Funding

Types of Funding

Highway maintenance funding can be allocated from capital or revenue sources. Capital is primarily for improvements, such as new roads, or redesign such as additional lanes, new traffic information and control systems or structural renewal. Maintenance expenditure, mainly funded by revenue, covers repair of worn or damaged roads and facilities, both short term patching or a permanent replacement. In addition to maintenance of the road surface itself, it also includes the cost of lighting, footway repair and cyclical maintenance such as cleaning and grass cutting.

Planned, preventative maintenance, which involves resurfacing at regular intervals, is the most cost effective method of keeping the road surface in good repair.  The experience of the highway maintenance industry is that it is at least 20 times more expensive to continuously patch and mend than it is to undertake long lasting repairs. Ensuring that the highway network is durable, safe and fit for purpose is vital to avoid unnecessary traffic congestion and delays, and to make best use of existing assets.

 

Sources of funding

The main sources of funding are central government and local government. Most UK local authorities receive about three-quarters of their funds from central government. 95 per cent of the country's roads are local roads, their maintenance being the responsibility of local authorities. The remainder  - motorways and dual carriageways - are the responsibility of the Highways Agency.

Source: DFT 2012

 

 Source: HM Treasury Autumn Statement 2012, HM Treasury Spending Review 2013

 

Source:  HM Treasury Investing in Britian's Future 2013

 

Local authorities have discretion to prioritise budgets. However, the main central government funds towards local road maintenance in England are part of block grant allocations from the Department for Transport, within specific headings such as maintenance, transport projects, and public transport support and so on.

 

Autumn Statement 2012 Maintenance Announcements

The 2012 Autumn Statement announced an additional £333 million in maintenance funding, with £215 million going specifically towards essential local road network maintenance. This funding is in addition to the £3 billion government is providing for councils in England from 2011 to 2015 for highways maintenance.

£215 million additional capital funding for local authorities will be distributed as follows:

  • £140 million will be released in 2013/14
  • £75 million will be released in 2014/15

 

Spending Round 2013 Maintenance Announcements

The 2013 Spending Round emphasised efficiency savings and an expansion of funding for roads. Specific allocations towards local or strategic networks are yet to be determined at the time of the 2013 Spending Round announcement.

  • £6 billion in maintenance spending in this Parliament
  • £12 billion in maintenance spending in the next Parliament

 

Investing In Britain’s Future 2013 Maintenance Announcements

After the 2013 Spending Round, the Chief Secretary of the Treasury made a funding announcement. In the interest of repairing the national and local road network, a commitment of £10 billion for network repair has been announced. It is anticipated that these repairs will impact 80% of the national network by 2020/21.

  • £6 billion to local authorities to repair the local road network
  • £4 billion to Highways Agency to repair the strategic network

 

 

 Road Maintenance Funding  - Inflation Adjusted 2007 - 2011, £millions

 

Year

Funding adjusted for inflation

Sum of 4 year period

Potholes funding

Sum of 4 years incl. potholes

SR 2007

2007-08

809.83

 

 

 

2008-09

803.83

 

 

 

2009-10

814.04

 

 

 

2010-11

860.97

3,288.68

84

3,375.19

SR 2010

2011-12

806.00

 

200

 

2012-13

760.00

 

 

 

2013-14

712.47

 

 

 

2014-15

653.97

2,932.44

 

3,132.44

Real terms cut between SR periods

356.24

 

242.75

Source: LGA, May 2011 

Adjusted for inflation, English local authority's road maintenance funding will be worth about £100 million less per year in real terms in 2014-15 compared to 2010-11 (though in nominal cash terms funding will look a little higher). However, inflation is set to rise further and worsen this gap.