Scale, quality and efficiency in road maintenance: Evidence for English local authorities

Abstract

ReuseThis article is distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs (CC BY-NC-ND) licence. This licence only allows you to download this work and share it with others as long as you credit the authors, but you can't change the article in any way or use it commercially. More information and the full terms of the licence here: https://creativecommons.org/licenses/ Takedown If you consider content in White Rose Research Online to be in breach of UK law, please notify us by emailing eprints@whiterose.ac.uk including the URL of the record and the reason for the withdrawal request.1 Scale, quality and efficiency in road maintenance: evidence for English Local Authorities May 2017Phill Wheat* Abstract This paper outlines the first econometric stochastic frontier efficiency analysis of road maintenance costs for local authorities in England in the academic literature. It is motivated by current public sector austerity requiring local authorities to provide efficient highway functions both in terms of learning from best practice (economic efficiency) and potential reorganisation to exploit economies of scale (scale efficiency). The analysis utilises a road condition measure and an end user (public) satisfaction indicator as well as road length and traffic factors. The availability of public satisfaction data is particularly important as incorporation of such a measure into benchmarking is currently in its infancy in economic regulation but is increasing in prominence, such as in regulation of health care. Evidence is found for an optimal road length which has implications for the current trend to merge the delivery of highways services across local authorities. Bigger is not necessarily better. A positive relationship is found between public satisfaction and cost which is strongest for very low or high public satisfaction.Finally, the median cost efficiency is 83% which implies many authorities have the opportunity to save substantial sums by adopting best practice without reducing service quality.*University of Leeds, p.e.wheat@its.leeds.ac.uk 2

Robust stochastic frontier analysis: a Student’s t-half normal model with application to highway maintenance costs in England

“…With respect to efficiency studies, Wheat (2017) undertakes the first study of local road maintenance costs in Britain and utilised a forerunner of the dataset under consideration in this paper. The author considered the optimal scale of operation as well as evidence for the cost efficiency of local highway authorities.…”

Competitive tendering, ownership and cost efficiency in road maintenance services in Sweden: A panel data analysis

“…Firstly, the literature has identified that road maintenance is subject to economies of scale. For instance, Wheat (2017) analyzes the efficiency in road maintenance for 51 local authorities in England and finds that sharing maintenance services (or mergers) across small local authorities would lead to potential cost savings. Moreover, there is, on average, scope for 17% cost savings without compromising maintenance quality and level of traffic flow.…”

“…Whilst there has been a long history of efficiency benchmarking in the roads sector, econometric techniques have been little applied (see Nash, 2018); though there has been recent developments in the literature focusing on the application of econometric methods to assess the relative efficiency performance in local authority roads in Great Britain (see Wheat, 2017), and also interest from the Office of Rail and Road in Great Britain in applying such approaches to strategic roads (see KPMG, 2016). Our paper therefore contributes new empirical evidence to a relatively limited but emerging international literature focused on comparing the efficiency of road maintenance and renewal activities.…”

Performance of performance specifications in design-build highway projects

“…Here, the problem is that the economies of scale can be different for new construction of roads (cf. Verhoef and Mohring, 2009) and for their subsequent maintenance and operation, where it is known that road length often, but not always, is associated with lower unit costs (Blom-Hansen, 2003;Wheat, 2017).…”