Asset Management Plan - Newcastle City Council

Decision Making7.0 Decision Making7.1 OptimisationBy carrying out analysis to find the most cost effective means of managing theongoing demands placed on the asset and by identifying the optimal regime forthe maintenance of the network it is possible to select, from a range ofacceptable options, the ‘best’ option for managing the asset.In order to undertake this ‘optimisation’ process it is important to firstly identifythose options, which are clearly unacceptable for any reason, be it political,social, environmental or economic, and to ensure that robust and fully inclusivelevels of service are produced so that the ‘optimisation’ technique can be utilisedeffectively.Initial optimisation can be carried out for a single asset or service in order toselect the best option in the absence of any other constraints. A more high-leveloptimisation takes into account the competing demands of the different servicesand assets across the network.7.2 Budget ConsiderationAt present the major funding for the management of the highway asset withinNewcastle comes from three main sources:o Revenue funding – for day-to-day and planned highway maintenance(renewal), running costs, energy etc. This is allocated annually based ondefined service standards and contract costs. It is also dependent on thegovernment’s grant allocation based on the Relative Needs Formula(RNF) for highways maintenance identified for the Council and theCouncil Tax settlement.o Capital borrowing – f for planned highway maintenance (renewal). Thisis allocated annually by government through the joint Tyne and WearLocal Transport Plan (LTP).o Other specific allocations may be made from time to time. Newcastle CityCouncil have been successful in attracting investment from other sources ofthird party funding such as the Single Regeneration Budget (SRB), EuropeanRegional Development Fund (ERDF), Private Developer contributions andPrivate Finance Initiatives (PFI).Details of how these budgets are used within each asset grouping are set out inthe lifecycle plans.7.3 Asset Deterioration ModellingA possible future method of determining optimisation and budgetary constraintsis through the use of Asset Deterioration Modelling, which although being a46