Kier criticised for ‘unaffordable’ roadwork quotes

Kier has been criticised by local councillors for quoting ‘unaffordable’ prices for simple roadworks in Suffolk.

The firm is contracted to maintain highways for Suffolk County Council, but has been criticised by opposition councillors for the cost of its work.

The firm’s 10-year contract is due to end in October 2023, and opposition councillors from the Green, Liberal Democrat and Independent group (GLDI) have called on the Conservative-run council to bring road maintenance in-house thereafter.

Green councillor and GLDI group spokesman for highways Keith Welham said the cost of simple, local maintenance work was too high. He said every county councillor gets a local highway budget of £6,000 for roadworks in their division.

“We ask for quotes, but we can’t afford them,” Welham said of working with the contractor and its supply chain.

Citing the example of a design cost quote of £10,000 for road humps, he said that even paying for design work was “completely impossible”.

Welham also said that working with an external contractor left the local council with no control over the programming and timescale of getting small, local projects done.

The GLDI has launched an online petition to gain support from residents, so the council can be nudged into a formal debate on an in-house bid.

Suffolk County Council notified firms in December 2021 that they could tender for the renewal contract, worth £1bn for the next 20 years, with £50m worth of work each year.

The council said bringing roadworks in-house would not be a cost-cutting exercise as it would drive up capital costs.

Paul West, Suffolk County Council’s cabinet member for Ipswich, operational highways and flooding, said: “There are many reasons why an in-house model would not be viable, including the burden of tens of millions of pounds in upfront capital costs associated with vehicles, machinery and traffic management – not to mention the ongoing cost implications of maintenance of these assets.”

West defended appointing an external contractor, saying they had greater buying power, industry-level skills and were more aware of new technology.

Chartered Institute of Public Finance and Accountancy (CIPFA) property networks manager David Ayre advises on asset management for highways.

Ayre said each county council had its own arrangement in terms of managing highways, but the reality was that very few had the capacity to deliver all functions in-house. He explained that most authorities had some sort of “mixed economy” as the cycle of work went through “peaks and troughs”, and it was not viable for councils to specialise because the ongoing need might change.

However, Ayre noted that there was a trend of councils wanting to review their outsourcing models when construction giant Carillion collapsed in 2018. The firm went under with more than 250 contracts in the pipeline, which made it difficult for public-sector clients to then deliver infrastructure projects.

Ayre said an in-house team would have the benefit of being able to deploy a team during emergencies and provide a certain degree of insulation from the volatility of the market.

In addition to global inflationary pressures plaguing the industry, there are local versions as well. Ayre said big schemes in local regions, such as HS2, for example, could drive up the demand for and price of skills in an area.

In October 2021, the highways maintenance arm of Eurovia replaced Kier on its highways contract with Surrey County Council after 11 years.

Kier referred Construction News to the council when contacted for comment.

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