"Fundamental reappraisal" of roads investment model needed says expert as £15bn English package announced

Out-Law News | 02 Dec 2014 | 4:32 pm | 2 min. read

The UK government must be willing to consider "politically unpopular" road charging and tolling if it is to be able to address the increasing demand for major investment in the country's roads, an expert has said.

Transport expert Patrick Twist of Pinsent Masons, the law firm behind Out-Law.com, was commenting on the publication of the government's first 'road investment strategy', which set out plans to increase the capacity and condition of England's roads. He said that delivery of the plans, at an estimated cost of £15 billion, would require "a fundamental reappraisal of the legal and contractual models used by the public sector for investment".

"The central question remains as to where the money to finance the 'roads revolution' is going to come from," he said. "Internationally, road infrastructure is seen as a powerful asset class and the UK road network would undoubtedly be attractive to international investors. But money does not come for free and the question needs to be asked: 'how will we pay for the money, assuming the funding can be secured?' Investors want a return on their investment."

"The idea of ring-fencing the funding for these new schemes by allocating to a standalone 'GoCo' version of the Highways Agency is to be welcomed as an indicator that capital spend could be protected from political interference by a future government – although, it does beg the question as to why these commitments are only being given now, in the last six months of a government at a time when public borrowing is actually rising," he said.

The strategy document included details of more than 100 new road schemes planned for delivery during this parliament and the next, 84 of which had not been previously announced. Planned projects include upgrading the A303 and A358 in the south west of England to a dual carriageway, including a new tunnel at Stonehenge; the completion of the dual  carriageway on the A1 between London and Ellingham in the north east; completion of a 'smart motorway' between Manchester and Leeds; and improved links to the Port of Liverpool.

Alongside the specific projects, the strategy also set out measures which the government said would "improve the lives of communities affected by road upgrades". These included funding to improve cycling provision at 200 locations across the existing roads network and a commitment to 'cycle-proof' any new schemes being developed; and a new £300 million environmental fund to tackle carbon emissions, create new charge points for low emission vehicles and tackle noise pollution.

The money to pay for these schemes was allocated to the Department for Transport (DfT) as part of the government's spending review in June 2013. It has also been allocated a further £12bn for ongoing maintenance of the local and national road networks. From April 2015 the Highways Agency, which is currently an executive agency of the DfT, is to be converted to a government-owned company with its own budget allocated on a longer-term basis, similar to the model already in use on the railways.

"The challenge we have at the moment is that decisions on infrastructure investment are being taken in a strategic vacuum," said transport expert Patrick Twist. "Critical decisions around our infrastructure should be taken against a backcloth of a long-term strategic vision of our need and view of where we see our place in the world economy in the future and not upon which agency can get its project away the quickest."

Twist also warned that the proposals would "take a long time to work through the system" as a result of "bottlenecks" in the planning process, which he said was another sign of the need for a "greater coordinated approach on how projects are brought forward".