Highways Agency Annual Report and Accounts 2011-2012

Summary of our Performance: SECTION 2
Section 2:
Affordable
and efficient
delivery
Living within our
means
Following the Spending
Review 2010, we were
set the challenge of
continuing to manage
the delivery of our
programme effectively,
remaining focused on
our priorities, whilst
driving out costs to
deliver within funding
levels that reduce from
£2.6 billion in 2010-11 to
£2.0 billion in 2014-15
(excluding depreciation
and annually managed
expenditure (AME)).
Three key programme
areas were identified
where we committed to
lower levels of funding
and the Spending
Review assumed these
reductions.
The three key programme
areas were:
• Major Schemes, where we
agreed to start a defined
programme of 14 schemes
by 2014-15 within a funding
envelope that delivered at least
20 per cent efficiencies.
• Traffic Management, where we
committed to a broad range of
operational improvements to our
Traffic Officer Service and other
Traffic Management functions
whilst also cutting costs by 20
per cent by the end of 2013-14.
• Maintenance, where we expect
to reduce annual spending
from an average of over £900
million to an average of about
£700 million over the four year
Spending Review 2010 period.
Our performance in 2011-12
sets us on a good trajectory to
achieve the required savings
whilst delivering a high level of
service. More detail on how we are
progressing on delivering these
efficiencies can be found in this
report.
The importance of investment
in the strategic road network
infrastructure was emphasised
in the Chancellor’s Autumn 2011
Statement which announced a
significant tranche of investment
to drive economic growth in
this country. This included an
increase in funding for transport
infrastructure, which is in addition
to that announced in the Spending
Review.
Our performance in
2011-12
Our total budget for 2011-12 was
£3,954 million and was divided into:
• Departmental Expenditure Limit
(DEL) budgets which are the
firm budgets (resource and
capital) set in the Spending
Review 2010.
• Annual Managed Expenditure
(AME) budgets which apply
to items that are volatile and
which the Agency could not be
expected to absorb within the
firm DEL plans.
A segmental analysis of our 2011-
12 expenditure is included at
Note 2 to the accounts. The most
significant segments are:
Maintenance: The infrastructure
of the strategic road network
is one of the most valuable
single public assets, and
maintenance of it consumed a
high proportion of the Agency’s
spend in 2011-12 (over 33 per
cent of the total DEL expenditure
excluding depreciation). The work
undertaken includes replacing
and maintaining surfaces, bridges
Spending Review 2010 Programme funding and Growth Review
Departmental Expenditure Limit (DEL) budget excluding depreciation
£m
3,000
2,500
2,000
1,500
1,000
Resource DEL
Capital DEL SR10
Capital DEL Growth Review
500
2011-12 2012-13 2013-14 2014-15
Spending Review 2010 period
Highways Agency Annual Report and Accounts 2011-12