(a)

the Council was successful in winning £8m bid from Government for highways maintenance; Dan Sharpe was congratulated in helping to achieve the bid;

(b)

the Council’s contract with Amey LG Ltd for highways services had been extended for a further two years until March 2017; the contract was initially awarded in 2008 for a seven year term covering highway maintenance, network management and design and delivery of improvement schemes;

(c)

approximately two years ago a review of the service was commissioned by the Strategic Director for Place, the following areas were focused upon: cost components, direct fee schedule, information systems, scheme development and financial procedures and systems. Scheme development was considered good practice however the other four areas required improvement; measures were put in place to address concerns where required;

(d)

auditors previously highlighted concerns regarding the hourly rate calculation for some members of staff; incorrect allowance calculations could result in the Council either be under or over charged. Hourly rates for each member of staff had been agreed and were reviewed periodically;

(e)

auditors raised a query regarding the possible overlap of support provided by Amey’s local management team and that provided in the central team in Oxford; Amey charged a fee of 8.81% on works delivered through the contract including management, accounting, HR and IT support. The query involving one individual being listed as IT in the hourly rate calculation was instead a GIS technician working locally on the Plymouth contract;

(f)

with regards to concerns relating to information systems, Amey provided the Council with access to their financial systems SAP via two user accounts to assess costs incurred on projects. These user accounts were inadvertently suspended by Amey’s IT team; interim arrangements had since been put in place as new accounts were issued via access to an Amey computer. Further improvements were expected with the proposed co-location of the Council and Amey and by reinstating direct access via the Council’s IT network;

(g)

auditors previously noted inconsistencies in the lump sum fee percentage applied to certain schemes in different years; it was explained that different fees had been applied to works in different financial years which resulted in a different value of works delivered in each year;  this was subsequently changed so that fees were applied to individual projects irrespective if they span different financial years;

(h)

auditors noted a large number of disputed costs whereby the Council had not paid Amey;  the majority were small in value and generally related to where Amey had exceeded the agreed estimate for work undertaken.  A settlement of outstanding disputed sums had since been resolved between Amey and the Council and an early warning and scheme closedown process was reinforced to ensure that these problems didn’t continue to occur;  these changes were incorporated as at 1 April 2015;

(i)

overall the Audit has been well received and prompted improvements from both parties.

(j)

officers were confident that disputed costs between Amey and the Council had been resolved; officers confirmed they would also make a more concerted effort to deal with any issues when they arose;

(k)

a consultation was held a year ago during a Department for Transport Roadshow in which ideas relating to top-slicing the integrated transport budget was proposed; the Council was successful in receiving £8m from a bid submitted. The money would be used to free up revenue to concentrate on maintenance of lesser roads in the city;

(l)

the council had gained overall despite the budget being top-sliced by approximately £200,000 to £300,000.