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Session 2001- 02
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Delegated Legislation Committee Debates

Draft Local Authorities (Contracting out of Highway Functions) (England) Order 2001 and Draft Street Works (Charges for Occupation of the Highway) (England) Regulations 2001

Second Standing Committee

on Delegated Legislation

Monday 10 December 2001

[Mr. James Cran in the Chair]

Draft Local Authorities (Contracting Out of Highway Functions) (England) Order 2001 and the draft Street Works (Charges for Occupation of the Highway) (England) Regulations 2001

4.30 pm

The Parliamentary Under-Secretary of State for Transport, Local Government and the Regions (Ms Sally Keeble): I beg to move,

    That the Committee has considered the draft Local Authorities (Contracting Out of Highway Functions) (England) Order 2001.

The Chairman: With this it will be convenient to consider the draft Street Works (Charges for Occupation of the Highway) (England) Regulations 2001.

Ms Keeble: The first instrument before the Committee is a contracting out order made under the Deregulation and Contracting Out Act 1994. It simply permits a highway authority, if it wishes, to delegate the operation of certain existing functions involving utility street works to another body, such as a private sector contractor. An earlier order, the Local Authorities (Contracting Out of Highways Functions) Order 1999, listed a wide range of functions, including street work functions, that could be contracted out. The regulations before us adds to three additional functions to that list, and I shall briefly describe them.

The first of those functions involves the keeping of information that highway authorities hold on individual street works in their register of street works. Utility companies wishing to carry out works are required to supply formal notices to the relevant highway authority for the road on which the works are to be carried out. Those notices might state, for instance, when the works are expected to start or when they were completed.

Since April 1999, authorities and utility companies have been using a standardised electronic system for processing notices that uses the internet; it is known as ''ETON''. The use of that system is not mandatory, but the regulations will encourage its use by requiring undertakers to pay authorities a fee whenever they supply the latter with such information in a non-computerised form. The use of standard computerised notices will allow information on works to be transmitted more quickly to highway authorities, with a higher level of consistency and accuracy, thus making it easier for them to co-ordinate different works so as to reduce disruption.

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The second set of powers that could be contracted out are functions contained in regulations that came into force earlier this year. They deal with the cost of moving utility apparatus that is already located in or under highways so as to allow major highway, bridge or transport schemes to be carried out. The regulations prescribe how the cost should be shared between the relevant utility and the authority carrying out the scheme. The regulations replace an earlier 1992 version, and the functions were contained in the previous 1999 contracting-out order.

The final set of functions relates to powers made under section 74 of the New Roads and Street Works Act 1991. As hon. Members will know, those powers allow highway authorities to set up schemes to levy charges on undertakers whose street works overrun an agreed deadline. They were activated in April this year.

I should make it clear that it is entirely for individual local authorities to decide whether they wish to use the freedom that the order gives them to contract out those functions. In doing so, they will obviously need to take account of all the implications, including those for staffing levels, but the order will allow them to do so on a clear and simple legal basis.

Hon. Members will note that the lane rental regulations contained in the other regulations before the Committee are not included in the contracting-out order. As those regulations have not yet come into force, it would not be appropriate to include them. Hon. Members will be aware that no decision has yet been taken to extend lane rental beyond the areas in the pilot scheme, which I shall deal with in a minute. However, should we decide later to roll out the lane rental powers throughout England, we would expect to make a contracting-out order to cover them.

I turn now to the second and more substantial statutory instrument before us today—the Street Works (Charges for Occupation of the Highway) (England) Regulations 2001. The aim is to permit pilot schemes to be operated to test powers to allow highway authorities to levy charges on utilities when the latter carry out works on the highway.

The Government are aware of the concern expressed by the public and by businesses on the level of disruption caused by street works carried out by statutory undertakers. Of course, utility companies that deal with gas, water, electricity, and telecommunications have a statutory right to carry out street works, as part of the provision of services that are regarded as essential in a modern society. However, road users are entitled to expect the minimum disruption from such works, whether they are drivers, pedestrians, cyclists or users of public transport.

At the end of 1999, the Government launched consultation on possible options to reduce such disruption. After considering the responses, we announced in April 2000 that we intended to activate powers in section 74 of the New Roads and Street Works Act 1991 that allow highway authorities to charge undertakers whenever works overrun an agreed deadline. Those powers came into effect in England on 1 April 2001, and so far more than 110 authorities have

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announced that they use the charging powers or will do so. We have appointed Halcrow as consultants to monitor the effect of the new powers, and they are due to provide Ministers with a full report on the subject by May next year.

We have already made it clear that if the powers do not lead to a sufficient reduction in disruption, we are prepared to activate further powers that we made in the Transport Act 2000. Those new powers on what is commonly called lane rental allow authorities to levy a daily charge on utilities from the start of each works, regardless of whether they overrun or not.

The Government seek to address unnecessary disruption from works on several fronts. As well as introducing the regulations, we are bringing forward a number of other regulations or codes of practice--both in some cases--on different aspects of street works practice. Already this year, we have published codes of practice on safety at works—signing, lighting and guarding sites while works are in progress—and on the effective co-ordination of different works. Among other measures, further codes are likely to be issued next year on the keeping of effective records of existing apparatus buried beneath the road, the inspecting of works to ensure that they have been carried out properly, and a revised specification of the standards to be met when reinstating the road surface after carrying out works.

Each code or set of regulations has been or is being drawn up with the assistance of representatives of highway authorities and utilities, and I pay tribute to the hard work that has been put in by all sides. In partnership with the highway authorities and utilities committee, on which all concerned are represented, we published a best practice guide aimed at both utilities and authorities earlier this year. Its aim was to bring the worst performing practitioners up to the standard of the best.

Each initiative has the common aim of ensuring that work is carried out as quickly as possible and with the minimum of disruption, but also that it is done safely and to a high standard. We recognise that utility companies are not responsible for all the disruptive works carried out on the highways. Highway authorities carry out a large number of works, such as road resurfacing. We want to reduce disruption to road users, whether it results from utilities' works or those of highway authorities. The best practice guidance to which I referred is aimed at improving the performance of utilities and highway authorities. However, primary powers do not exist to introduce charging schemes for highway authority works, even if we thought that those might be desirable and effective. Nevertheless, we are considering how best we might make further improvements on highway authority and utility works.

I shall set out some more detail on the regulations. As regards national application, we intend to keep the lane rental powers in reserve for the moment, but we think it sensible for the powers to be tested locally to see what contribution they might play in reducing disruption from street works. That is why we have brought the regulations forward today.

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Earlier this year, we agreed that two authorities—Middlesbrough and the London borough of Camden, which had submitted bids to use the lane rental powers under the local public service agreement system—should be allowed to run pilot schemes. We shall appoint consultants to monitor the effect of those schemes. They will consider not only how far the pilots are successful in reducing disruption from street works in the pilot areas, but the costs that lane rental imposes on individual utility companies and whether it has any implications for the companies' programmes for installing or maintaining apparatus. That evidence—along with that from the monitoring work that is under way into the effect of the section 74 overrun charging powers—should give us a balanced picture of the effects of the powers and enable us to decide whether to roll them out across the rest of England. Any decision to do so would, however, need to be the subject of detailed discussions with interested parties, including local authorities, utilities, utility regulators and other relevant bodies.

The regulations are designed purely for the purpose of operating pilot schemes. If a decision is taken to launch the powers nationally, revised regulations will be brought before the House. If it approves them, authorities that want to operate pilot schemes will need to submit formal applications with the details of their proposed schemes. If we are content with their proposals, they will need to be approved by order. Subject to approval, we expect Camden and Middlesbrough to be ready to start operating their schemes early next year.

Under the charging scheme, undertakers will have to inform the relevant highway authorities of forthcoming works and works in progress by means of a system of notices. They will need to provide notice of the start date of individual works. They will also have to provide formal confirmation when works are completed so that the highway authority can calculate the charge to be levied on the undertaker. It will not be enough for undertakers simply to fill in the hole that they make, and the works will not be deemed to finished until any spoil, unused material, signs and lights are removed and the road is returned to its normal state.

Hon. Members will see that the regulations do not prescribe in detail every aspect of the pilot schemes—that will be a matter for Camden and Middlesbrough when they draw up their schemes--but they make it clear that certain works will not be subject to charges. Regulation 2(2) exempts so-called diversionary works. Utility companies are obliged to undertake such works to move apparatus that is already buried under the road so that other organisations can carry out major works—for example, the installation of new tram schemes or the building of new roads by a local authority. Regulation 5(2) exempts a range of lesser works, including the replacement of manhole covers and lamps. It is sensible to concentrate charging on the works that are most likely to cause disruption to road users, but without putting unnecessary burdens on utility companies.

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The regulations set a maximum charge of £1,000 a day for each works. Although we intend that pilot authorities should not set charges of more than £500 a day for initial street works, we want to ensure that utility companies do not cut corners to avoid charges. Where it becomes clear that the work that they have done to reinstate the road surface after maintaining or installing their apparatus is not to the required standard, the remedial work needed to correct any defects will be subject to a maximum charge of £1,000 a day. Authorities that operate pilot schemes will carry out a series of detailed inspections of individual street works to ensure that they are up to standard.

The level of disruption caused by individual works will depend not only on their size and duration but on the nature of the road. Disruption is likely to be greater on a high street than on a quiet residential road. Camden and Middlesbrough intend to deal with the issue by putting in place a two-tier system to allow an identified network of key roads to attract higher charges than their other road networks.

The powers are intended to tackle the problem of disruption to road users and are not meant purely as a revenue-raising scheme for local authorities. However, regulation 6(1) allows authorities to spend any revenue from charges that is left over once the cost of operating the scheme has been subtracted on transport services in their area.

Although the regulations set out certain parameters, we must also provide for flexibility. The regulations allow highway authorities to reduce or waive charges in certain circumstances—for example, where extreme weather conditions delay the completion of works. They also allow authorities to vary their charges to encourage utilities to carry out works at times when they would cause road users less disruption.

Concerns have been raised about whether the costs that lane rental would impose on utility companies will have a knock-on effect on customers' bills. As I explained earlier, the costs incurred by utilities will be monitored, and I expect that the relevant regulator for each utility sector will want to discuss the implications for customers with the utilities companies in due course.

The regulations provide important new powers to help reduce disruption to road users caused by street works. As is clear from their titles, both the draft order and the draft regulations apply only to England. However, the devolved Administrations in Wales, Scotland and Northern Ireland are each considering whether to introduce similar regulations and, if so, to what timetable. I ask the Committee to approve both statutory instruments.

4.45 pm


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