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CN Briefing: Highways England, Treasury, Roads investment strategy

The future of roads investment is bright, right?

While other sectors such as nuclear, rail and aviation have all faced their very public challenges over the past year, the journey for roads has seemed to be a lot less bumpy.

More than £15bn has been committed by the government to fund the roads investment strategy up until 2020, while a £5bn roads fund is to be put aside by the Treasury to pay for work thereafter.

But scratch the surface and the picture isn’t as rosy as it appears.

I have written before about the sector’s frustrations by the apparent blockage in the pipeline of work from Highways England.

Indeed, a report from Ceca this morning that found that there has been a sharp fall in roads workloads for the first quarter of 2016.

Local roads work is down by 16 per cent year-on-year, while strategic roads work has dropped 29 per cent.

And, though this news is alarming, a bigger issue is looming on the horizon.

As the government moves towards its plan of zero roads emissions by 2050, one of the main sources of funding for roads improvement - fuel duty - could all but disappear, leaving a gaping hole in the government’s coffers.

The notoriously under-funded local roads network is already feeling the pinch.

Needing £12bn extra funding just to get the network up to scratch, local authorities will continue to struggle with roads maintenance budgets set to decline by 35 per cent by 2020.

Past 2021, says Ashphalt Industry Alliance chairman Alan Mackenzie, the situation is only going to get worse.

The strategic roads network is not immune either.

As the money coming in from fuel duty drops, so too will funding for capital projects on the network.

A hypothecated vehicle excise duty will cover some of that burden but even that isn’t 100 per cent secure, RAC Foundation director Steve Gooding tells me.

The good news is these problems are still some years away, so surely contractors, working to their five-year plans, aren’t worried?

“Probably not,” admits Amey development director Dr Mark Brown. “But they should be.”

Dr Brown called on the government to “grasp the nettle early” and consider other funding techniques, such as tolls, to secure long-term funding for roads.

If it doesn’t, the whole sector could be facing a major funding crisis sooner rather than later.

News

One worker has been killed and another injured on the Queensferry Crossing near Edinburgh this afternoon. Both workers were directly employed by main contractor Forth Crossing Bridge Constructors, a consortium featuring Morrison, Dragados, Hochtief and American Bridge International.

The Housing and Planning Bill has had a tortuous passage through Parliament. This week, the House of Lords passed an amendment forcing developers to make affordable housing payments on schemes of under 10 homes, and the FMB is not happy about it.

 

 

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