National Highways has finally published its delivery plan update for the current financial year, revealing a larger-than-expected cut of around £1bn to its five-year budget.
Although the government-owned company was reported to have seen a cut during the last two years of the 2020-25 roads period (RP2), the report reveals an apparently retrospective cut to its funding for the third year, 2022-23.
As Highways reported in September, the Office of Rail and Road’s assessment of National Highways’ performance during 2023-24 revealed an ‘expected’ gap of £919m between the promised funding and the cash available within the Department for Transport’s (DfT) business plans for that year and the current financial year.
At that time, National Highways had still not had its budget for the current financial year confirmed, undermining its ability to plan its work, for which it should have had a fixed five-year budget. It began RP2 with agreed funding of £27,358m.
However, its recently published delivery plan update states: ‘National Highways funding has evolved throughout the second Road Investment Strategy (RIS2) period and the funding level for 2024-25 now reflects the figure agreed at Autumn Budget 2024.’
The new document shows five-year funding of £23,042m, nearly £1bn less than the figure of £24,009m in the 2023-24 delivery plan.
By comparison with the earlier document, this reflects a cut of £247m in 2024-25, on top of cuts of £263m last year and £355m in 2022-23. The cut in 2022-23 appears to reflect a retrospective cut of £300m in spending on enhancements.
The latest update shows that over the whole five-year period, National Highways spent around £1.6bn less on enhancements than was expected when the 2023-24 delivery plan update was published in 2023, although it shifted around half a billion of this into renewals to meet 'significant inflationary pressures'.
