Highways network asset briefing

To support the implementation of the new measurement requirements for the Highways Network Asset, CIPFA is producing a series of briefings.

Briefings

The first briefing focuses on the decisions made by the CIPFA/LASAAC Local Authority Accounting Board following their consultation on the Code of Practice on Local Authority Accounting in the United Kingdom 2016/17. It also includes the Technical Enquiry Service Frequently Asked Question which covers the applicability of the measurement requirements for district councils and the resources available to support the implementation process.

The second briefing covers the update to the Code of Practice on Transport Infrastructure Assets, which will now be known as the Code of Practice on the Highways Network Asset (the Highways Code), the definition of the Highways Network Asset, reporting requirements for 2015/16 and the Central Assurance Process.

The third briefing covers the publication of the new Code of Practice on the Highways Network Asset (the Highways Code), what the chief financial officer will need to consider in relation to the measurement requirements for the Highways Network Asset, commentaries on project implementation, and other guidance issued by CIPFA.

Supporting Materials

There are a number of supporting materials produced by the Highways Asset Management Finance Information Group (HAMFIG).

Background

The Code of Practice on the Highways Network Asset (previously the Code of Practice on Transport Infrastructure Assets) provides guidance on asset management, financial management and reporting.

In 2006, HM Treasury and the Department for Transport commissioned CIPFA to carry out a review of accounting, management and finance mechanisms for local authority transport infrastructure assets. Following consultation, the final review report was issued in 2008, and the government's response, which accepted the review’s findings and recommendations, was published in January 2009. To support implementation, the government asked CIPFA to produce a new code that would deliver robust, consistent financial information to support transport asset management, financial management and reporting.

Implementation is being overseen by a Project Implementation Steering Group (PISG) which includes representatives of the UK government and devolved administrations, local government, and national and local audit bodies. Detailed development work is being undertaken in collaboration with the Highways Asset Management Financial Information Group (HAMFIG) which includes local authority representatives from England, Scotland and Wales.

The Highways Code (previously Transport Code) will also be used to report the assets on a current value basis in Whole of Government Accounts

Code of Practice on the Highways Network Asset

The  Code of Practice on the Highways Network Asset (formerly the Code of Practice on Transport Infrastructure Assets) was published in August 2016.
  

The changes to the new edition of the Code were not intended to change the principles or measurement processes within the Highways Code. However, some clarifications and refinements have been made. The changes to the Highways Code are intended to;

  • reflect the CIPFA/LASAAC decisions on the measurement of the Highways Network Asset,
  • clarify any ambiguities raised in the implementation process, and
  • provide clearer links to the Code of Practice on Local Authority Accounting in the United Kingdom (the Accounting Code), clarifying which of the provisions relate to the financial reporting requirements.
The paragraphs in bold purple font in the Highways Code provide the principles to be applied in order to meet the financial reporting requirements of the Accounting Code. The Highways Code also includes grey shaded paragraphs which represent key asset management principles following commentaries included in the consultation. The paragraphs in bold purple font and the grey shaded paragraphs together form the Highways Code. The explanatory statements in standard type are considered to be a part of the Highways Code insofar as they assist with its interpretation.

Code of Practice on the Highway Network Asset: Guidance Notes


The Code of Practice on the Highways Network Asset: Guidance Notes was published in August 2016, giving both engineers and accountants the practical details they need to value their Highways Network Asset. These guidance notes have been updated to reflect the CIPFA/LASAAC decisions in the Accounting Code and the specifications in the new Highways Code. The aim of this guidance is to;

  • provide finance teams with the details of the valuation approach taken by engineers and the systems and processes involved; and
  • give engineers details of the information required by accountants.
This is to ensure that both parties have an awareness of each other’s needs and to provide information to enable an effective dialogue between the two professions.