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Wakefield Street Lighting

Category: Street Lighting

"The only remedy appeared to be the council digging into its pockets and finding large amounts of money and at that time that just wasn't an option. It was a time when all local authorities were under pressure in terms of the availability of funding so we had to find a more creative solution and that was the starting point for exploring the PFI option."

Andy Kerr, Head of Highways and Engineering Services at Wakefield District Council

January, 2005

The UK's street lighting stock has suffered from over two decades of under funding and deterioration. A recent survey revealed that the problem was so great that over 10% of all lighting columns in the country were considered as dangerous and in need of urgent replacement. This in itself would cost over £500 million to remedy.

The PPP Forum spoke to Andy Kerr, Head of Highways and Engineering Services at Wakefield District Council, about how PFI is helping to remedy this crisis in Wakefield.

"We originally highlighted that we had this problem looming on the horizon back in the late 1990s. The only remedy appeared to be the council digging into its pockets and finding large amounts of money and at that time that just wasn't an option. It was a time when all local authorities were under pressure in terms of the availability of funding so we had to find a more creative solution and that was the starting point for exploring the PFI option. Also at that time, local authorities were asked to go hold best value reviews which meant looking at our services and identifying ways to improve them. The very first best value review the council did was street lighting mainly because it had been flagged up that there was a developing problem with the street lighting stock. One of the things we did as part of the Best Value Review was to ask the citizens of Wakefield how important street lighting was to them. It's an interesting question because most people don't think about street lighting at all until it's not working. But we did get two messages back loud and clear. People said they felt much safer going out at night if the streets were well lit and they also felt that road safety would be improved by the provision of better lighting."

Research carried out by the Home Office has shown that poor street lighting does indeed lead to significantly increased levels of crime and accidents, and the Government has committed itself to bringing street lighting up to an acceptable standard by 2010. PFI will be essential to the achievement of the Government's target. For Wakefield, this was the council's first experience of PFI.

"Within the context of the best value review we got an idea of what the public thought about streetlighting and also as part of that review we looked at options of how to deal with the problem. Consequently an “outline business case” was prepared as part of the review which identified the viable option to pursue was the street lighting PFI route as it represented better value for money as well as attracting the extra funding."

The result was that Laing Roads, a division of John Laing plc and Amey plc were awarded a £120 million public and street lighting PFI contract by Wakefield Metropolitan District Council (Wakefield MDC) to renew and upgrade street lighting across the District. Under the terms of the contract the consortium is replacing or upgrading 41,000 street lights. Services under the 25-year contract commenced in February 2004.

"The decision to go down the PFI route was challenging because this was not the traditional way for the provision of a street lighting services at the time. A lot of concerns were raised about what it would mean in practical terms but to be fair, once everyone understood the size of the problem and the level of funding that was required to address it and the benefits the PFI solution would bring to the people of Wakefield, it was accepted."

On behalf of the consortium, Amey Highways has assumed responsibility for the management, design, installation and ongoing repair and maintenance of the District's entire lighting stock.

"I think this kind of PFI is less emotive than say building a school or a hospital but we did have about 30 people transferred under the TUPE arrangements. We deliberately set out from the start to try to involve staff in what was happening all the way through. A powerful example of that is when we got down to a shortlist, all four contractors offered to take our staff to projects in other parts of the country to speak to people who had already been transferred into their organisation. Some said they wouldn't now go back to their original employer so that gave a degree of reassurance to the staff.

We also decided, I think uniquely, that they would remain in the council accommodation with other council workers. I remember there being a bit of a debate about this with people who felt that could be a bit “dangerous” to have the private sector based in the same compound expressing fears of a “Trojan Horse”. We approached it from completely the opposite view of that and thought here we are with a 25 year contract, which is probably longer that most marriages these days, and I'm sure over that time there'll be lessons we can learn from the private sector just as the private sector can learn lessons from us. The big thing about a partnership is that you have to work at it. It's not as if on day one we hand everything over and say there you are that's your risk. Inevitability things won't work out as we'd envisaged and we'll need to work to resolve problems in a positive way.The trick is to try to get the right balance of risk and that's one of the lessons we learnt. When we first set out the business case I think we tried to actually transfer too much risk and we ended up taking one or two of the risks back again, one of these is the price of energy."

30,000 lighting columns and 2,500 lit signs will be replaced in the first five years of the contract. The ongoing service provided by the project company will then include routine maintenance, lifecycle maintenance and reactive and emergency repairs. After the first year, the core investment programme is ahead of schedule.

"Based on the numbers of columns replaced they are ahead of schedule. If you measure what people think about the new lighting columns, and we do because we and the project company both need the feedback, then apart from one or two minor quibbles about the positioning of the individual columns, all the comments have been very positive. The problem is that when a council announces millions of pounds of investment in streetlighting then everyone expects their road to be the first on the list. So what we are doing with the project company is to go round the District doing a sort of joint “roadshow” to explain the timetable and that if they're at the back end of the core investment period then that reflects the fact that the replacement of their lights on structural grounds is less critical."

The PFI method of procurement was initially attractive to the council as a way of attracting outside investment. These days, councils have more powers to borrow to invest in their infrastructure. So, with the benefit of hindsight, would the council still choose to go ahead with the PFI project?

"Yes. One of the reasons this is working is because it's a long term relationship and after this experience I'm looking at exploring longer term partnerships in a range of other areas. In the future I would like to see the consortium more involved in what's happening within the council so I'm trying to think of some innovative ways of involving them more in the delivery of the Community's vision. They are now an integral part of delivery of our services and we can learn from the way they do things. It'll be interesting to see in say five years time how embedded they are within the council. I really don't have a mental picture of them as an external contractor trying to maximise their profits, I just see them as another delivery arm of the council."