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Lane rental pilot schemes consultation - Summary of responses

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Background

1. Section 255 of the Transport Act 2000 provides powers for local highway authorities to impose a daily charge on undertakers (broadly utility companies in the gas, water, electricity and telecommunications fields) for every day on which they carry out street works and dig up the road to maintain or install their apparatus - or "lane rental" as it is commonly known. However, before any charges can be levied, the Government must first make regulations activating the lane rental powers. If the powers were to be activated then any highway authority wanting to operate a lane rental scheme would need to submit a formal proposal to the Government seeking permission. They would not be able to proceed with their scheme unless Ministers first made a formal Order allowing that authority to go ahead.

2. In April 2001, parallel powers were activated under section 74 of the New Roads and Street Works Act 1991. These powers allow highway authorities to impose a daily charge on undertakers whenever any of the latter's works overrun a mutually agreed ("reasonable") deadline. Consultants - Halcrow - have been appointed by the Department of Transport, Local Government and the Regions to monitor the effect of these powers and to see how far they are successful in reducing the disruption which utility street works cause to road users. The Government has made clear that if the section 74 powers do not lead to a sufficient reduction in disruption then they are prepare to activate the lane rental powers.

3. However, whilst the Government has not yet come to a decision on whether the lane rental powers should be made available to local authorities across the whole of England, it believes that it would be sensible to test the powers on a limited scale, to see what contribution the powers might make to reducing disruption. Therefore in spring 2001 it agreed in principle with 2 local authorities - Middlesbrough and the London Borough of Camden - that they would be allowed to operate lane rental pilot schemes.

Details of consultation

4. A public consultation was launched by John Spellar - Minister of Transport - on 14 August 2001, involving individual local authorities and utility companies in England, as well as a wide range of other relevant organisations, including bodies representing road users and the utility regulators. A list of the organisations consulted is attached at Annex A. The consultation "pack" consisted of draft regulations activating the lane rental powers, a draft Regulatory Impact Assessment - which set out the likely benefits and costs of activating the lane rental powers - and details provided by Camden and Middlesbrough councils of how their pilot schemes were likely to operate.

Responses to consultation

5. The consultation on the draft proposals lasted from 14 August to 12 October. 82 responses were received, as follows:

individual local authorities/bodies representing local Government - 39
individual utility companies/bodies representing utilities - 21
other bodies - 22

Broad principles

6. Although the consultation was concerned with the operation of lane rental pilot schemes, many respondees concentrated on the principle and possible details of a national launch of the lane rental powers, should that ever come about. In general, local authorities responding welcomed the introduction of the pilot schemes and supported a national launch as soon as possible, as they considered that it would provide a strong incentive to improve current practices. There was also a general feeling that as lane rental charges were related directly to the period for which utilities works occupied the highway, such a scheme would be easier for local authorities to operate than one under section 74 which depended upon highway authorities and utilities agreeing what would be a "reasonable" period for completing each set of works.

7. Against that, utility companies and bodies unanimously opposed the use of the rental powers. Many were concerned that the lane rental powers were being activated before, as they saw it, the section 74 powers had been given sufficient opportunity to prove themselves. They also believed that it was unjust to target all such measures on utility companies whilst ignoring works carried out by highway authorities (such as road resurfacing), which could be equally disruptive.

8. The other bodies responding had mixed views, although a majority considered that it was justified to launch pilots to discover what contribution lane rental might play towards reducing disruption.

Implications of charges

9. Many utilities expressed concern that the costs which lane rental would impose on them would inevitably have implications for the speed and size of their programmes for installing and maintaining apparatus. Some mentioned that, as they saw it, this might undermine other initiatives supported by Government, notably:

  • the roll-out of increased access to the broadband network;
  • Transco's programme for the replacement of cast iron and ductile iron gas mains;
  • action being taken by water companies to reduce leakage rates from pipes.

10. Other utilities pointed out that they would still incur charges under lane rental, even if they carried out works as quickly and efficiently as possible. They believed that the figures in the TRL study referred to in the draft Regulatory Impact Assessment for the likely costs which lane rental would impose on utilities were far too low. They would need to talk with the relevant utility regulator for their sector (Oftel, Ofwat or Ofgem) as to how far they would be permitted to pass on the costs they incurred through to their customers in the form of higher bills. Many local authority respondees believed that it was important that utilities were not permitted simply to pass the full cost of lane rental onto customers, as this would remove any incentive for them to carry out their works more quickly and more efficiently.

Extent of charges

11. A variety of views were expressed on whether certain types of street works should be liable for lane rental charges, or whether they should be exempted. The following points were made, amongst others:

  • works on verges of roads and footways, as against the road itself, should be exempt from charges;
  • "minor" works should not be exempted from charges, as Camden were proposing, as these were still capable of causing disruption to road users;
  • it was not fair to charge utilities for "diversionary" works (that is works necessary to divert utilities' apparatus because of major works being carried out by another body, eg new local authority road schemes).

12. Utilities also pointed out that whilst it was proposed to set a maximum charge of 500 a day for each works, it was left open to individual highway authorities to choose what charges they imposed beneath this ceiling, whereas they would have preferred a nationally agreed set of standard charges if lane rental had to be implemented. It was suggested that if lane rental was launched nationally then it was important to define in regulations what standard charges should apply to each type of works. In particular, if "strategic" roads were to attract a higher charge, then the term "strategic" should be defined.

Miscellaneous

13. Amongst other points made by consultees were:

  • concern amongst some local authorities that some undertakers might cut corners and compromise quality (for instance by not reinstating the road surface to the required standard after completing their works) in an attempt to finish work quickly in order to reduce the lane rental charges for which they would be liable;
  • it was important to ensure that whatever arrangements were put in place to monitor the effect of the pilot schemes were thorough and transparent, so that a balanced and comprehensive picture could be obtained on the advantages and disadvantages of lane rental;
  • Camden and Middlesbrough should be prepared to be flexible and to recognise that certain factors (for instance extreme weather conditions or security alerts) were beyond the control of utility companies and that they needed to consider reducing or waiving charges in such circumstances;
  • some local authorities pointed out that it was not possible to calculate exactly how long each utility works took unless companies provided them with accurate and timely information. They believed that higher fines needed to be introduced for failure to provide such information.;
  • thought needed to be given as to how authorities could use lane rental to encourage innovative practices, eg the greater use of trench sharing between more than one utility, so as to reduce disruption (and the lane rental charges to which each utility would otherwise be liable).

Action following the consultation

14. Having weighed up the responses to the consultation, the Government decided that, on balance, pilot schemes covering roads in Camden and Middlesbrough should be allowed to go ahead, so that a through assessment could be made of the possible benefits and disadvantages of launching the lane rental powers across England. Once the pilot schemes have been completed, and an assessment of their success has been made, detailed discussions will be needed with utility companies, local authorities, utility regulators and other relevant organisations before a final decision is reached on a possible national launch. Should a national launch be decided upon, then it will be important to take into account the issues raised by those responding to the consultation, including those listed earlier in this summary, in drawing up the details of the scheme.

15. However, several changes were made to the draft regulations in the light of comments made during the consultation. The two main changes were:

  • firstly, to increase the maximum possible daily charge from 500 to 1,000. This was done in the light of concerns that some undertakers might cut corners and compromise quality in an attempt to carry work out quickly. This would allow a higher "punitive" charge to be introduced for remedial works, that is works carried out to put right earlier substandard work;
  • secondly, it was decided that "diversionary" works should not be liable for charges.

16. The draft regulations were laid before Parliament in November 2001 and were approved by Parliament shortly before Christmas. Following this, in mid-January 2002 Camden and Middlesbrough councils submitted formal applications to the Secretary of State for Transport, Local Government and the Regions seeking permission to operate lane rental pilot schemes in their area. Ministers subsequently approved both applications. The Street Works (Charges for Occupation of the Highway) (England) (London Borough of Camden) Order 2002 and The Street Works (Charges for Occupation of the Highway) (England) (Middlesbrough Borough Council) Order 2002 formally authorise the two applications.

17. Both Camden and Middlesbrough intend launching their lane rental schemes in the week commencing 4 March 2002. They are scheduled to continue until the end of March 2004. Further details of the Camden and Middlesbrough schemes can be found at Camden and Middlesbrough's own websites.

18. The Government has appointed consultants - Halcrow - to undertake the monitoring of the effects of the pilot schemes. They will be looking not only at the effect of lane rental on the disruption which utility works cause to road users but also the burdens which it imposes on utilities. A Steering Group has been set up to oversee the monitoring project, on which both local authorities and utility companies are represented.

Annex A

ORGANISATIONS CONSULTED

All English Highway Authorities
All Members of the National Joint Utilities Group

Other Utility Companies

186K Ltd
360Atlantic (UK) Ltd
ACC Long Distance UK Ltd
Advanced Radio Telecom Ltd
Atlantic Telecommunications Ltd
AXS Telecom UK Ltd
British Energy Plc (Nuclear Electric)
British Energy plc (Scottish Nuclear)
Broadband Optical Access UK Ltd
BT Cellnet
Central North Sea Fibre Telecommunications Company Limited
Cignal Global Communications UK Limited
COLT Telecommunications
CommsTec Limited
CompleTel UK Limited
Concert Communications Company
Convergence Ventures Limited
Core Telecommunications Limited
Dolphin Telecom plc
East-West Telecom Limited
Easynet Group Plc
EGN BV
Eircom (Belfast) Ltd
Eircom (UK) Limited
Eircom NI Limited
Enitel ASA
Eon Telecommunications Ltd
Farland Services UK Limited
Faultbasic Limited
Fibernet (UK) Limited
FirstMark Carrier Services (UK) Ltd
Flag Atlantic UK Limited
Flag Telecom Ireland Limited
Flute Limited
Formus Communications UK Ltd
GC Pan European Crossing UK Limited
Global One Communications Holding Ltd
Global Telesystems (UK) Ltd
Global TeleSystems Europe BV
Ground Zereau Limited
GT UK Limited
GTS Business Services (UK) Limited
GTS Network (Ireland) Ltd
Highway One Corporation Limited
i-21 Ltd
iaxis Limited
Infolines Public Networks Limited
International Computers Ltd
Internet Central Ltd
INTERNET Network Services Limited
ipsaris limited
Isle of Wight Cable & Telephone Company Ltd
Izenkom Limited
KDD Europe Limited
Kingston Communications (Hull) Plc
KPNQWEST Assets UK Limited
Level 3 Communications Limited
Louis Dreyfus Communications SA
M3COM (UK) Limited
Magnox Electric
MCI -WorldCom
MFN UK Limited
MLL Telecom Ltd
National Power Plc
National Transcommunications Ltd
Neoscorp Limited
nevada tele.com ltd
Nextlink UK Ltd
NorSea Com AS
Norweb Telecom Limited
NWP Communications Limited
OnCue Telecommunications Limited
One2One
Orange
Pacific Gateway Exchange (UK) Limited
Quadrant
Rateflame Limited
Redstone Network Services Limited
Rocom TBI Limited
RSL Com UK Ltd
South Western Electricity Plc
Southern Electric Plc
StarGlobal Ltd
Storm Telecommunications Limited
Surf Telecoms Limited
Tele2 (UK) Limited
Telecom New Zealand (UK) Licences Limited
Teleglobe International UK Ltd
Teleport London International Ltd
Telia UK Limited
Telstra (UK) Limited
The Vitesse Project Ltd
TMI Telemedia International Ltd
Torch Communications Limited
TyCom Networks (UK) Limited
VersaTel Telecom BV
Viatel Global Communications Limited
Viatel UK Ltd
Vine Telecom Networks Limited
Vodafone Group plc
Winstar Communications Ltd
World Online UK Ltd
Yorkshire Water Services Ltd
Zipcom Telecommunications Limited

Other Organisations

Associated British Ports
Association for Geographic Information
Association for Road Traffic Safety and Management
Association of Chief Police Officers
Automobile Association
BAA plc
British Motor Cyclists' Federation
British Ports Association
British Road Federation
British Waterways
Bus Passenger Infrastructure Division London Transport
Central Rights of Way Committee
Chartered Institute of Building
Chartered Institute of Transport
Civic Trust
Civil Engineering Contractors Association
Confederation of British Industry
Confederation of Passenger Transport UK
CSS
Crown Estate Paving Commission
Cyclists Public Affairs Group
Cyclists Touring Club
Disabled Drivers Association
Disabled Persons Transport Advisory Committee
Electrical Contractors Association
Federation of Master Builders
Freight Transport Association
Friends of the Earth
Gas Consumer Council
Heritage Railways Association
House Builders Federation
Institute of Highways Incorporated Engineers
Institute of Motor Cycling
Institute of Public Rights of Way Officers
Institution of Civil Engineering Surveyors
Institution of Civil Engineers
Institution of Electrical Engineers
Institution of Gas Engineers
Institution of Highways and Transportation
Institution of Lighting Engineers
Institution of Structural Engineers
Institution of Water and Environmental Management
International Society for Trenchless Technology
Jason Consultants Ltd
Joint Committee on Mobility for Disabled People
Joint Committee on Mobility of Blind and Partially Sighted People
Kingston-upon-Hull Telephone Company
Local Government Association
London Chamber of Commerce
London Cycling Campaign
London Transport
London Transport Buses
National Association of Tree Officers
National Consumer Council
National Joint Utilities Group
National Sewerage Association
Office of Electricity Regulation
Office of Gas Supply
Office of Telecommunications
Office of Water Services
Ofwat
Ofwat National Customer Council
Oil Pipeline Agency
Ordnance Survey
Ordnance Survey
Passenger Transport Executive Group
Pedestrian Policy Group
Pedestrians Association
Pensioners' Voice
Pipeline Industries Guild
RAC Foundation
Railtrack
Refined Bitumen Association Ltd
Retail Consortium
RNIB and Guide Dogs for the Blind Association
Road Haulage Association
RoSPA
Royal Association for Disability and Rehabilitation
Royal National Institute for Deaf People
SUSTRANS
The Post Office
Trades Union Congress
Transport 2000
United Kingdom Society for Trenchless Technology
Utilities Contractor Associations' Federation
Water UK

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