Outsourcing highway maintenance

Road iStock 000012245935XSmall 146x219James Fawcett examines the challenges of outsourcing highway maintenance in the new world of a ‘risk-based approach’.

With continued pressure on local authorities to deliver savings, the outsourcing of services to external contractors is likely to be here to stay. But with that comes a risk of reputational damage, increased claims and ultimately financial loss for the authority where there are deficiencies in delivery.

Highway inspection and maintenance is an area that is frequently (and increasingly) outsourced by authorities and although the practical operation of the regime might rest elsewhere, the duty to maintain the highway under section 41 of the Highways Act 1980 is non-delegable and remains squarely with the highway authority. The authority cannot escape its obligations. 

This increased outsourcing is against the background of a shift in highway maintenance, with the introduction of a revised Highways Code of Practice, reinforcing the need for synergy between authorities and their contractors. The Code (which highway authorities are required to adopt by October 2018 at the latest) provides genuine opportunity for authorities to implement a regime that is tailored to the specific authority’s needs and challenges – for the first time there is reference to ‘affordability’ within the Code, with a clear expectation that a collaborative approach is adopted between departments of the authority, with neighbouring authorities and with contractors. If there is a breakdown at any stage the authority will be vulnerable to criticism and the ability to defend any civil claims will be diminished – particularly as a ‘risk based approach’ is at the heart of the Code, with authorities required to adopt a dynamic method of risk management on the highway network.

It will be a challenge for authorities to embed the revised Code, and any change in procedure that is implemented as a result of the Code, in highway inspectors and maintenance contractors who sit outside of the organisation. This is though essential if authorities are to continue to successfully rely on the statutory defence to highway claims under section 58 of the Highways Act – if it can be shown that the authority “has taken such care as in all the circumstances was reasonably required to secure that part of the highway to which the action relates was not dangerous”

There will be a clear change in direction, away from the prescribed, very specific, guidance in terms of intervention levels for defects, inspection frequencies and repair times, which many highway teams currently have the benefit of. This will undoubtedly result in greater scrutiny by the courts of the process followed and decision making of the highway inspector. If inspectors are not adequately prepared they will be vulnerable and that vulnerability will transfer to the authority if a claim is brought.

So what can local authorities who outsource highway maintenance do to mitigate the risk?

  • Work closely with contractors who provide highway maintenance and inspection functions – adopt a collaborative approach, immersing the contractor in the process and ensuring that it is properly disseminated and followed by inspectors.
  • During any procurement process ensure that prospective partners have an understanding of the requirements of the new Code and, importantly, that the highways team are adequately trained and competent in delivering.
  • Insist that appropriate indemnity clauses are incorporated in the contract, transferring the liability for failures to the contractor – not only to mitigate financial risk to the authority but also as an incentive for the contractor to comply with the requirements (allowing the authority to continue to satisfy its statutory duty).
  • Revisit existing agreements and contracts that are in place to ensure they remain fit for purpose – the changing regime might justify amendment of current arrangements and that should be considered at the earliest opportunity with contractors and varied where needed.

Of course, it is more than simply ensuring there are appropriate terms and contractual indemnity in place. That indemnity will only come into play when an accident has occurred, an individual has suffered damage and the claim has succeeded (so the authority has breached its statutory duty). Authorities will certainly want the contractual terms in place with contractors to be water tight, but the ultimate aim must be to fulfil their obligations as a highway authority through effective working with and by external providers.   

James Fawcett is a partner at Browne Jacobson. He can be contacted on 0115 908 4874 or This email address is being protected from spambots. You need JavaScript enabled to view it..