The Isle of Wight Council and Island Roads have agreed initial savings worth more than £11 million following a renegotiation of the highways PFI contract.
The arrangement, which started on 1 April, is a £0.6 million-a-year cost reduction over the next 18 years of the agreement, or £11.4 million in total when index-linked.
The council, supported by Jasmine Consulting, is continuing to work with Island Roads to identify further savings that can be implemented from April 2020. When completed, the total savings over the lifetime of the contract could total around £40million.
“This arrangement is a substantial contribution to the council delivering its budget strategy and I would like to thank Island Roads for the work it has done to agree it,” said Councillor Stuart Hutchinson, the councillor in charge of council finances.
Councillor Ian Ward, cabinet member for infrastructure and transport, added: “This very successful contract has transformed our Island roads since it started six years ago, and it will continue to do so. It has delivered some of the best roads in the country and, with these savings, it represents even better value for money for Islanders.
“The savings do not affect road resurfacing and footpath improvements plus high priority maintenance and road safety works, which will continue as required.
“It does however mean people will find, some aspects of maintenance and services reduced for example, grass verges will not be cut as often to encourage biodiversity, and roadside bins will not be emptied as frequently. However, these changes are an evolution of the original contract as we have discovered the service was better than needed in some areas.”
The arrangement’s implementation will lead to a number of post reductions at Island Roads and its subcontractors, including five from CCTV monitoring and similar numbers in the area of street cleaning and also grass cutting. CCTV will still function on the Island and Hampshire Constabulary has access to it.
In all areas, Island Roads is looking at redeployment and other avenues to keep any compulsory redundancies to a minimum.
The council has also agreed to look favourably on applications from those affected by redundancy for any jobs it advertises. In practice this means, that if the person meets a council job specification, the authority will guarantee an interview.
Service director at Island Roads, Steve Ashman, said: “While under this new agreement, we will be providing a reduced level of service, we are confident residents will continue to receive an extensive, high quality programme of highways improvement and maintenance.”