The Highways Agency’s slow response to the widening of the M25 has led to costs soaring by £660 million, according to the National Audit Office.
The spending watchdog said an 18-month delay in finalising the procurement for the London ringroad scheme resulted in the contract being let at the height of the recession in May 2009.
Hence the cost of the plans to widen the UK’s busiest motorway rose by almost a quarter to £3.4 billion.
NAO officials said the government had revealed intentions to widen the motorway to reduce congestion as far back as 2003.
At that point, the Highways Agency was examining cheaper alternatives, such as allowing drivers to drive on the hard shoulder during peak hours.
The NAO said that conventionally procured hard shoulder running schemes on the M25 could save between £400m and £1.1bn.
The report said: “The slow progress on testing HSR and the agency’s commitment to widening meant that the agency limited its options.
“As a result, it did not give itself the opportunity to secure a better price for the taxpayer. The agency is now using HSR on a number of major roads.”
NAO head Amyas Morse said: “The Highways Agency’s PFI project to widen the M25 could have achieved a materially better value-for-money outcome.
“This was partly because the slowness with which the project was taken forward subjected it to the cost effects of the credit crisis.
“The agency should have adopted a more agile approach to procurement, recognising the potential for making savings using an alternative method of relieving congestion - hard shoulder running.
“The agency should have kept its contracting approach open to allow the use of this method.”