Issue - meetings

Report of the Director for Director of Environment and Resident Experience. To be introduced by the Cabinet Member for Resident Services and Tackling Inequality.

Approval is sought to extend the existing contract by a further 2 year in accordance with the terms of the contract.

The Cabinet Member for Resident Services and Tackling Inequality introduced the report which sought approval to the extension to the current contract with Marlborough from June 2025 to June 2027 to ensure the ongoing cost-effective delivery of the Council’s planned and reactive highway works.

In response to a question from Cllr Emery on considering the insourcing option outlined in the alternative options, this had been explored a few years ago and not found to be viable. It was noted that no London borough had an insourced highways service as the muti layered and varied skills and expert workforce required coupled with the costs of plant equipment made this an expensive service in turn making it difficult to achieve the required economies of scale. Nothing had changed since the initial exploration of this option in 2020.

RESOLVED

1. To approve the extension of the existing contract awarded to Marlborough Highways Ltd for the maintenance of the Council’s highway assets for a period of a further 2 years from 1 July 2025 to 30 June 2027.

2. That the be an increase in the potential total contract value through the full life of the contract from £84m to £98m.

Reasons for Decision

In its capacity as the local highway authority, the Council has a statutory duty under the Highways Act 1980 to maintain and, where necessary, improve the local highway network within its administrative boundary. A continuation of the existing contract with Marlborough Highways Ltd will ensure that there is no interruption in the fulfilment of this statutory duty.

Alternative options considered

Do nothing: On the basis of the abovementioned statutory duty, doing nothing is not a viable option. The Council cannot simply let the existing contract run down without establishing an alternative arrangement for the maintenance of its local highway network.

Insource: During 2022/23, officers carried out a detailed review of options for insourcing part or all highway maintenance works. However, it was concluded that this would not be viable in any form in the current economic climate having regard for a range of factors including the relatively high level of investment in vehicles, plant and machinery, and the health and safety risks that the Council would assume.

Procure a new service provider:The Council could consider retendering the contract to test the market. However, besides the significant cost of the procurement exercise, there might be limited value in such an option having regard to the following factors:

Potential disruption to the current benefit of delivery of both the highway works contract and street lighting contract through a single contractor operating from the same depot within the borough.

Relative competitiveness of the initial tender – tender evaluations revealed that overall, the successful contractor demonstrated a significant competitive advantage over other tenderers both in terms of quality and pricing.

Current uncertainties within the market (due to inflationary costs and material supply problems) would lead to contractors perceiving greater risks when tendering. This was confirmed by the significant increase in prices submitted when a package  ...  view the full minutes text for item 153