In many respects, the Agency's letting and management of maintenance contracts, known as 'Managing Agent Contractor' (MAC) contracts, is not a bad story. The contract largely follows best practice and offers the potential to secure value for money and, since its introduction, there has been greater certainty over delivery of maintenance schemes within budgets and to timescales. Journey time reliability on the strategic road network has steadily improved since summer 2007 and the timing suggests that Agency interventions have contributed to the improvement. There are still some serious shortcomings, however, which put value for money at risk. In particular, the Agency lacks basic facts about what it gets in return for taxpayers' money and by how much the costs of some items such as road resurfacing have increased. It has failed to exploit cost information to benchmark prices and drive efficiency improvements, and has lacked the quantity surveying and commercial skills required to manage the contracts effectively. These shortcomings are especially worrying given overall increases in costs and the wide variability of costs between areas.

While recent indications are that the market for road maintenance contracts is becoming more competitive, there is a risk that the Agency is too reliant on the procurement stage to deliver performance improvements rather than through the proactive management of contractors during the term of the contract.

The Agency's principal value for money objective is to minimise the whole life cost of maintaining the network. It does not appear, however, to pursue minimum whole life cost as strongly as it might. Only 20% by value of the schemes entering the Agency's renewals programme are subjected to formal whole life cost appraisal and, even where whole life costing is used, it does not appear to drive programme design.

Despite Agency initiatives to improve safety on its road network in recent years, safety at road works for both road users and road workers has not changed much in recent years. We are concerned that the latest year for which statistics on road worker injuries were available was 2006.

On the basis of a report by the Comptroller and Auditor General,[1] we examined the extent to which the Agency is an informed customer and is challenging contractors to deliver value for money and better outcomes for road users and for those who work on the network.