Highways England running £2.9bn over budget, ORR finds

Dominic Browne

Highways England’s major schemes are currently running £2.9bn over budget as the government-owned company continues to try to get costs under control, according to independent monitor the Office of Rail and Road (ORR).

Following a revision of its first Road Investment Strategy (RIS 1 - covering April 2015 to March 2020), Highways England had to push schemes back into the second road investment period up to 2025 and this appears to be where the brunt of the cost overruns now reside.

In its annual assessment report on Highways England, the ORR said: ‘The revised plans mean that, of the 112 major schemes originally planned to start works in the first road period, 85 are now planned to start by March 2020.

‘Funds released by this process have been retained to offset cost pressures elsewhere in the portfolio. The company’s forecast total costs for its RIS1 major schemes are currently £2.9bn higher in road period 1 and road period 2 than originally assumed. This partly reflects increased scope for some schemes and immature scheme estimates when RIS1 funding was set.’

Highways England’s forecast capital costs for RIS 1 are now £438m higher than its funding despite the cut backs, although it is making progress on cutting this figure down.

‘Its [Highways England’s] forecast costs have reduced, but remain above funding, partly reflecting delivery of additional work and planned over programming. It is working to manage costs and has instigated a management action plan to address the difference, which has so far identified £164m of potential savings, which will reduce the difference to £274m.’

In 2017-18 Highways England spent £3.4bn, with overall expenditure £162m (5%) above budget. This was mainly due to capital spend of £2.3bn being £141m (6%) above budget. Highways England does appear to be making good progress with its wider efficiency and cost saving targets, the ORR found, although it did ask for ‘more evidence over the next year to support the claimed levels of efficiency’.

‘The company has a target to deliver £1.2bn of capital efficiency savings by the end of this road period. It has reported £226m of efficiencies in 2017-18. This would bring the cumulative efficiency improvements to its capital programme in the first three years of the road period to £486m, against an internal milestone of £377m. The efficiency reported to date is 29% ahead of its internal target and represents 40% of the target for the first road period.’

Designated Funds

Elsewhere, Highways England appears to be too slow in spending its ringfenced cash. Worth £675m in the first road period, these designated cash pots are split into five areas: air quality; cycling, safety and integration; environment; innovation; and growth and housing.

At the end of 2017-18, Highways England had spent £176m of its ringfenced funds, which is 26% of the total available in this road period. These funds underspent by £80m (43%) in the last financial year ‘because of delays on these work programmes, particularly for the air quality fund’.

‘There is particular risk to delivering the intended investment through the air quality fund. We propose that it should now review options for addressing this with government,’ the ORR said. It also highlighted that on top of the slow delivery against these designated funds, the spending is now backloaded and making the delivery challenges even harder.


On safety the ORR found that Highways England is at risk of missing its challenging targets of reducing the number of people killed or seriously injured on the network by 40% by 2020, although a change in police reporting has resulted in an increase in recorded incidents.

‘The latest available statistics show that 2,005 people were killed or seriously injured on the strategic road network in 20162 – a 12% increase on the previous year. This included 231 fatalities, which is 3% higher than in 2015.’

‘One reason for the reported increase in the number of people killed or seriously injured is a change to how police forces record road casualty data. Approximately half of English police forces adopted a new system (CRASH- collision recording and sharing) between the end of 2015 and early 2016. Forces that increase in killed or seriously injured on the strategic road network in 2016, compared to a 5% increase for those forces that did not.’

The ORR did find that Highways England is on track to achieve 90% of travel on 3-star (safety rating under iRAP/EuroRAP analysis) roads by 2020 but failed to give an update on the more challenging task of ensuring that the majority of those roads with 1 star and 2 star rating have improved to 3 star.

Road surfacing

Highways England has made a major push on improving road condition, after missing its target in 2016-17. This year a 24% increase in investment meant that 95.2% of the network did not require further investigation. This is above the target of 95%, and an improvement on the 94.3% recorded in 2016-17.

‘It delivered significantly greater volumes on the majority of asset types than it planned, and in-year forecasts show considerable variability. Its renewals delivery was highest in the last three months of 2017-18. Delivering more during the winter months may impact on the quality and efficiency of work,’ the ORR said.

Smooth traffic flow

Highways England is demonstrating excellent performance on smoothing traffic flow and keeping open lane capacity, even though traffic on the strategic road network has increased.

‘Lane availability on the strategic road network was 98.3% in 2017-18, which is above the target of 97%. Highways England expects availability to reduce during the road period, but remain above target. This reflects the increased work on the network as the RIS1 investment plan gathers pace.

‘The company also met its incident clearance target in 2017-18 – clearing 87.9% of motorway incidents within one hour, against a target of 85%. This is an improvement on performance in 2016-17, when it cleared 85.9% of incidents within one hour.’

Despite this road user satisfaction was at 88.7% in 2017-18, which is below the target of 90%, and also below last year’s score of 89.1%.

Areas requiring 'focus'

The ORR said the following areas ‘require focus from the company in 2018-19’:

  • Customer satisfaction. Implementation and monitoring progress against its customer satisfaction improvement plan for 2018-19.
  • Efficiency evidence. Further development of top down efficiency evidence to support progress against its key performance indicator.
  • Ringfenced funds. Increasing the pace of delivery through ring-fenced funds in 2018-19, continuing to strengthen its management of the funds, and addressing the recommendations that are set out in our in-depth review.
  • Managing costs. Taking action to address the difference between forecasts capital costs and its funding for the road period.
  • Planning for RIS2. Continuing work to develop plans for the second road period. In particular, developing a robust strategic business plan, and presenting efficiency evidence. Also continuing to engage closely with stakeholders as it develops more detailed plans.
Highways jobs

Community Services Manager

Copeland Borough Council
Competitive Salary
Looking for an energised and enthusiastic candidate to lead and focus the service through the challenges set by the Resources and Waste Strategy. Moresby, Whitehaven
Recruiter: Copeland Borough Council

Highways Infrastructure and Maintenance Manager - Highways Network

Bridgend County Borough Council
£37,813 - £40,760 per annum
An exciting opportunity has arrived inside the Highway Asset Maintenance Team within the Communities Directorate. Bridgend (Pen-y-bont ar Ogwr)
Recruiter: Bridgend County Borough Council

Business Support Officers - Transport Team (2 Jobs)

Kirklees Metropolitan Council
£19,554 - £21,166
Within the Transport Team you will be required to work flexibly in accordance with the needs of the service, which can men... Kirklees, West Yorkshire
Recruiter: Kirklees Metropolitan Council

Transportation Planning Manager

Brent Council
£55,638 - £58,779 p.a. inc.
ou will have an excellent knowledge and understanding of transport policy at both local and national level. Expertise of both people and... Wembley, London (Greater)
Recruiter: Brent Council

Commercial Contract Supervisor

Wirral Borough Council
£30,507 to £32,878
No holding back. No excuses. Just change Wirral. Wirral, Merseyside
Recruiter: Wirral Borough Council

Technical Officer – Pest Control

Kirklees Metropolitan Council
£19,554 - £23,836
This job is temporary for up to 11 months from the date of appointment to cover the absence of the current post holder. Kirklees, West Yorkshire
Recruiter: Kirklees Metropolitan Council

Divisional Director Neighbourhoods & Sustainability

Glasgow City Council
£83,708 - £95,232 (LDR3a, Grade 11)
This innovative role will contribute to the Council Strategic Plan Theme of A Sustainable Low Carbon City Glasgow, Glasgow City
Recruiter: Glasgow City Council

Business Support Officer - Bereavement Services

Kirklees Metropolitan Council
£18,795 - £19,171
You will be required to work front line with customers who are ordering memorials, our customers may be... Kirklees, West Yorkshire
Recruiter: Kirklees Metropolitan Council

Senior Traffic Engineer

East Riding of Yorkshire Council
£32.029 - £34.788
We seek an enthusiastic and experienced traffic engineer to manage our Traffic Team. East Riding of Yorkshire
Recruiter: East Riding of Yorkshire Council

Principal Transport Manager

Be First
Competitive Salary
As our Principal Transport Manager, you will deliver the Local Implementation Plan, ensuring the £2.4million TFL budget is used effectively London (Central), London (Greater)
Recruiter: Be First

Highway Operations Manager

Croydon London Borough Council
£43,590 - £45,585
We are seeking an enthusiastic, motivated and well organised highway operations manager Croydon (City/Town), London (Greater)
Recruiter: Croydon London Borough Council

Structures and Watercourse Manager

Croydon London Borough Council
We are seeking an enthusiastic, motivated and well organised manager to look over the structures team and wider Highway section. Croydon (City/Town), London (Greater)
Recruiter: Croydon London Borough Council

Chartered Environmental Health Traineeship

Kirklees Metropolitan Council
National Minimum Wage (Age appropriate) plus enhancements for night time working
During your two years with us you will... Kirklees, West Yorkshire
Recruiter: Kirklees Metropolitan Council

Project Managers & Engineers (Highways/Transport Team)

Southwark London Borough Council
£36,486 - £43,404
If you have the relevant experience and you think you could contribute to our enthusiastic team environment, then we’d be delighted to hear from you. Southwark, London (Greater)
Recruiter: Southwark London Borough Council

Environmental Health Technician

North West Leicestershire District Council
Band E, £25,295 - £28,785 per annum
The successful candidate will get the opportunity to undertake a rich variety of food safety, workplace health and safety and public health duties. Coalville, Leicestershire
Recruiter: North West Leicestershire District Council

EHO/Surveyor Private Sector Housing

Brent Council
35,724 - £41,706 p.a. inc.
The council is pursuing a far-reaching transformation agenda that better meets the needs of our community so it is an exciting time to join us. Wembley, London (Greater)
Recruiter: Brent Council

(Senior) Environmental Health Officer/Enforcement Officer

Brent Council
£35,724 - £41,706 p.a. inc.
Looking to appoint Environmental Health Officers to join our Food and Health & Safety Team, covering the... Wembley, London (Greater)
Recruiter: Brent Council

Strategic Manager Highways and Transport

Isle of Wight Council
£65,620.00 to £70,915.00
Are you are looking for an ambitious and rewarding career move to one of the best places to live and work in the country? Isle of Wight
Recruiter: Isle of Wight Council

Senior Technician - Network Management

West Berkshire Council
£22.911 to £28.785 per annum (Grade G)
Looking for a Senior Technician who will have the opportunity to help in the design and construction of a variety of highway improvement projects. Newbury, Berkshire
Recruiter: West Berkshire Council

Senior Technician - Asset Management

West Berkshire Council
£22.911 to £28.785 per annum (Grade G)
You should be educated to HNC level (or equivalent) with at least 3 years post qualification experience relevant to the provision of this service. Newbury, Berkshire
Recruiter: West Berkshire Council

Highways on Fridays

Register now!

Latest Issue

latest magazine issue

Valuing our roads: What is a network worth?

Also inside:

Traffex review 

Diary of a flood.

Beautiful roads

Live Labs exclusive briefing 

View the latest issue

Latest Video