Exclusive: Local highways facing financial 'cliff edge'

29/05/2020
Dominic Browne

Local highway authorities are facing a funding 'cliff edge' with no sign of what to expect for 2021-2022 despite hopes the local sector was moving to the same five-year funding pattern as the national network.

Chair of the ADEPT engineering board, Mark Stevens, told Highways that there was concern the local sector could fall back to previous patterns of funding 'famines' rather than five-year programmes.

'We have not received notice of funding for 2021-2022 yet and currently we are facing a cliff edge. I have suggested we could have five-year rolling programmes if not the annual allocations. We have not been told our annual allocations past 2020-2021.'

Brexit and the coronavirus pandemic have hit Whitehall hard over the last year delaying all but essential work in many areas, and with the country facing the impact of COVID-19 there are concerns about funding for the 98% of the network covered by local highways, despite Highways England enjoying a cash increase for 2020-2025.

Adding to the concern is the recent ALARM survey figures, which showed the local roads maintenance backlog in England and Wales has increased by 14% to £11.14bn demonstrating that 'the funding is not enough, it needs to be doubled,' Mr Stevens said.

The Department for Transport had been making progress on providing more security for medium-term cash settlements for highways, something that has long been a top priority for councils.

Not only had the Department for Transport provided visibility of the funding profile for 2015-2020, but former minister Jesse Norman has suggested it was an ambition for the department to lock in full five-year settlements as Highways England enjoy for the national network.

Now local highways authorities are in danger of slipping back and are waiting for the Comprehensive Spending Review, which has already been delayed at least twice and is now expected in September, to deliver certainty for next year and beyond.

Mr Stevens suggested that authorities needed to receive the allocations by the autumn in order to be able to plan asset management and deliver the investment properly.

Previously late funding arrangements had seen councils complain they had little or no time even to spend the money, something Mr Norman again previously acknowledged was a problem when in front of the Transport Select Committee.

Funding for 2020-2021, has only just been announced, although highway authorities can enjoy a reasonably bumper funding package including £50m leftover cash from the Pothole Fund and £100m leftover from the Challenge Fund, which was allocated by formula rather than a bidding process.

Councils will also get an extra £500 million in 2020- 2021 through the new £2.5bn Potholes Fund announced at the Budget this year. The remainder of this fund makes up the lion's share of the financial visibility councils appear to have at the moment.

The Government will also make £150m of Local Pinch Point Fund available to local authorities in 2021/22 and 2022/23, as well the remainder of the cash form the transforming cities funding.

Formal letters with the details of all the extra allocations for this year are expected to be sent out to councils by the end of this week or early next week.

Mr Stevens, who is also assistant director for highways at Suffolk County Council, suggested it was possible councils would be asked to respond on a monthly basis to detail how they are spending the extra cash although this was still being considered.

He added this was something the Treasury suggested was useful and agreed feedback was important to building a case for more cash at the Comprehensive Spending Review. However, he suggested a quarterly response could be more practical, given the time it takes to deliver schemes.

He also warned that with little understanding of what funding was coming down the track councils could be tempted to hold over whatever they could for next year, adding another difficulty to councils reporting their roads spend and outcomes.

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