Prospect of Devon bringing road maintenance in-house

Devon could opt to bring one of the largest services it contracts out back in-house by hiring staff to oversee road maintenance

The agreement with Milestone Infrastructure, which carries out work on behalf of Devon County Council, ends in March 2027 and it is not possible to extend the contract.
The council said by that time it will have had a value of over £400 million since it began in 2017 and is “one of the largest contracts the council commissions”.
Five possible options for delivering road maintenance services were put before the county’s corporate infrastructure and regulatory services scrutiny committee this week, which voted on them in order of preference.
Its favoured option by far was to bring the service in-house, which would mean the council employing a range of staff from managers through to operational workers who carry out tasks such as filling potholes.
The committee, however, is not a decision-making body, and has therefore simply advised the cabinet of its preference. The latter could choose to ignore this advice and choose an alternative arrangement.
The other options were repeating the existing set-up by contracting out services, launching an arms-length company, creating a joint-venture company, or having a dual system whereby some work is carried out by council staff and some contracted out.
Some councillors on the committee were unhappy with the quality of some  highways’ repair work carried out by contractors and that in-house staff could give it greater control.
“It may be a better way of making sure the works are done by splitting the area into four regions and having dedicated teams on each,” said Cllr Jeffrey Wilton-Love (Conservative, Bideford West & Hartland).
Green councillor Jacqi Hodgson (Totnes and Dartington) said the situation with the county’s highways is “an awful mess”.
She continued: “The whole issue of commissioning services and the choices made politically decades ago is getting worse and we are at the mercy of bad political decisions,” she said.
“It costs money [to outsource] as we put people in the middle who put distance between us and the delivery of the service and officers pick up the brunt of complaints but are least able to do anything about it.
“This is an opportunity to change that system, and taking it back in-house is the strongest thing we can do as it will as we will know exactly what is going on.”
Cllr Yvonne Atkinson (Labour, Alphington & Cowick) suggested that if a government procurement service was used, then it could bring down the cost of the in-house option.
In their report officers said they believed the option where all services were carried out by in-house staff potentially has the most expensive ongoing annual costs at between £4.2 million and £5.7 million, and also comes with some of the highest risks.
By employing staff, the county council would become responsible for their pension contributions, which could be significant.
“With the in-house options, the workforce and staff would be auto-enrolled into the Local Government Pension Scheme, in which the employer contribution rate is significantly higher than the typical market contribution rate for a construction company pension scheme,” a report to the committee said.
Devon’s chief executive Donna Manson said at present, the county’s highways team, which oversees the contractor, was much smaller than other authorities. She also queried whether councillors had been made fully aware of the potential costs of hiring the required number of staff.
“If not, I would suggest members are aware of the risks,” she added.
Cllr Wilton-Love noted that the committee’s feeling seemed to go against what officers suggested would be least risky or least costly.
“But the strength of feeling here is that we want it to be in-house, and if cabinet chooses to follow our opinion, then it is a question of us taking it by the scruff of the neck and making it work,” he said.
“While the set-up costs might be slightly higher, if that is the choice we make we mustn’t be afraid of the risk, and we must eliminate the risk element by delivering the job.”