National Highways is in breach of a condition of its licence but will not face enforcement action, its regulator has said.
The announcement follows a decision by the Office of Rail and Road (ORR) earlier this year to open an investigation into the government-owned company’s performance, delivery and capability after it ‘observed a number of areas where performance had dipped’.
The regulator has now determined that National Highways is not in compliance with condition 7.3(e) of its licence regarding the provision of data and information that the ORR may require to deliver its statutory duties.
In a 'case to answer' letter in May, ORR chief executive John Larkinson told National Highways chief executive Nick Harris that during the original investigation, it had been shown information that the company 'could and should' have shared with it previously.
This included information that National Highways had held internal discussions on its pavement KPI and an action plan in both 2022-23 and 2023-24.
It also discovered that National Highways had drawn up a new approach to assessing pavement condition in its regions but had not shared this with the ORR.
Mr Larkinson wrote: 'It is unknown why National Highways did not proactively offer this information; particularly given the level of concern we had and continue to have about the delivery of this target and the additional correspondence previously sent to the company.'
The ORR said providing appropriate and timely data and information is crucial to driving improvements in delivery and performance, in the interests of road users, taxpayers and communities.
However, it added that National Highways responded positively to the investigation and has already identified improvements it will make.
In a further letter to Mr Harris, Mr Larkinson (pictured) said its board had considered whether it would be appropriate to take statutory enforcement action but ‘concluded that we can together achieve a positive outcome without the need for enforcement action at this time’.
It will continue to engage with the company as it works on an improvement plan to come back into compliance with its licence and to address the issues and concerns identified in the investigation.
The ORR’s director, performance and planning, Feras Alshaker, said: ‘ORR will continue to hold National Highways to account over the remaining months of the road period and press the company to do all it can to deliver for road users, communities and taxpayers, and to achieve the commitments set out in the road investment strategy and the company’s licence.’
The ORR told Highways that it has never used its statutory enforcement powers since it was created nine years ago.
When it opened the investigation it said that National Highways had been generally successful in achieving its aims and delivering for road users, taxpayers and communities.
It added that it had worked with the government-owned company in line with its Holding to Account policy, 'in a proportionate and targeted way to successfully resolve individual risks and concerns before they crystalised into issues affecting road users'.
The regulator’s letter also revealed that its board had decided that there are insufficient grounds to find that National Highways is non-compliant with two other related conditions of its licence.
These were: condition 4.2(a), (b) and (c) on exercising functions and complying with legal duties, and condition 5.6(b) (leading on from 4.2(c)).
The ORR said it considered that National Highways had provided satisfactory evidence of how it tries to balance what are sometimes competing statutory duties and business priorities.
It added that the company ‘has acknowledged that there have been recent instances where it has not been able to effectively evidence this decision making to us when asked to do so’.
In particular, the company recognised that ‘the transparency and visibility for ORR of the reasoning behind some of our decisions can be improved and we would want to work with you to deliver these improvements’.
The ORR said this reflects its board’s decision on condition 7(3)(e), ‘that the company may believe that it is acting in a manner that it considers is best calculated to balance its sometimes competing functions and duties, but there are weaknesses in how it records and evidences its decision making to us’.
