Agenda item

[Report of the Director for Environment and Neighbourhoods. To be introduced by the Cabinet Member for Neighbourhoods.]

Award of Highway and Street Lighting Term Contracts.

The Cabinet Member for Neighbourhoods introduced this report which sought the approval to award a Street Lighting Term Contract, in accordance with CSO 9.07.01(d) for an initial term of four years, with an option for two further two year extension periods; thereby the maximum term of the contract being eight years.

The Cabinet Member noted street lighting made communities safer, reduced risk of crime and ensured that the Council was energy efficient. Further, it was the Council’s responsibility to provide high quality maintenance for highway and street lighting across the borough. Officers had undertaken a competitive tendering exercise in relation to a Highways and Street Lighting term contract.

In response to questions from Councillors Barnes and Tucker, the following information was noted:

• Regarding the contract and the clauses within, the Head of Procurement advised that there are significant differences between the clauses in the existing contract and the one under consideration. There was an escalation process within the contract under consideration which meant it could be terminated if the contractor failed to perform its duties as set out in the contract.
• With regards to the roll out of LED lighting, the Director for Environment and Neighbourhoods confirmed a business case was being created to look at rolling out LED lighting across the borough. Such a proposal would enable energy saving and maintenance cost savings. Once proposals had been formulated within the next 4 months, they would be consulted on with the relevant Cabinet Member before being brought to Cabinet.
• Responding to the issue of not delivering the Highway and Street Lighting in-house, the Leader emphasised that the first preference within  the Labour Administration’s manifesto was a commitment to deliver services in-house  where it was prudent to do so, where it did not impact on service quality and where the Council had the capacity to deliver.
• Regarding the length of time it would take to develop this service in-house, the Cabinet Member noted this would take between two and three years. The contract would enable the Council to address the logistical matters such as the equipment it would need, the number of staff it would require and what training would be required, before it considered bringing this service in-house.
• The four year term of the contract under discussion was a reasonable amount of time for the Council to explore the possibility of bringing this service in-house at a later date. Islington Council’s Highways contract was compared to for context which had a lock in clause for 25 years.
• The Cabinet Member stated the current contract had issues surrounding performance management.
• The Cabinet Member responded that the APSE report was a draft report and not complete so it should be considered in that context and not associated with the resolutions at hand.

Further to considering exempt information at item 33,

RESOLVED

ThatCabinet approves:

1. Pursuant to CSO 9.07.01(d) the award of a contract for Street Lighting Term Contract to Bidder SL 1 (identified in the exempt part of the report), for an initial four (4) year term, with an option to extend (at the Council’s absolute discretion as contained with the terms and conditions of the Contract) for two further two year extension periods.

2. The withdrawal of Lot 1 (Highway Maintenance and Minor Highway Improvement Works) from the procurement process, resulting in no award for Lot 1, for the reasons set out in exempt section (Part B) of this report.

Reasons for decision

Officers have undertaken a competitive tendering exercise, in accordance with the Public Contract Regulations 2015, in relation to a Highways and Street Lighting term contract. Through this process Bidder SL 1 submitted the Most Economically Advantageous Tender in respect of the Street Lighting Term Contract, and therefore, in compliance with the Public Contract Regulations 2015, can be awarded the Street Lighting Term Contract.

The delivery of highways and street lighting works, both planned and reactive, contribute to the delivery of a number of Council priorities, as well as supporting the Council in complying with its statutory duties arising out of the Highways Act 1980 and Traffic Management Act 2004.

Alternative options considered

In 2018 the Council drafted a Highway Commissioning Strategy which investigated eight options as to how the Council should provide its Highways and Street Lighting services over the next eight years. These options included the full or partial insourcing of the service. They were:

a)    Continuing with the existing London Highways Alliance Contract (LoHAC);

b)    The use of other existing contracts;

c)    The use of the London Borough of Ealing term contract (open to all boroughs);

d)    A new term contract;

e)    A new multiple operator framework agreement;

f)     A new design and build contract;

g)    Externalising the complete highways function;

h)    Bringing construction works in house (in full or part).

Each option was subjected to three tests before being considered further. Those three tests included the following considerations that the approach:

1. Had the capacity to deliver the Councils requirements;
2. Could meet the performance requirements of the Council;
3. Could be achieved in the timeframes the Council was working to.

Options passing the initial testing were scored against several other criteria Procuring a new term contract (Option d)) passed all three initial tests and scored highest in the second part assessment. In-house provision of these services was excluded, as it failed to meet the required timescale.

Our benchmarking also confirmed that none of the 75 members of the APSE Highways service delivery group or other North London boroughs were delivering, or would consider delivering, a totally in-house service. This has been confirmed recently that no metropolitan borough is providing the whole of a highways service in house. The reason for this is that some elements of work would be inefficient and cost prohibitive to directly deliver these types of works (i.e. planned resurfacing 9 weeks work c. £1Mn).