ensure the quality of the reinstatements. There should not be one standard for utility companies and another for Government agencies, especially when they use the same contractors. That was raised earlier; it is included in the utility's submission, and the Committee will consider it as well.
Thank you for attending the meeting.
[The meeting was suspended for two minutes]
The Chairperson: I apologise about the late start of today's meeting, but it was due to circumstances outside of the Committee's control. Several Members were attending a Remembrance Service.
Paragraph 13 of the Comptroller and Auditor General's report on the 1999-00 annual accounts refers to the poor management of the consultants employed by Roads Service to assist in the valuation of the roads network. Those consultants were paid £210,000 until April 2001. Why did the Department for Regional Development not closely supervise the work of the consultants, given that their task was so vital to the business?
Mr N Hamilton: The Department for Regional Development accepts that there were weaknesses in the management of the consultants used - both in the level of communication and in the lack of challenge of the assumptions that were made. The valuation of the roads estate in Northern Ireland is, as the Audit Office acknowledged, a huge and complex issue. The Department is trying to value an estate that is worth about £20 billion.
Roads Service is in this unique situation because it is the roads authority for the whole of Northern Ireland. The situation here is different from that in England where only the trunk road system is valued. However, the Department accepts that there are weaknesses in the management of the valuation process. Subsequently we have established an infrastructure valuation group chaired by Roads Service's finance director, Mr McNeill. Members include finance and engineering staff, and meetings are now attended by the UK partner of the consultant and by Mr Dowdall's staff. The Department believes that the further quality assurance checks and tests were developed as a result of the infrastructure valuation group and that the situation has improved in 2000-01.
The Chairperson: You have answered a question that I intended to ask. Have you paid the full amount to the consultants?
Mr McNeill: In 1999-00 we paid about £30,000 to those particular consultants, and there was no amount deducted to cover the lack of their quality assurance work. However, in the year ending March 2001, having raised these issues with the management of the consultants and being disappointed at their further lack of quality assurance, we negotiated a reduction in the fee paid to those consultants.
Mr N Hamilton: So we were paying them about £20,000 or £30,000 each year.
Mr McNeill: With regard to the £210,000 that you mentioned at the start, it is important to understand that this covers a four-year period, which is quite an extensive length of time. In the early years there was a lot of development of the valuation system to take account of the fact that, in Northern Ireland, we have to value the trunk roads and also the non-trunk roads, which is different from the GB situation. There was a lot of development work undertaken by the consultants for Northern Ireland, and that took up a considerable amount of that £210,000.
The Chairperson: How much of the £210,000 was paid, or was it all paid?
Mr McNeill: That was all paid.
The Chairperson: Was the £210,000 paid to the consultants?
Mr McNeill: Yes, including VAT.
Mr N Hamilton: That was from 1997 to April 2001.
The Chairperson: That indicates that they should have got a lot more if they had been doing their job. The consultants received £210,000, but that was not the full amount. What would the full amount have been had they done the job properly?
Mr N Hamilton: That was the amount that was paid to them up to April 2001. However, that also includes a 10% reduction in fee for 2001 due to the weaknesses we had identified.
The Chairperson: That is the point that I am trying to get at.
Mr N Hamilton: They should have got slightly more - 10% of the final year's expenditure.
The Chairperson: It does not seem like a very good deal to me. Nevertheless you have answered the question.
In paragraphs 20 to 25 of the Audit Office report we observed a number of weaknesses in the control over payments made to external contractors. I understand that Roads Service extensively use contractors for the repair and maintenance of roads. How does the agency ensure that payments made to external contractors are correct and that the work requested has been carried out and to the standard required?
Mr N Hamilton: I want to make a comment or two before answering that. We were disappointed and concerned at this particular qualification of the accounts. We accept that, in light of what the Audit Office found, the evidence provided in the documentation was not adequate. I should say that it is a big issue.
After I had arrived in the Department I wanted to emphasise to everyone in the Department the importance of financial accountability. We undertook a number of activities - for example, we invited Mr Dowdall and his senior colleagues to address our senior management team. We spent a whole afternoon at the Roads Service conference a few weeks ago looking only at financial accountability and emphasising to everyone what needed to be done to comply with Government accounting. We have spoken at various other conferences as well. With reference to this weakness, we have established a compliance audit team chaired by the director of engineering with a range of staff to look precisely at the issues to identify good practice - we will be discussing this with Mr Dowdall's staff as well - that they found in some section offices and also to redress the issues of concern regarding the documentation. The compliance audit team is already up and running and in business. Mr Fraser might want to add to that.
Mr Fraser: On the specific point about how we check the work, we were disappointed by what happened here. First, it is important to emphasise that there is no suggestion of irregularity or impropriety in relation to these payments. Most of the maintenance contracts to which you referred are done under something called the 'Institution of Civil Engineers Conditions of Contract', fifth edition, which is the standard way of managing them. The engineer to the works certifies that the amount being paid to the contractor is appropriate for the work that has been done. In all cases that certificate was signed. The Audit Office found, however, that the documentation behind the certificate was inadequate in some cases. That is something that we have to pick up.
As Mr Hamilton said, the Audit Office also identified examples of good practice. We must ensure that good practice is rolled out and becomes the norm in our organisation. We have strict financial delegation limits in place. We have issued several instructions recently - we referred to this at the conference - just to ensure that all the relevant staff in Roads Service appreciate the importance of this issue.
The Chairperson: That covers everything that I wanted to ask on that point. However, the Committee is disappointed to learn that there was a lack of adequate project management, which was the core of the problem. I would have considered the valuation of infrastructure, which Mr Close mentioned, was fundamental to the production of accounts. The Committee is shocked also to learn of the level of mismanagement in that project. However, having heard all the evidence, particularly from Mr Hamilton, I am confident that lessons have been learnt and that there will be great improvement compared to your past record.
Mr N Hamilton: We must deliver.
The Chairperson: That is what we are here to see to; we will make sure that you deliver. We welcome the steps that you are taking to increase awareness of your financial accountability, because that was something that the Committee was concerned about. Increased awareness will be an excellent start.
Mr N Hamilton: Thank you for your comments. I thought it was important, given my position, that all members of staff in the Department - in Roads Service, Water Service and in the core - were aware of the importance of financial accountability, and I am grateful to Mr Dowdall for his help. We also included political accountability, given the importance of the role of the Minister and the Assembly and its Committees, and we try to emphasise it in everything that is done by our staff.
The Chairperson: That implies that you are concerned about this Committee as well. Thank you very much for coming here. I also thank Mr Delaney and Mr Dowdall and their teams. I apologise for the time factor and hope that the roads to Newcastle are clear this afternoon.
Correspondence of 4 December 2001 from Mr Nigel Hamilton, Accounting Officer of the Department for Regional Development
ROAD OPENINGS BY UTILITIES (NIA 35/00)
I refer to your letter of 20 November 2001 accompanying the transcripts of evidence given to the Public Accounts Committee hearing on 8 November 2001.
Having examined the documents, I have marked on them a number of alterations in accordance with your instructions, and I return a copy of the amended transcripts for your consideration.
At the hearing, my colleagues and I undertook to provide additional information requested by committee members in the course of the discussion. This is attached in Annex 1. I hope this information is helpful to the Committee.
Information Requested by the Committee
The following information is provided in response to requests made by members of the Committee in the course of the discussion at the hearing on 8 November 2001:
1. Public Attitude Survey
Regarding the results of a public attitude survey on utility performance requested by Mr Bell:
Two questions are included in the Roads Service public opinion survey currently being carried out as part of the Omnibus Study undertaken by the Northern Ireland Statistics and Research Agency for various NI Departments. The questions are:
"Using the scale on the showcard, please tell me how satisfied you are with...
Q1 The quality of temporary road signs at utility works. E.g. Phoenix Gas, NIE, British Telecom.
Q2 The measures taken by utilities to reduce the inconvenience of their work.
Scale: Very Satisfied, Satisfied, Dissatisfied, Very Dissatisfied."
The results of the Roads Survey will be made available to the Roads Service in December 2001, and a copy of the results will be forwarded to the Committee Clerk as soon as they are available.
2. Utility referred to in paragraph 5.11 of the NIAO Report.
Regarding the identity of the utility referred to in paragraph 5.11 of the report, requested by Mr Beggs:
The survey referred to in para 5.11 of the NIAO "Road Openings by Utilities" report involved all organisations that Roads Service's maintenance offices notify defects to. As well as the normal utility companies, this included organisations such as Belfast City Council, who maintain items of street furniture, Adshel, who maintain bus shelters and other parts of Roads Service.
During the period of the survey (one week in November 1999), 2 organisations had taken no remedial action in response to Roads Service notification of defects. The organisations were Belfast City Council and Adshel, and between them, they only had a total of 3 defects.
3. Coring Survey results
Regarding the most recent coring survey results on Utilities reinstatement work requested by Mr Beggs:
With reference to the coring survey results included in Appendix 2 of the NIAO "Road Openings by Utilities" Report, the corresponding results for the period April 2000- March 2001 are:
Coring Results: April 2000 to March 2001
Note: The results of cores taken in the second half of this period are preliminary and are subject to future consultation and agreement by the Northern Ireland Roads Authority and Utilities Committee (NIRAUC)
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