STAFFORDSHIRE CONNECTED ROADWORKS

REGULATORY ASSESSMENT

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INTRODUCTION 4 RESEARCH PROGRAMME 5

INDUSTRY OVERVIEW 6

BARRIERS TO JOINT WORKS 8

RECOMMENDATIONS TO SUPPORT MORE JOINT WORKS SCHEMES 12

CONTENTS

APPENDICES

APPENDIX 1 LOCAL AUTHORITY REGULATION 14 APPENDIX 2 WATER AND SEWAGE REGULATION 16APPENDIX 3 TELECOMMUNICATION 19APPENDIX 4 ENERGY REGULATION 20APPENDIX 5 ROAD (HIGHWAYS ENGLAND) AND RAIL SECTOR REGULATION 24APPENDIX 6UKRN SURVEY QUESTIONS 25

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Although street works management initiatives exist in the UK, take-up is patchy and there are barriers to their use. The Staffordshire Connected Roadworks programme sets out to support the expanded implementation of joint street works by teaming technology and processes in meaningful new ways.

Funded by Innovate UK over an 18-month cycle, the £650,000 project collects, maps, and analyses forward planning utilities’ data to boost the number of joint street works, to improve coordination, and to cut the cost of disruption arising from street works in Staffordshire. It does this in a holistic way by:

• Developing an interactive mapping tool and a central data hub

• Promoting fruitful collaboration between utilities and local authority

• Identifying joint street works opportunities and regulatory barriers to their adoption

• Making the evidence-based business case for joint street works

With an operational focus on Streethay among other areas of Stafford, the programme brings together multiple partners including Amey (project lead – data and communications), CSC (mapping platform), Staffordshire County Council (highways management), Future Cities Catapult (research plus business case in partnership with Staffordshire University), and Tenshi Consulting (digital outreach, including challenge-based engagement with local SMEs).

As part of the Heineken project, the Future Cities Catapult has been working in partnership with Staffordshire University and Staffordshire County Council to deliver the business case research programme to provide market analysis and evidence of economic impact. Part of this work has been to assess the impact of regulations on the development and delivery of joint works schemes promoted using the Heineken model.

Early in the programme it became clear there are no specific regulations prohibiting the development and delivery of joint works schemes or the use of the Heineken tool. However, there are many complex and interlinked drivers in the highways management and streetworks industry which, when they touch the ground, do have a negative impact on the propensity of works sponsors to develop joint works schemes individually and at the programme level. The wider barriers beyond direct regulations and rules and potential solutions are set out in this document.

The Heineken project itself is a collaborative 18-month research and development project part funded by Innovate UK. The project has designed, prototyped and trailed in a live working environment a new highways network management tool for planning and coordinating streetworks and roadworks using an innovative smart city platform developed by CSC.

The technology allows the analysis of a diverse set of data sources including future plans and maintenance information, presenting the results on a map to allow the planners to see the context in which the works will be carried out. The platform will highlight where it thinks opportunities for joint works could be, allowing the planners to scale the number of delivered joint works beyond what they can achieve manually today.

The main aim of the Heineken project is to promote new ways of working to reduce the cost of delivery of core city services, reduce the impact on the environment and the local economy as well as reducing disruption, and inconvenience to the citizen.

The smart city platform is part of a coordinated approach of activities in Staffordshire to promote more joint works schemes. This paper examines the role of regulation in the development and delivery of joint works, discussing the barriers and potential solutions for industry and government to consider.

INTRODUCTION

OVERVIEW

A key element of the Heineken project is the research work stream being delivered in partnership with Staffordshire University and Staffordshire Council. As part of this work we are engaging with DfT, NJUG, UKRN and other key stakeholders in the industry. The research programme has 3 interlinked outputs:

• An Economics White Paper that will set out the market context and economics case for joint works planning vs. current practice.

• A business case for local authorities to use as guidance for taking forward the Heineken model in their own jurisdictions.

• A Regulatory Assessment which maps the regulatory context for street works activities and assesses the impact of regulations on developing and delivering joint works schemes.

AUDIENCE

The principle audience for this document are the regulators, industries bodies, utility companies, central government, local government and contractors.

OBJECTIVES

This assessment has two objectives:

• Conduct a review of current regulatory frameworks whilst identifying barriers that would impact deployment of this solution at scale across the UK and suggesting recommendations where possible

• Develop recommendations to government, industry, regulators and local authorities for changes to the regulatory environment to support joint street works planning and delivery.

RESEARCH METHOD

The research has been conducted though desk research, bilateral interviews with industry leaders from a cross section of companies and government departments and though a survey of the economic regulators delivered in partnership with UKRN. In addition, a round table event was held at the Future Cities Catapult in November 2016 to present findings on barriers and discuss the solutions to supporting more joint works. This outcome of this round table forms the basis of basis of the recommendations listed at the end of this paper.

RESEARCH PROGRAMME

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Street works in the UK are defined as works carried out by statutory undertakers, or licensees under section 50 of New Roads and Street Works Act 1991 (NRSWA), or their contractors, to install, inspect, maintain, repair or replace apparatus under the street surfaces

These statutory undertakers include ca. 200 organisations that include:

• Utility companies including telecom companies

• Licensees under section 50 of the New Roads and Street Works Act 1991 (NRSWA)

• Contractors

Road works primarily include works carried out to repair or improve the highway including footways, pavements and street lighting

The strategic road network (motorways and major A roads) in England is managed by the Highways England (HE)

At present, the responsibility for co-ordinating street works relies principally on the pro-activeness of the local highway authority

This is due both to their regulatory function, in accordance with the NRSWA, and a lack of accountability to the public for other infrastructure owners STATUATORY UNDERTAKERS

The road network of local highway authorities often represents their most valuable and largest asset. However, local authority duties must be balanced against the statutory obligations of statutory undertakers. Statutory undertakers, or those in possession of a street works licence (under section 50 of NRSWA), have a legal right to carry out street works.

Statutory undertakers are generally those companies that supply water, gas, electricity and telecommunications or control sewerage, but there are a few less obvious ones, for example London Underground, which may need access to equipment for communications or power.

The utility companies have statutory obligations to provide a supply or service, and these are closely monitored by the utility regulators, Ofwat (water industry), and Ofgem (gas and electricity industries) to ensure that the required level of service is maintained. This will include restoring supply, as well as ensuring new customers are connected within certain time frames.

Ofcom (regulator of telecommunications) places a universal service obligation on BT across the UK (except Hull, where it is Kingston Communications), to meet all reasonable requests for service. Under legislation customers of the electricity, gas or water companies, subject to certain exemptions, may be entitled to compensation, if a company fails to meet these guaranteed standards of performance. The operators of a gas network also have obligations under Regulations enforced by the Health and Safety Executive. These require operators of gas networks to carry out certain works within a specific time or to replace certain types of apparatus within a specified period.

Currently, the gas industry has a programme to replace all iron mains within 30 metres of properties, over 30 years, from 2001, with highest priority given to that apparatus at greatest risk, based on an agreed safety case to assess priorities. The priorities may change to reflect an escalation of risk based on either new information about specific types of pipes or apparatus, or as result of incidents involving a specific pipe.

INDUSTRY OVERVIEW

FIGURE 1 – SECTOR OVERVIEW

FIGURE 2 – UK STREETWORKS ECOSYSTEM

Currently, street works are largely carried out by a large number of organisations without co-ordinating between each other leading to unwanted road disruption and high costs that can be potentially saved by effective partnerships between different stakeholders

CUSTOMERS

REGULATOR(Ofwat)

REGULATOR(Ofgem)

REGULATOR(Ofcom)

REGULATOR(Dft)

UNREGULATED

PRIVATEDEVELOPERS

HIGHWAY AUTHORITIES

TELECOMSGAS & POWER

UTILITIESWATER & SEWAGE

UTILITIES

Sub—Contractor

Sub—Contractor

Sub—Contractor

Sub—Contractor

Sub—Contractor

Sub—Contractor

Sub—Contractor

Sub—Contractor

CONTRACTORCONTRACTORCONTRACTORCONTRACTORCONTRACTORCONTRACTOR

STREET WORKS

SECTORS SUB—SECTORS EXAMPLES

UTILITIES

Water — Distribution

Energy — Distribution

Regulator — Water

Regulator — Energy

Thames Water, Severn Trent

SGN, NAtional Grid

Ofwat

Ofgem

ROADS

Operators

Contractors

Regulator

Highway Authorities

Amey

ORR, Deptt. Of Transport (DfT)

TELECOMTelecom, Telecom Infra.Regulator

Vodafone, AT&T, BT

Ofcom

DEVELOPERSResidential / HousingCommercialPlanning

Baratt, Taylor Wimpey

Berkeley Commercial, Exemplar

Arup

WASTESewageRegulation

Thames Water, Wessex Water

DEFRA

LOCAL AUTHORITIES Local councils Bristol City Council, Strafford City Council, TfL

ASSOCIATIONS — NJUG, HAUC

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INTRODUCTION

For joint works planning to be successful, actors commissioning and delivering works must align their activities at the programme and project or works scheme level. Joint works schemes potentially introduce new factors into decision making process for organisations contemplating a joint works scheme.

In making this decision, utilities may have to consider several trade-offs which could potentially have cost implications as part of their wider asset management and service delivery plan.

The trade-offs could manifest from several sources either directly or indirectly linked to the regulatory framework they operate within. Additionally, the need to secure asset resilience can prove a challenge along with reputational concerns about asset condition.

Whilst there is a pressure in complying with regulatory targets, utilities respect and value the need to reduce occupation and delay and in more recent years the value to their organisational reputation on customer satisfaction and recognition when delivering joint works on the ground.

SUMMARY FINDINGS – UKRN SURVEY

The aim of the research survey with the regulators was to map the landscape in terms of how different regulatory regimes may shape these different trade off’s, to understand current and potential incentive solutions that may support this type of model and to provide context for how to structure further iterations of the Heineken model. A summary of each regulators standards of service requirements for connections to utility networks are contained in appendices 1-5 at the end of this report.

• There are no regulations or policies in any of the regulatory frameworks for the statutory undertakers that prohibits the planning or delivery of a joint works scheme.

• In Northern Ireland, the multi-sector role of the Utility Regulatory which combined regulation of the electricity, gas and water sectors under one roof – as well as a smaller geography – has resulted in the development of long-standing relationships. There was a feeling that joint works are easier to coordinate under this regime.

• The Ofgem Incentive on Connections Engagement (ICE) was established to encourage joint works approaches especially around larger sites.

• In the energy sector, Ofgem encourage the Distribution Network Operators (DNO’s) to invest strategically in maintaining and improving the network – this should involve considering joint works schemes.

• Differing Standards of Service requirements between sectors could make some joint works schemes trickier and change prioritisation of works activity at the scheme level.

• Price control, customer satisfaction and business planning processes could be the place to intervene to further embed joint works principles

• Health and Safety regulations not seen as a hindrance joint works schemes.

• Works schemes in the telecommunication sector are market led. There are a long list of over 100 companies now registered with Ofcom who can carry out streetworks. Ofcom does not have a standard of service for connections regulation framework in force.

SUMMARY FINDINGS – INDUSTRY & REGULATOR ENGAGEMENT

To complement the UKRN survey of the regulators, interviews with industry and a survey were delivered by Staffordshire University. The aim was to understand their perspective around the impact of regulations on formulating and delivering joint works schemes.

In terms of factors that are reported as more common barriers to more collaborative working there is quite a difference between factors that are always a barrier, those that are only a barrier sometimes and those that are rarely/never a barrier.

• Lack of awareness of other works planned in the area is cited by 28% of respondents as always being a barrier to more collaborative works

• 25% reported that behavior/attitude of other was always a barrier

• 20% report that insufficient incentives was always a barrier

• 20% report that timescales was always a barrier

• Although different objectives are only reported by 15% as always being a barrier, a further 41% report this as being a factor most of the time.

• Fines and penalties were the least likely factor to be a barrier to joint working

In addition, the Future Cities Catapult has engaged with several utility companies and local authorities in other cities. The summary analysis below is a combination of inputs for companies operating in different part of the country, industry bodies and local authorities and survey findings.

• The most common problems associated with collaborations cited by two-thirds of respondents to the e-survey was the difficulties cooperating with another company and unclear responsibility/ liability and the allocation of risk. There is concern about the liability attached to being the lead contractor, particularly for those that are undertaking smaller works. Although there shouldn’t be additional HSE risk working on same site since all contractors should be working to Red Book, issues might arise around reinstatement works and who takes liability. There are also increased risks, such as increased risks of overrun resulting in a delay or penalty associated with collaborations, and concern that it is the organisation that takes out notice that is likely to be penalised by the local authority for delays.

• In many cases, there is limited flexibility in many cases to change timing of works to fit with 3rd parties’ plans. Some consultees highlight that within about one month of a works planned start date, the nature of the supply chain means that it is impossible to change the actual start date. For example, in street lighting, the undertaker

needs to inform the electricity company that they plan to work on a site 20 days before work starts. Similarly, with traffic management lead in times, the amount of notice required for traffic management can vary significantly and some local authorities require quite warning.

• It can be difficult to influence the management and coordination of large scale infrastructure roll outs being led by 3rd parties and asset owners. Asset management plans illustrate that the end customer for the works values a fixed plan. In these cases, it can be difficult to move projects contractually because, although some assets might need to be replaced in the future, it is difficult to bring projects forward too early, for example it may be inefficient to replace infrastructure too early.

• Resource constraints within some highways authorities means that there are not always sufficient resources to identify opportunities to collaborate, with the focus being on meeting regulatory requirements and avoiding conflicting roadworks – there is often little resource left to strategically plan works across years. This issue is compounded by many highways authorities operating an annual cycle for planning their highways works further restricting the planning horizon required for joint works schemes.

• For some utilities, such as telecoms, a works start date is not known until shortly before the works commence. Works are not planned too far in advance because the precise location of cabinets is not known and the start date for works is often reliant on planning approval. This results in insufficient lead in time to arrange collaboration Works often requires a quick turnaround once planning is approved to ensure that connections are provided in the time allotted by the regulator.

• The telecommunication industry is very competitive with high levels of secrecy to protect commercial dealings. Unlike the monopoly industries, there is a distinct hesitation about openly discussing works in the presence of competitors.

• If an organisation must move a planned work to facilitate collaboration, another work is also likely to have to be moved to replace it. Therefore, the impact on other works projects of prioritizing joint works is a

BARRIERS TO JOINT WORKS

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strong influencer in works programme decision making. Contractually some organisations get penalised for late jobs, but no incentive for jobs delivered early, therefore no in interest to move works as part of contract.

• In some local authority areas, a too restrictive programme planning process can make it difficult to organise collaboration. For example, where a planned works is identified as clashing with another planned works, the notice can be rejected, rather than exploring if both works could be undertaken collaboratively.

• Some of the utilities do not always have specific long term plans for their future works. In the electricity sector, although major projects can take 12 months to plan, the future works planning process for other projects can highlight what needs to be done but not what actual works will take place, for example, emergency projects take priority.

• At the contractor level, the construction and works supply chain can play a role in hindering the effective planning and management of joint street works. Issues include entrenched attitudes and behaviors in scheme delivery, adversarial practices and a highly competitive sub-contractor market and a high degree of risk aversion to preserve margins.

• The key mechanism for planning joint works are local authority network planning meetings with the statutory undertakers. At these meetings, attendance in terms of seniority can vary from place to place and meeting to meeting. This can result in an ineffective dialogue between the council and utility companies making it harder to plan and programme joint works schemes which can require long lead in times and senior decision makers input from across multiple actors.

• In the electricity sector, the contractor has 28 days to make a connection from receiving an order as set by the regulator and in the water sector companies have 21 days to deliver the connection before incurring fines. This limits the flexibility and time to arrange a collaboration. The regulations are called the Standards of Service regulations and provide short timescales to deliver a connection for essential utility services. The arbitrary nature of the application of fines does not encourage joint working or act as an incentive to avoid disruption to the road network. The main the impact of these regulations is setting out priority works that must be completed within a given period, and the timescales for new connections which limits the ability to develop a joint works.

• There can be inconsistencies between local authorities in the amount of notice they require for temporary traffic management measures which may impact on the ability to plan joint works schemes. This is compounded by the standards of service regulations which together can run into conflict and generate complexity in programming a joint works scheme making less attractive pursue and potentially less cost effective.

• Customer satisfaction scoring within the performance measurements for regulated industries are focused on households and businesses. As such, there is potential for some overlap between service users and those impacted by works, but the impact of the works on society is not directly measured. Therefore, although it is not an explicit question on the customer satisfaction survey, joint working can help regulated industries to be seen in a positive light as in general customer satisfaction is critical.

DEVELOPER SITES AND NEW CONNECTIONS

Securing the delivery of large scale property and regeneration projects is often a common goal of local and national government. However, large development sites often require simultaneous investment into local infrastructure to service new homes and businesses. New connections can range from providing a new service to a single property (e.g. broadband) to servicing large housing developments with hundreds of new homes which may require large investments into reconfiguring mains sewers, providing additional electricity substations and other services.

There is a clear opportunity for collaborative working at new development sites, such as housebuilding or business parks, because the buildings will need new connections to a range of utilities and for larger developments there can be road building required, such as new access routes. The volume of these works is huge, for example, the electricity sector expects to do 100,000 connections per year. However, facilitating collaborations for new connections face some significant challenges: • It is the developer that decides who does the

connections work. Therefore, although not statutory, it is often the developer that has the role as the coordinator of streetworks associated with connecting their development. However, industry consultees suggest that developers do not necessarily have sufficient understanding of the extent of the works associated with connecting new services to development (existing infrastructure systems capacities, costs of upgrades and timings required for planning and delivering) and the potential savings associated with undertaking these works at the same time (this can be difficult to model which a range of 3rd parties required to provide inputs).

• Works to provide new connections can be undertaken by any approved contractor that has the relevant certifications. Therefore, there are a number of contractors that are not typically undertaking maintenance and infrastructure works and therefore do not have regular meetings with the local authority to discuss works. There is also uncertainty as to who will be contracted to do the work, since many companies can be asked for a quote to do the work but only one will be commissioned. Therefore, there is limited incentive for firms to provide infrastructure prior to getting commissioned by a developer

• Developer may not have sufficient funds to commission all connection works at same time. This is because not all developers are cash rich and development finance will be directed towards the construction of the development itself rather than utility connections. The utilities will only deliver their works when an order is placed, so it dependent on the developer to commission the work. Therefore, it is sometimes the intention of the developer to stagger work, particularly for small building firms, due to cashflow, without an awareness of the consequences for disruption to the road network. The cash flow of smaller residential developers is dependent on transactions for properties for sale on the open market.

• Short timescales to provide a connection. For example, in the electricity sector, the contractor has 28 days to make a connection from receiving an order as set by the regulator. As mentioned above, this limits the flexibility and time to arrange a collaboration – especially when the timing of orders placed by a developer is linked to financial events and transactions taking place in the open property market.

BARRIERS TO JOINT WORKS

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RECOMMENDATIONS TO SUPPORT MORE JOINT WORKS SCHEMES

RECOMMENDATIONS

The principle finding of this paper, in terms of the impact of regulation on the propensity of works sponsors to deliver joint works schemes, is that the combination of different Standards of Service requirements for new connections timing and local authority variations in Temporary Traffic Management requirements does make planning and delivering joint works schemes promoted by the Heineken model a challenge and in some cases near impossible, especially on some types of developer led schemes.

In response to this NJUG is currently working with JAG(UK) to put together a HAUC(UK) Guide on the respective requirements and the process utilities and authorities go through (or should go through) when planning and considering temporary traffic management proposals; the standards of service and best practice for TTM. This guide will provide the foundation for further work in this area and provide everyone in the industry and understanding of the regulations currently in force as a first step towards a potential simplification and harmonization.

During the research, many other barriers were highlighted by different parties which have been summarised in the previous chapter. Recommendations to overcome these barriers were also discussed and are set out in the following section:

• Large-scale property and regeneration schemes present opportunities for collaboration. New commercial and infrastructure investment models should be developed to provide finance required, when a developer cannot raise finance, to support wider infrastructure investments, building on the approaches developed at Ebbsfleet.

• Developers tend to enter discussions around connections too late in the process to deliver joint works schemes around their sites. Local Planning Authorities should use Planning conditions to secure early discussions with developers on their connections strategy. The use of planning conditions must be balanced with the need to deliver housing and other development as seamlessly and expeditiously as possible.

• Local authority network planning meetings are key forum for identifying and planning joint works schemes. However, often attendance at these meetings is not at senior enough level to provide information or make decisions about which schemes can be prioritised or delayed to support joint works schemes. Local authorities and statutory undertakers should take ownership and leadership at the corporate level in developing a programme of joint works schemes across an annual – 3-year planning horizon and ensure the network planning meetings are resourced accordingly to manage a programme of joint works across years.

• The Staffordshire Connected Road Works Platform has developed a smart city platform that pools works planning data from 3rd parties (statutory undertakers) across a local authority area. This supports a strategic approach to joint works planning. The business model to sustain the smart city platform and joint works requires collaboration between sectors and 3rd parties with data governance arrangements in place to support ongoing data sharing. There are examples in the heath sector of where sustainable financial models have been developed to provide the governance around data which should be explored to see if they can be applied to the highways management sector.

• Not all works schemes can be combined into joint works and in many cases, it may not be practical or desirable to do so. The deployment of the Staffordshire Connected Roadworks platform provides a way of sharing data between 3rd parties across a spatial area to identify compatible schemes and support network planning activities. For it to be effective, the platform needs to be combined with local authority leadership and alignment with incentives and other flexibilities, for example through avoiding penalties for late works if it is part of a joint scheme.

• In situations where the same contractor is delivering a number of works for different utility companies across the same spatial area it may make sense for a joint works scheme to be delivered. However, the contractual complexities of planning and delivering this can be prohibitive. To support more collaborations new procurement or legal contracting models that clarify responsibilities should be developed. New models should aim to create the right commercial incentives and structures in the industry to reduce risk and liability to collaborators and developing more multi-utility, joint works schemes. Further market analysis should be carried out to explore if the procurement of a highways and utility contractor framework could be developed for a local authority area with shared skill sets and streamlined contracts for frequently occurring joint works schemes.

• It can sometimes be tricky to develop a business case for a joint works scheme due to the complexities of estimating different costs and developing a shared financial appraisal. Further research should be done to develop business case tool for local authorities and statutory undertakers and other parties commissioning works to use to analyse and assess the business case of delivering a joint works scheme and a programme of joint works schemes running across years.

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Appendix 1

• The New Roads and Street works Act 1991 (NRSWA)

• The Traffic Management Act of 2004

• The Code of Practice for the Co-ordination of Street Works and Works for Road Purposes and Related Matters (2012)

The New Roads and Street works Act 1991 (NRSWA) as amended by the Traffic Management Act 2004 (TMA) requires all works promoters to notify or apply for permits for all works in the public highway. This legislation also promotes the need for improved planning and co-ordination of all works in the highway in order to reduce the impact of works on the road user and wider community. Street works are a devolved matter in Scotland and Wales.

Section 59(1) of NRSWA requires street authorities to; “use their best endeavours to coordinate the execution of works of all kinds (including works for road purposes and the carrying out of relevant activities) in streets for which they are responsible;

• in the interests of safety

• to minimise the inconvenience to persons using the street (having regard, in particular, to the needs of people with a disability)

• to protect the structure of the street and the integrity of apparatus in it.

In simple terms co-ordination is the effective sharing of information to enable works on the highway network to be undertaken in the most efficient and least disruptive manner possible.

The efficient co-ordination of street works is one of the most important aspects of street works legislation, benefiting authorities, undertakers and road users alike. There is a statutory duty for a street authority to co-ordinate works of all kinds in the highway [NRSWA section 59 England & Wales, NRSWA section 118 Scotland, The Street Works (Northern Ireland) Order 1995 article 19 and the Code of Practice for the Co-ordination of Street Works and Works for Road Purposes and Related Matters (hereby referred to as the Co-ordination CoP)].The Traffic Management Act of 2004 (TMA) allowed for the introduction of a number of measures intended to address problems associated with urban and interurban congestion on the road network. The aim of the legalisation is to balance the statutory rights of highway authorities and undertakers to carry out works with the right of road users to expect the minimum disruption from works.

The high level objective of the TMA was to equip both the Highways Agency and local authorities (LA) with the powers to tackle congestion. In a nutshell, this included the introduction of powers in four key areas:

• To provide for the Highway Agency to develop its role as a ‘network manager’, empowering Traffic Officers to manage incidents on the trunk road network;

• To require local authorities to appoint a Traffic Manager whose responsibility it is to keep traffic flowing on roads in the area;

• To provide for a new regulatory regime for utility companies’ street works; and

• To allow for more civil enforcement of parking and moving traffic offences.

The area of relevant for this piece of work is the 3 point to provide a new regulatory regime for utilities companies street works.

The Code of Practice for the Co-ordination of Street Works and Works for Road Purposes and Related Matters (2012)

The publication of the 2012 Code of Practice provided further relevant guidance in the following sections of NRSWA:

• Section 56(4) – the power of authorities to give directions as to the timing of street works

• Section 56A (8) – the power of authorities to give directions as to the placing of apparatus

• Section 59(3) – the duty of street authorities to co-ordinate works

• Section 60(2) – the duty of undertakers to co-operate with street authorities and with other undertakers

Street authorities and undertakers must adhere to three key principles:

• The need to balance the potentially conflicting interests of road users and undertakers’ customers;

• The importance of co-operation and regular communication between street authorities and undertakers;

• Acknowledgement that works programmes and practices may have to be adjusted to meet the statutory objectives of the co-ordination provisions.

It is essential that both street authorities and undertakers take these responsibilities seriously. Section 49 of NRSWA defines the term ‘street authority’. On publicly maintainable highways, the street authority is the highway authority and usually this will be the relevant local authority. However, some highways are the responsibility of others.

The Secretary of State for Transport is the highway authority for the motorway and trunk road network, which is managed on his behalf by the Highways Agency, to whom notices should be sent. Similarly, roads in the Royal Parks are the responsibility of the Royal Parks Agency acting on behalf of the Secretary of 11 Introduction State for Culture, Media and Sport. Network Rail is the street authority for highways between the level crossing barriers, and there are others. All of these distinctions must be logged appropriately in the Register.

Network management duty guidance 1

Authorities need to have regard for the Network Management Duty Guidance.1 The NMD requires local traffic authorities, usually the local highway authorities, to manage their road network to achieve – as far as may be reasonably practicable having regard to their other obligations, policies and objectives – the following objectives:

(a) securing the expeditious movement of traffic on the authority’s road network; (b) facilitating the expeditious movement of traffic on road networks for which another authority is the traffic authority.

This may involve the exercise of any power to regulate, or co-ordinate, the use of any road, or part of a road, in the road network (whether or not the power was conferred on them in their capacity as a traffic authority).

Under the NMD, local traffic authorities must establish processes, as far as reasonably practicable, to ensure that they:

• Identify causes, or potential causes, of road congestion or other disruption to the movement of traffic on their road network; and

• Consider any possible action that could be taken in response or in anticipation of such causes.

The processes should cover a wide range of activities, such as identifying and managing different roads or classes of roads, monitoring the road network, and the co-ordination and direction of works – which includes the management of an

authority’s own works for road purposes to minimise its impact on all road users. However, there is no requirement to identify or consider anything that appears to have only an insignificant effect (or potential effect) on the movement of traffic.

Other important considerations regarding Government Guidance is a Section 58 notice prevents utilities from digging up a road for a period (3 to 5 years) after resurfacing or reconstruction. In special cases utilities can dig up a road e.g. if there is an emergency.

LOCAL AUTHORITY REGULATION

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Every day, over 50 million household and non-household consumers in England and Wales receive quality water, sanitation and drainage services. These services are provided by 32 privately-owned companies in England and Wales. Since the water and sewerage industry was privatised in 1989 a regulatory framework has been in place to ensure that consumers receive high standards of service at a fair price. This framework has allowed the companies to invest more than £108 billion in maintaining and improving assets and services. The industry must also comply with national and European legislation.

Water Regulators

Department for Environment, Food and Rural Affairs (Defra)Defra sets the overall water and sewerage policy framework in England. This includes:

• standard setting

• drafting of legislation

• creating special permits (e.g. drought orders)

OfwatOfwat is the economic regulator of the water and sewerage sectors its primary focus is:

• protect the interests of consumers, wherever appropriate by promoting competition

• make sure that the water companies properly carry out their functions

• ensure that the water companies can finance their functions

• promote economy and efficiency

• contribute to the ac

• hievement of sustainable development

Environment AgencyThe environmental regulator of the water and sewerage sector. They are the principal adviser to the government on the environment, and the leading public body protecting and improving the environment of England and Wales. They work in partnership with a range of other organisations to reduce flood risk promote sustainable development secure environmental and social benefits.

Drinking Water InspectorateThe drinking water quality regulator. They check that the water companies in England and Wales supply water that is safe to drink and meets the standards set in the Water

Quality Regulations. They do this by: checking the tests that water companies carry out on drinking water and inspect individual companies.

Consumer Council for WaterThe Consumer Council for Water represent consumers within the water and sewerage sectors. They also investigate consumer complaints that have not been satisfactorily resolved by the water companies.

Competition and Markets AuthorityThe CMA role is to make sure that there is healthy competition between companies in the UK for the benefit of companies, customers and the economy. In the water and sewerage sector they investigate proposed company mergers, and are also the body of appeal for some disputes between Ofwat and the water companies.

Utility Regulator The Utility Regulator for Northern Ireland, an independent non-ministerial government department, is the regulator for the Northern Ireland electricity, gas and water sectors. The Utility Regulator: Promotes effective competition in the market. Controls the supply, generation, distribution and transmission licences. Regulates pricing for a number of companies.

OFWAT: STANDARDS OF SERVICE REQUIREMENTS FOR CONSUMERS

The guaranteed standards scheme (GSS) Applicable to England and Wales from 1 April 2008 Customers of water and sewerage companies are entitled to guaranteed minimum standards of service, as laid down by the Government. Where a company fails to meet a standard then it is required to make a specified payment to the customer affected.

On 1 April 2008 revised GSS Regulations came into force which, among other things, amend the previous GSS Regulations for sewer flooding. The amendments relating to sewer flooding include:

• setting a minimum payment level of £150 for each incident of internal sewer flooding,

• setting a new standard for customers materially affected by external sewer flooding;

• setting external sewer flooding payments at 50% of the annual sewerage charge for each external sewer flooding incident (minimum payment of £75 and maximum payment of £500).

OFWAT: STANDARDS OF SERVICE REQUIREMENTS FOR BUSINESSES AND DEVELOPERS

Water• Pre development enquiry - Pre-development report sent

within 21 days.

• New connection completion Service pipe connection completed within a period of 21 days.

• Main construction The construction and commissioning of the water main will be completed either (i) within a period of 90 days commencing on the relevant day, or (ii) no later than on the date agreed with the developer.

Sewage• Sewer requisition construction and commissioning of the

sewer will be completed either (i) within a period of 180 days commencing on the relevant day, or (ii) no later than on the date agreed with the developer

OFWAT: REGULATIONS TO PROTECT CONSUMERS AGAINST INTERRUPTIONS IN SUPPLY

Notice of interruption to supply (GSS Regulation 8) Where it is planned that the supply will be materially interrupted or cut off for more than four hours to carry out necessary works the company must give written notice to affected customers at least 48 hours before the supply will be interrupted or cut off, including notification of the time by which the supply will be restored. If the company fails to do this, the company must automatically make a GSS payment.

Where the supply is interrupted or cut off to carry out necessary works in an emergency the company must, as soon as is reasonably practicable, take all reasonable steps to notify affected customers. Where a customer was not given the correct notification for a planned interruption lasting more than four hours caused by necessary works, but the company does not make an automatic payment to the customer within 20 working days of this event, the company must automatically make an additional penalty payment to the customer.

Supply not restored (GSS Regulation 9) The company must automatically make a GSS payment to affected customers if:

• The supply is interrupted or cut off to carry out necessary works, and the supply is not restored by the time stated in the written notice given to affected customers;

• The supply is interrupted or cut off in an emergency due to a leak or burst in a strategic main and is not restored within 48 hours of the company first becoming aware of the interruption or that the supply was cut off; or

• The supply is interrupted or cut off in an emergency for any other reason and is not restored within 12 hours of the company first becoming aware of the interruption or that the supply was cut off. A further automatic GSS payment must be made for each full 24-hour period that the supply is interrupted or cut off. If the company does not make an automatic payment for which it is liable to the customer within 20 working days of the interruption to supply, the company must automatically make an additional penalty payment to that customer.

Flooding from Sewers If effluent from a sewer, which is vested in a sewerage company, enters a customer’s land or property, the company must make a GSS payment of the sum equal to 50% of the customer’s annual sewerage charge up to a maximum £500. The customer must claim the payment from the company within three months of the incident.

If the amount the company is required to make is less than £75, the company must pay the customer £75. This payment must be made for each incident. If the company does not make a payment for which it is liable to the customer within 20 working days following the date on which the claim is received by the company, the company must automatically make an additional penalty payment to that customer.

Appendix 2

WATER AND SEWAGE REGULATION

18 19

Ever since BT was privatised in 1984, there has been a continuous policy debate over how the UK telecommunications sector should be regulated to adapt to rapidly changing technologies and markets. The rapid deployment of new technologies such as mobile, internet and broadband have created new challenges for regulators. As a result, today’s telecommunications regulatory framework is a complex set of provisions.

REGULATORS

Ofcom

UK telecommunications operators must operate within the legislative framework set by the Communications Act 2003. This Act implemented a set of EU directives from 2002 which sought to modernise and further harmonise communications regulation across the European Union. Tasked with the practical implementation of the Communications Act, the Office of Communications (Ofcom) was created in 2003 as a converged regulator replacing the various regulators in existence until then.

Considering the telecommunications sector (as distinct from the broadcasting sector which Ofcom also regulates), the Communications Act abolished the need for telecommunications operators to hold a licence in order to provide telecommunications networks and services (with the exception of spectrum use which still requires a licence, e.g. mobile operators). Instead, a kind of self-certification scheme was introduced whereby operators need to ensure it complies with set of general conditions in order to be allowed to do business.

There are over 20 general conditions which detail an array of rules, including interconnection standards, number portability, deployment of telephone numbers, access to emergency services, sales and marketing standards, special services for the disabled, broadband migration codes, and so on. Ofcom’s investigation unit monitors compliance and resolves complaints in relation to the general conditions

OFCOM: STANDARDS OF SERVICE REQUIREMENTS FOR CONSUMERSNone identified as part of desk review

OFCOM: STANDARDS OF SERVICE REQUIREMENTS FOR BUSINESSES AND DEVELOPERSNone identified as part of desk review

OFCOM: REGULATIONS TO PROTECT CONSUMERS AGAINST INTERRUPTIONS IN SUPPLY None identified as part of desk review The opportunities for collaboration are not huge, vast majority of works are order driven – need to be delivered quickly – Ofcom set connection time of 40 days – and in general have to deliver faster than this. OFCOM: PRICE CONTROL PROCESS & INNOVATION

Price controls are a key tool used by regulators in order to ensure that service providers with at least a degree of monopoly power do not set excessively high prices and abuse their market power. An important consideration for regulators is how they can find a structure and a level for the price control that continues to incentivise innovation that will benefit consumers in the long-term. The following explores innovation incentives and mechanisms deployed through price controls.

Ofcom has used a technique known as ‘anchor pricing’ to encourage the wide deployment of innovative fibre-based NGA broadband services.

Ofcom’s approach was to apply a control on the access prices set by BT for the widely available copper-based ADSL8 broadband product. The price control ensures that the price for accessing legacy wholesale broadband services is cost-based and, because there is some degree of substitutability between NGA and ADSL, helps to ensure appropriate pricing for NGA services.

However, this approach is also designed to leave an incentive for BT to undertake the expensive investment required to deploy NGA services widely across the UK. The control is designed to encourage effective innovation through the following.

• Cost minimisation: the dominant provider will migrate customers to the new product only if it is efficient to do so.

• Reward for efficiency: the dominant provider will be incentivised to innovate in cost-reducing technologies.

• Pricing flexibility: although the anchor product is controlled, the dominant provider can set prices accordingly for its new product, allowing for innovative products to be developed with an appropriate level of commercial risk.

Appendix 3

TELECOMMUNICATIONS

OFWAT: PRICE CONTROL PROCESS & INNOVATION

Price controls are a key tool used by regulators in order to ensure that service providers with at least a degree of monopoly power do not set excessively high prices and abuse their market power. An important consideration for regulators is how they can find a structure and a level for the price control that continues to incentivise innovation that will benefit consumers in the long-term. The following explores innovation incentives and mechanisms deployed through price controls.

Ofwat does not apply a specific innovation mechanism as part of its price setting methodology for the price review period starting in 2015. However, the development of outcomes and the implementation of TOTEX (total expenditure) allow water companies to take longer-term riskier investments into account and therefore stimulate innovation. 3.40. It has also applied two specific mechanisms to stimulate effective investment management across price controls.

• The PR09 (Price Review 2009) overlap programme funds long term investment across the price control periods between 2010 and 2020.

• The transition programme allows companies to bring investment forward from 2015-16 into 2014-15 without incurring penalties for cost inefficiency. 3.41.

The benefit of these mechanisms is the smoothing of investment cycles to prevent heavy cyclical investment programmes. In addition, Ofwat funds catchment-based studies to stimulate new ways of working and innovation.

Water has seen further innovations including those set out below.

• New bond markets and debt management innovations have featured in its financing. These have helped in saving costs for the water companies and customers.

• Catchment management techniques have driven sustained improvements in water quality whilst avoiding or deferring new infrastructure costs.

• Innovations in real time control and management have reduced supply interruptions whilst improving the efficiency of leakage control.

• The Service Incentive Mechanism has encouraged water companies to consider the full customer experience of interactions and has driven innovation in customer service.

Appendix 2

20 21

Supplying energy to homes across the UK involves three key elements: making electricity through generation transporting gas and electricity and selling it to the customer. Energy companies can work in any of these different areas, and some operate in all of three of them Most electricity is generated at large power stations connected to the national transmission network. However, electricity can also be generated in smaller scale power stations which are connected to the regional distribution networks.

There are two types of electricity network: transmission and distribution. Transmission networks carry electricity long distances around the country at high voltages. Distribution networks run at lower voltages and take electricity from the transmission system into homes and businesses.

The transmission system is run by National Grid, which is responsible for balancing the system and making sure that the supply of electricity meets the demand on a second-by-second basis. Similar infrastructure exists for the transmission and distribution of gas.

Suppliers buy energy in the wholesale market and sell it on to customers. Suppliers work in a competitive market and customers can choose any supplier to provide them with gas and electricity.

The electricity and gas markets are regulated by the Gas and Electricity Markets Authority GEMA), operating through the Office of Gas and Electricity Markets (Ofgem). Ofgem’s role is to protect the interest of consumers by promoting competition where appropriate. Ofgem issues companies with licences to carry out activities in the electricity and gas sectors, sets the levels of return which the monopoly networks companies can make, and decides on changes to market rules.

GEMA GEMA has primary responsibility for regulation of the energy sector. It consists of a panel of individuals appointed by the Secretary of State for specified terms of not less than five years. Other than the Secretary of State’s powers to remove members on the grounds of misbehaviour, determine the remuneration of members and give guidance, GEMA is independent and has no stakeholder participation. GEMA delegates the day-to-day administration of its functions to Ofgem.

OfgemOfgem’s primary duty is to protect the interests of existing and future consumers taken as a whole in relation to electricity and, wherever appropriate, achieve this by promoting effective competition (Utilities Act 2000). Also, in accordance with the Third Energy Package (IME3), it has an additional duty to promote the internal energy market and to remove restrictions to trade between EU member states.

Utility Regulator The Utility Regulator for Northern Ireland, an independent non-ministerial government department, is the regulator for the Northern Ireland electricity, gas and water sectors. The Utility Regulator: Promotes effective competition in the market. Controls the supply, generation, distribution and transmission licences. Regulates pricing for a number of companies.

Competition and Market AuthorityIn April 2014 the CMA became the UK’s lead competition and consumer body. The CMA brought together the existing competition and certain consumer protection functions of the Office of Fair Trading and the responsibilities of the Competition Commission (Enterprise and Regulatory Reform Act 2013).

Health and Safety Executive Health and Safety Executive (HSE). The HSE is the national independent regulator responsible for (Health and Safety at Work Act 1974): The regulation and enforcement of workplace health and safety in Great Britain. Producing guidance and carrying out research in relation to occupational risks. In Northern Ireland the role is performed by the Health and Safety Executive for Northern Ireland.

OFGEM: STANDARDS OF SERVICE REQUIREMENTS FOR CONSUMERS

Connection Guaranteed Standards of Performance (Connections GSOPs)

The final proposals for DPCR5 introduced new standards to establish minimum levels of service and to set out the level of compensation to customers where these standards are not met.

There are thirty guaranteed standards of performance covering all the aspects of connection provision including:

• providing budget estimates;

• providing quotations for connections;

• contacting customers to schedule work;

• commencing works on site;

• completing work on site;

• completing energisation;

• repairing faults on unmetered connections;

• providing quotations for unmetered supplies;

• quotation accuracy;

• failure to make a payment for failure against one of the standards.

Each failure of a standard results in a payment to the customer with the majority of connections standards having a per day cumulative penalty.

OFGEM: STANDARDS OF SERVICE REQUIREMENTS FOR BUSINESSES

Incentive on Connections Engagement (ICE)

ICE is a new incentive being proposed for RIIO-ED1 which will penalise DNOs that do not engage adequately with larger connection customers i.e. those requiring more than four connections.

It is being implemented to focus DNOs on understanding and meeting the needs of major connection customers. DNOs will be required to identify, engage with and respond to the needs of connection customers. The activities undertaken will be reported to Ofgem every two years and separate submissions will be required for each market segment.

A penalty will be applied where the actions carried out fail to meet minimum requirements. The ICE incentive will not apply to those larger connection market segments that have passed the competition test.

Time to Connect Incentive

The ‘overall time to connect’ is a combination of the time to provide a quotation and, once the offer is accepted, the time taken to complete the necessary connection works.

Ofgem will be introducing a new incentive mechanism in RIIO-ED1 that rewards DNOs for outperforming time to connect targets. It is aimed at encouraging DNOs to develop ways to speed up the various elements of providing a connection, including providing greater assistance in the early stages so that enquiries are dealt with quickly. This will only apply to minor connections i.e. single and small developments up to four connections.

Standards of Service – Electricity Works

• Complete low voltage service connections works. In timescales agreed with the developer - Fine £35 for each additional working day

• Commence low, high and extra high voltage connections works on customer’s site.

• In timescales agreed with the developer – Fine £25 for each additional working day

• Complete low voltage works and low voltage energisation24 works (including phased works). In timescales agreed with the developer - Fine £135 for each additional working day

• Complete high voltage works (including phased works). In timescales agreed with the developer – Fine £200 for each additional working day

• Complete extra high voltage works (including phased works). In timescales agreed with the developer – Fine £270 for each additional working day

• Complete low voltage energisation works (including phased works). In timescales agreed with the developer £135 for each additional working day

• Complete high voltage energisation works (including phased works). In timescales agreed with the developer Fine - £200 for each additional working day

• Complete extra high voltage energisation works (including phased works).

• In timescales agreed with the developer Fine - £270 for each additional working day

Standards of Service – Gas Works

Substantial completion of work (when the connection to the premises has been installed, commissioned and left safe). On the date agreed with the developer.

• For contracts up to £1000 £20 up to a maximum of £200 or the contract sum, whichever is lower.

• For contracts £1000 to £4000: lesser of £100 or 2.5% of the contract sum to a maximum of 25% of the contract sum.

• For contracts £4000 to £20,000: £100 up to a maximum of 25% of the contract sum.

• For contracts £20,000 to £50,000: £100 up to a maximum of £200 or the contract sum, whichever is lower.

Payments are due in respect of the initial failure and each additional working day on which the failure continues.

OFGEM: REGULATIONS TO PROTECT CONSUMERS AGAINST INTERRUPTIONS IN SUPPLY

Interruptions Incentive Scheme (IIS)

The IIS provides rewards for outperformance (and applies penalties for underperformance) against targets for the average number of interruptions and the average duration of those interruptions. It considers both unplanned power cuts and planned outages, but the target setting mechanisms are different. Targets for unplanned interruptions are derived from industry benchmarks and have improvement factors applied so that they get tougher over time.

Planned targets are derived from past performance so that where DNOs make improvements to working practices these are ‘locked in’ to future targets and where work volumes drive an increase in interruptions the targets are relaxed so that DNOs are not adversely penalised for doing more work.

Performance is measured through well-defined guidelines that have been refined since the introduction of IIS in 2002/3. Reporting is externally audited annually to ensure that the details of interruptions are being accurately recorded and reported.

Appendix 4

ENERGY REGULATION

22 23

Reliability Guaranteed Standards of Performance (GSOPs)

The Electricity (Standards of Performance) Regulations 2010 define the guaranteed standards, covering a range of different network reliability circumstances, where customers are entitled to payments where DNOs fail to meet the standards. These are established measures of performance that will be continued into RIIO-ED1, but Ofgem have proposed the following changes:

• The standard for restoration of supplies under normal weather conditions will be reduced from 18 to 12 hours;

• Payments for failures will be increased to reflect inflation forecasts

They are intended to be minimum standards and therefore failures should be avoided. The proposed change to the standard for restoration of supplies in normal weather is being introduced to drive DNOs to reduce the duration of power cuts.

OFGEM: PRICE CONTROL PROCESS & INNOVATION

Price controls are a key tool used by regulators in order to ensure that service providers with at least a degree of monopoly power do not set excessively high prices and abuse their market power. An important consideration for regulators is how they can find a structure and a level for the price control that continues to incentivise innovation that will benefit consumers in the long-term. The following explores innovation incentives and mechanisms deployed through price controls.Price controls in the energy sector are based on Ofgem setting the revenues for networks over an eight-year period. This process incentivises the networks to find efficiencies in capital and operational expenditures with the savings being shared between the network companies and consumers.

The industry is also focused on improving customer service and hence companies have incentives to look for innovative ways of improving network reliability.

Ofgem’s recently revised price control framework, ‘RIIO’ (Revenue = Incentives + Innovation + Output), explicitly promotes innovation across the network businesses.

RIIO builds on Ofgem’s previous RPI-X9 approach. It maintains many of the features of RPI-X including strong up-front efficiency incentives and a commitment through the regulatory

asset value that funding for long-term investments will be provided by consumers now and through the life of the assets.

The price control under RIIO is designed to:

• directly encourage the networks to provide well-justified business plans which demonstrate that they have considered alternative approaches and to highlight the need for and benefits of innovation;

• provide a longer-term eight year period so that innovations involving higher cost in the short term to drive uncertain long-term savings should still be sought by the network company.

This framework is intended to help stimulate more innovation in the sector. However, in addition an innovation stimulus (some of which pre-dated RIIO for electricity distribution) was introduced because of the step change needed in the energy sector to facilitate the low carbon economy.

In 2004, Ofgem implemented the Innovation Funding Incentive whereby Ofgem allowed 0.5% of distribution networks’ revenue to be spent on innovation projects. At the most recent distribution price control (implemented from 2010), Ofgem enhanced innovation stimulus by initiating the Low Carbon Networks (LCN) Fund.

The LCN Fund, worth up to £500m over the five-year price control period, enabled electricity distribution companies to compete for innovation funding for specific projects as well as receiving funding as part of their revenue allowance (for smaller projects).

This funding is paid for by electricity consumers. The arrangements include governance processes to ensure network companies share what they learn with other companies. Reports have to be published on each projects and knowledge is shared through the Smarter Networks Portal and the LCN Fund annual conference.

The RIIO framework has built on the LCN Fund to provide further innovation support across gas and electricity, transmission and distribution encouraging technical and process innovation.

Enabling innovation

The key reason to continue supporting stimulus packages in this form is the need to ensure energy networks are able to

accommodate future demand at the least cost and recognising the need to move to a low carbon energy network.

In its most recent price control decision Ofgem was able to reference £900m of benefits which companies should be able to realise for consumers in the forthcoming control period as a result of the earlier LCNF programme.

Ofgem now has three funds set aside specifically for innovation.

1. Network Innovation Allowance (NIA): The NIA is a set allowance that each of the RIIO network licensees will receive to fund smaller scale innovative projects are part of their price control settlement.

2. Network Innovation Competition (NIC): The NIC is an annual competition for funding larger more complex projects which have the potential to deliver low carbon and/or wider environmental benefits to consumers. The NIC will comprise of two competitions – one for gas and one for electricity.

3. Innovation Roll-out Mechanism (IRM):

The IRM is a revenue adjustment mechanism that enables companies to apply for additional funding within the price control period for the roll-out of initiatives with demonstrable and cost effective low-carbon and/or environmental benefits.

The second year of the NIC is underway and the stimulus programme overall has seen a number of successful projects developed by networks. One example is the Flexible Plug and Play project which is trialling ways to improve the control of the extra high voltage network to connect increased volumes of wind generation.

The project will trial an open communications platform and develops an investment model for connecting renewable generation to the distribution system. This is a positive example of embedding innovation in the general business model of networks as UK Power Networks, the implementing distribution network, will offer this connection as a business-as-usual option for connections from 2015.

More recently, Ofgem has announced a further £46m of funding for innovation projects through these mechanisms.

New projects which will consequently be supported include:

• Trials to see if automatically turning off transformers when they’re underused minimises electricity “losses” and lowers costs for consumers;

• Developing a robotic device to inspect the condition of hard-to-access gas pipelines – avoiding the costs of digging them up;

• Allowing National Grid to explore new ways to keep the national electricity system balanced as more renewables connect – ensuring security of supply at lower costs for consumers;

• Converting a telecom-cable repair vessel so that it can repair offshore electricity cables and developing a new way of joining together different types of subsea cables – so repairs are quicker and cheaper.

OFGEM: CUSTOMER SATISFACTION

Broad Measure of Customer Satisfaction (BMCS)

The BMCS was introduced in DPCR5 to ensure that DNOs are focused on providing good service to customers. The BMCS is an incentive mechanism that provides rewards or penalties in three areas of customer service: customer satisfaction, complaints and stakeholder engagement.

Customer satisfaction is assessed through a survey and deals separately with three types of interaction:

• customers requesting a connection (minor connections only);

• customers experiencing a supply interruption;

• customers making a general enquiry.

The complaints part of the BMCS results in penalties where DNOs do not meet the specified target performance. The measure is subdivided into four components with greater weighting applied to repeat complaints and complaints that take longer than 31 days to resolve.

The final part of the BMCS considers stakeholder engagement with rewards available for DNOs that engage well and use the information obtained to improve the service provided to customers. This incentive has been strengthened to encourage DNOs to focus more on issues relating to vulnerable customers.

Appendix 4

24 25

Office of Road and Rail

The ORR regulate the rail industry’s health and safety performance, and hold Network Rail and High speed 1 to account to make sure that the rail industry is competitive and fair. In summary:

• Regulate Network Rail’s stewardship of the national rail network

• Licence operators of railway assets

• Approve track, station, light maintenance depot access

• Investigate potential breaches of the Competition Act 1998 in concurrent jurisdiction with the Office of Fair Trading

• Act as the designated enforcer under Part 8 of the Enterprise Act 2002, to ensure that businesses are fair and open in their dealings with consumers

In terms of our Safety function the ORR are the enforcing authority for the Health and Safety at Work Act 1974 for the Railways and Other Guided Transport System Regulations 2006, as well as for other pieces of railway specific legislation.

ORR has taken on responsibility for monitoring and enforcing the performance and efficiency of Highways England (which was previously the Highways Agency) and is delivering this through its Highways Monitor function.

1. To what extent do you consider the following regulatory requirements may influence the decision making of the utilities, highway authorities and transport in the context of considering joint works projects at (a) a single joint works project or (b) agreeing programme of joint works schemes?

a. The impact of general standards of service requirements, e.g. maintaining or restoring interrupted network services.

b. Standards of service requirements for consumers or businesses who request to be connected to a utility network.

c. Regulations for protecting consumers against interruptions to supply (for example through compensation payments being triggered).

d. General Duties set out in the regulatory frameworks including the NRSWA 1991 and TMA 2004 (e.g. where works are governed and regulated to their individual licence holders)

e. Regulations for investing ahead of need and the linked coordination of works around development sites.

f. Regulations and requirements placed on highway authorities for their maintenance and investment activities.

1. Are there any further regulatory requirements not covered here which you think may have either a direct or an indirect impact on the decision making of utilities when they are contemplating a joint works scheme or programme of schemes?

1. Does the emphasis and direction of your utility regulatory framework as a whole support the principle of joint works?

1. What role could you seeuh the price control process playing in supporting greater take up of joint works planning, for example through the business planning consultation process?

1. To what extent does the price control process allow for views of customers who may be impacted by streetworks?

1. To what process of consultation do you run for price controls and what is your policy around price controls moving forward?

1. Are there incentives in the regulatory framework and its application to utilities business plans which may encourage joint working? If this exists as part of customer satisfaction performance, does this include a means of including satisfaction following roadworks?

1. Are there any other regulations which you consider may affect the ability of utilities and highway authorities to deliver and contract a joint streetworks project – this may include completing works for 3rd parties and vice versa?

Appendix 5 Appendix 6

ROAD (HIGHWAYS ENGLAND) AND RAIL SECTOR REGULATION

UKRN SURVEY QUESTIONS

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AuthorsFinlay Kelly — Future Cities Catapult Peter Milway — Staffordshire University