1) Will There Be a Model to Calculate Depreciation on Carriageway and Footways for Us To

Question / Answer
Carriageway & Footway GRC

1. Approach roads – we have a significant number of approach roads leading to many of our major roads in the Borough. Should this be added to our GRC R199b lengths?

/ GRC values should be based on R199b numbers, adjusted if necessary, for any de-trunked roads (since those don't appear on R199b) and dual carriageways. The centrally provided unit rates make allowance for typical features including roundabouts, laybys etc (sections 6.7.2.3 and 6.7.2.4 of the code) and so you should not normally add extra length for these types of features. In other words, the centrally provided rates include 'extra' to cover an allowance for the features typically associated with carriageways over and above the actual straight-run bits of asphalt so you do not need to and should not add these unless they represent a truly exceptional asset far in excess of what other highway authorities would have for a similar length of road.

1. If you have better inventory data than that used in your R199b returns can you use this in the GRC spreadsheets instead?

/ The GRC is designed to use the R199b lengths and hence these should be used with an adjustment for de-trunked roads and dual carriageways. Your own inventory is likely to include items such as slip roads and roundabouts which are allowed for in the GRC rates.
For the same reason you should not use your own area of inventory in the GRC spreadsheet. Instead you should divide the area by your carriageway length (from the inventory) to obtain an average carriageway width. This width is then used in the GRC spreadsheets – but multiplied by the R199b lengths to obtain a ‘notional’ area (different from your actual inventory area).

1. What carriageway width has been used in the default figures and does it include kerbs?

/ The width figure is the average width of the carriageway surface, excluding the kerb. The kerb is accounted for as a linear item and as such is already allowed for in the GRC rates for carriageways.

1. Is it possible to have further information on the assumptions that have been made in arriving at the GRC figures used in the spreadsheet?

/ It might be possible, but the approach used has been approved by the PISG, whose members came from HM Treasury, Audit Commission, DCLG, DfT and CIPFA. There is no intention to refine the approach and the order of the number is considered more important than the degree of accuracy.

1. What happens with slip roads in terms of the GRC figure?

/ There is an allowance built into the rates for items such as sliproads.

1. My R199B road length excludes de-trunked A roads. What should I do about this?

/ The Code states in paragraph 6.7.2.1. that the R199B length should be adjusted for any omitted de-trunked roads.

1. Why was the Red/Amber/Yellow/Green approach for footpaths not adopted for carriageways?

/ The UKPMSapproach is considered superior for carriageways.
When/ if LHAs know more about the condition of their footways, they will probably want to move away from RAYG approach.

1. Independent footpaths – should we simply add these onto our Footways figure on the sheet?

/ Are they footpaths or footways? The code says you should include all assets held on your section 36 register (ie highways) - see section 6.2.1
If they are highways separated from a carriageway, you should include them. If they are just public rights of way, they don't fall under the Code.
That said, if they are metalled and you maintain them like your highway footways, I would be inclinedto say include them with footways since they then constitute a capital asset and the same argument applied to other PROW capital assets in 6.2.2 would apply.

1. Can you explain why if we show Footways separately from Carriageways on the HAMFIG GRC spreadsheet there seems to be a significant difference in the summary valuations?

/ The HAMFIG spreadsheet gives two options - one calculates c/w and f/w DRC's separately. This is the preferred option and is suitable for those authorities that have reasonable f/w inventory data. This method uses your real f/w inventory to evaluate your footway GRC.
The other spreadsheet requires c/w data only; this is for use by authorities with incomplete f/w inventory. It estimates the footway inventory based on typical values and the authority's c/w inventory and provides an estimate of the footway inventory on which the GRC is based. This is only an estimate based on average values from a number of authorities which do have inventory data and it will therefore vary from the actual values of any given authority. If you have actual inventory for your footways, use that and calculate the f/w and c/w GRC's separately.

1. Is footway strengthening taken into account in the default rates?

/ Yes
Street Lighting

1. Should the GRC for street lighting include the connection charge?

/ Yes.
TMS

1. Is there a simple definition of the approach that should be taken to quantifying traffic signal assets.

/ Subject to materiality, traffic signals should be quantified based on the component breakdown shown in Table 4.1 of the Code.
In relation to approach, an authority with very detailed data might know exactly how many signal heads/poles/metres of ducting etc they have and be able to price accordingly. An authority with less detailed data might only know how many signalised junctions they have and might have to (initially at least) take a typical price based on a sample of junctions to quantify how many heads/poles etc there were in an average system.
As long asrates are consistent with the way in which the asset has beenquantified there is unlikely to be a material difference in the two approaches, especially not for GRC where the materiality of minor variations is likely to be low in any case.

1. Should road crossings be included?

/ Road crossings such as pedestrian signals and zebra crossings are included in the asset type traffic management systems.
General

1. How relevant is the Code to a non-highways authority?

/ Street furniture includes items such as litter bins, seats, bus shelters, flower planters. A non-highways authority may have some of these, but they are unlikely to be material. As a matter of good practice an inventory should be maintained of these and their value may well be included as part of your property portfolio.
Non-highway Footpaths (as opposed to footways) and non-highway cycle tracks are not included within the code, so even a highway authority does not need to include public rights of way or private permissive paths. On the other hand, if the cemetery is council owned and run, then the paths should be included as part of their property portfolio (and you might wish to use the code as a guide in valuing and managing these assets).

1. Does the Code cover unadopted roads?

/ Given that unadopted roads are by their nature not adopted by the Council and that the Council has no liabilities in relation to them, they should not be included.

1. Does the LA balance sheet need to be restated to take account of The Code requirements?

/ LA balance sheets should continue to be stated on the basis of historical cost. It is anticipated that infrastructure assets on the balance sheet will be required to be measured in accordance with the Code in due course. There is no current timescale for this, although this position is under review

1. What allowance is made for trees?

/ See paragraph 6.7.8.6 in the Code which states: Trees: trees should only be treated as highway assets where they serve a specifichighway function, such as where they have been provided to act as a sound barrieror provide screening. Other trees, for example those on estate roads that have beenprovided to improve the appearance of the street scene, should be classed as communityrather than highway assets. For the purpose of calculating GRC it is suggested thathighway trees should normally be valued at a nominal cost of £100 per tree. For specialcategories of trees, for example those subject to a tree preservation order where thereis a duty to replace like with like, a higher GRC rate might be applicable. However, suchrefinements will not normally be material to the calculation of GRC.
Structures

1. What are.the precise definitions and significance of columns E ('Construction Form') and F ('Construction Material') in the GRC Structures Sheet?

/ Columns E (Construction Form) and F (Construction material) have no direct impact on the GRC calculation as set in the spreadsheet itself. These were included for reference as it is thought that they would influence determining appropriate unit costs and adjustment factors in particular for MEA/Special Structures. If LAs can comfortably determine the appropriate unit costs and adjustment factors without having to refer to this information, it is not necessary to populate.
General definitions for these are published elsewhere, not in the CIPFA code. The following references can be used:

• Management of Highway Structures: A Code of Practice
• Inspection Manual for Highway Structures

1. In previous guidance used to calculate GRC for culverts, the area of concrete culverts was measured as the developed area of the roof, base and walls. i.e. 2x(span +height)xlength. Is this still the case or are both single and multi-cell culverts now measured by plan area (spanxlength)?

/ Both single and multi-cell culverts are now measured by plan area.

1. There are rates in the spreadsheet for structures, are these default rates that can be used?

/ These rates are example rates in order to demonstrate the functionality of the spreadsheet. They are not to be treated as default rates. However, using this spreadsheet to determine a GRC for structures will be a good way to start. When/ if national, or local rates are determined, they could soon be copied into this spreadsheet.

1. One of the factors that is used to modify the basic cost relates to Environment Sensitivity. Is it intended that this factor should only apply when the bridge is in a specifically designated environmental protection area such as a SSSI or RAMSAR?

/ The ‘Environmental Sensitivity’ factor is not intended only for designated environmental protection areas but should take into account protected flora and fauna. (more guidance on adjustment factors will be made available, so LHAs are not required to populate these at this time)

1. Is there any guidance yet on Bridges and how we are to calculate depreciation for them?

/ A structures toolkit is in the process of being produced and will be available for the 2011/12 returns. For 2010/11 DRC for structures is not required. LHAs are advised to use a simple spreadsheet approach to determine their bridges/ structures GRC. They will only need to amend the unit rates if/ when national, or local rates are determined. If LHAs use the spreadsheet off the CIPFA website, they do not need to populate the ‘additional factors’ at this time.

1. How are noise barriers accounted for?

/ Pedestrian and safety barriers should be treated as street furniture. Trees should only be classed as infrastructure assets (as street furniture) when they are used as a noise barrier

1. If you have a structure that you consider doesn’t fit with any of those listed e.g. a glass bridge what should you do?

/ It should be placed in the closest category, for example special structures.

1. Should retaining walls of less than 1.5m high (supporting Carriageway) be included?

/ Yes.
Life Cycle Planning

1. Chapter 5 in the Code is recommending a life cycle plan for each component identified, with presumably straight line depreciation for each component with a finite life, and with cost of the maintenance activity for the remainder.

In Chapter 4, with reference to the different levels of componentisation, it states that Level 3 components – distinguishes between components that, at least when systems become well developed, may require individual depreciation.
Question: are we to prepare life cycle plans for all Level 3 components in the dry run and 2012/13 for DRC? Or do we only prepare accounts for Level 2 components? / Go to the appropriate level of detail for the asset and what you know about its maintenance.
Simple lifecycle plans for all the assets should be produced first.
Start with the most valuable and work down the list in descending value.
Key Dates

1. What is the effective valuation date?

/ 31 March

1. What is the deadline date for WGA returns?

/ 29th July 2011

1. Is it possible to adopt a phased approach to implementation of the requirements in The Code? Similar to what has been allowed with property assets

/ The Code implementation is based on a phased approach, with WGA requirements increasing each year. In the first year only GRC for carriageways and footways were required. Refer to HM Treasury website for current WGA timetable.

1. Accountants are seeking assurance that the figures provided to them are representative of the situation at year end. This is difficult as the SCANNER surveys are carried out earlier in the financial year and it is difficult to say what has happened in the months after the surveys are completed. Does this mean that we will need to carry out impairment reviews on the data from the SCANNER surveys?

/ Yes, consideration should be given at the end of the year as to whether any impairment is required. This is likely to be an exception
Some defective areas of carriageway will have been repaired between the survey dates and the end of the year; but there will also be some areas which will have deteriorated. The annual depreciation figures from ukpms should be considered for two or three years against budgets first.
Supporting Materials

1. How do we know the spreadsheets on the website are the latest? Would it be possible for an alert to be sent out when a new version of a spreadsheet is uploaded onto the CIPFA website?

/ It will be possible to send notification to HAMP members that a new spreadsheet is available.
New information can/will be notified on the HAMFIG website too.

1. What date are the default rates in the spreadsheet based on. If this is at the beginning of the year has inflation been built into them?

/ The default rates are based on 1st April 2009 to 31st March 2010.
They have been inflated to bring them up to 2010/11.

1. Once the DRC figure has been arrived at how often is it to be reviewed? For example SCANNER surveys are carried out every year should a new DRC therefore be calculated or should the annual depreciation be deducted from the original DRC and the DRC re calculated after 5 years?

/ DRC should be based on the best available information at that time, hence if SCANNNER information is available it should be used.
Carriageway annual depreciation should be calculated every year, using the relevant SCANNER data and the ukpms approach. The differences between years should be checked against the budget allocations for those years.
See section 7.3.2 which, in the early years, recommends re-running the initial DRC calculation annually rather than calculating subsequent DRC by the value of annual movements.

1. Will there be a model to calculate depreciation on Carriageway and Footways for us to produce figures for the July deadline or will authorities have to decide on their own local depreciation methods?

If so do you know what depreciation calculation methods authorities are looking to use? / Carriageway depreciationcalculations are built into UKPMS and are or will be implemented by all UKPMS suppliers for this year; time to initial (recordable) deterioration,-service lives of typical treatments and unit rates will be required. A methodology for footways is included in the code but there is (currently) no tool for implementing this (though it is quite simple). We are looking at some worked examples of such things for the forthcoming CIPFA training; if we come up with something it will be made generally available but it's unlikely to need to be a complex tool for the footway DRC calculations.
Everyone should use the UKPMS method for carriageways and; footways should follow the general process set out in section 9.5 of the code.

1. Para 4.3.6 of The Code refers to PFI and PPP assets. Further clarification is required as to whether PFI/PPP assets, both on and off balance sheet, are required to be valued in accordance with the Code for WGA purposes..

/ PFI / PPP assets should be valued in accordance with the Code for WGA purposes.

1. When will the further guidance on Street Furniture be available?

/ In time for next year’s return – 2011/12