The Midlands Highway Alliance (MHA) is a group which formally launched in July 2007 as a collaboration of seventeen councils and the Highways Agency who share a common goal of improving performance and making efficiency savings in the delivery of highway services by working together.
The partnership comprises the following authorities: Derby City Council; Derbyshire County Council; Leicester City Council; Leicestershire County Council; Lincolnshire County Council; Milton Keynes Council; Northamptonshire County Council; Nottingham City Council; Nottinghamshire County Council; Peterborough City Council; Rutland County Council; Staffordshire County Council; South Derbyshire District Council, and; The Highways Agency.
The objectives of the Midlands Highway Alliance are to:
- Establish and develop collaborative procurement frameworks to secure the delivery of major highway capital schemes, medium size highway schemes and professional services;
- Establish, implement and develop a continuous improvement model for highway term maintenance to achieve convergence to best practices;
- Embed partnering principles and construction best practice in all its work and throughout the supply chains, to optimise commodity acquisition.
Leicestershire City Council acts as the lead authority for the MHA, whereas each work stream is led by a different authority to ensure that the improvement activity is owned and embedded by local authorities themselves and that the learning and practices are sustainable.
At July 2009, savings of £2.42 million had been achieved by the Midlands Highway Alliance. It is estimated to save the region £16.75 million across highways maintenance and improvements by 2013.
At the heart of this unique venture is the regional procurement and delivery of highways maintenance and capital works through framework agreements. The aim is to: make effi ciency gains; speed up procurement; deliver schemes to a higher standard; and best practise. The MHA was originally ‘pump primed’ by the regional East Midlands Improvement Partnership with project support from Constructing Excellence’s consultancy arm, the Collaborative Working Centre (CWC).
It is an Unincorporated Association by Agreement. The original eleven members. All signed an agreement pledging their ongoing commitment to the work of the MHA. Since then, three other local authorities have joined and others are in discussion about joining.
Financial efficiencies from collaborative working
The MHA has so far identified savings for its members of £16.8 million up to the end of June 2010. This is a staggering 6720% return on investment on the original £250,000 RIEP pump priming funding.
The largest contributor to that is the medium schemes framework through members avoiding individual scheme procurement costs, saving up to £100k per scheme. After around 30 months of operation, these frameworks have delivered 35 schemes with a total value of £84 million.
This work stream acted as the original catalyst for the Alliance’s formation in 2007 and continues to underpin the Alliance as it moves forward. It has been the single-most successful work stream and is already delivering huge financial benefits to the members. By employing early contractor involvement, greater cost certainty is achieved and savings realised. The efficiency savings for 2010/11 is targeted at around 6% per scheme.
Mutual benefits to the contractors have also been realised, with an estimated saving of £75,000 per scheme on procurement processes. In commodities, salt has been procured jointly via ESPO with savings of £700k over three years (East and West Midlands). This will increase as additional authorities join the scheme. Professional services savings are largely from shared procurement through the 3 Counties Alliance Partnership (3CAP).
Recordable savings from collaborative working
Quantifying the savings and sharing the knowledge has already commenced for the works undertaken in the medium schemes framework and 3CAP contracts. Specific mechanisms have been put in place to measure savings based on careful consideration and analysis including an online system for tracking overall performance. The system shows the financial impact in terms of cost and payback and also facilitates analysis of non-cashable impacts on staff (organisational impacts) and externally (community impacts).
There is also a facility to measure against National Performance Indicators. As the MHA is a pioneer in this field, similar data is not readily available in a comparable form. To ensure that the performance of the MHA is recorded in an objective and consistent way, it has an agreed savings evaluation method.
Based on the current level of expenditure, £27 million of efficiency savings under the MHA could be delivered over the next four years.
The Department for Transport has made additional funding available to the RIEPs to enable the MHA’s approach to be undertaken in other regions of the UK. The MHA has been developed to allow all the authorities to remain flexible and responsive. This means that the individual requirements of their councillors and communities can be addressed, whilst also providing the optimum partnership solution for accommodating each others’ individual and joint needs.