Plans for a second round of Major Road Network (MRN) funding are likely to be shelved until after the general election, a top Department for Transport (DfT) official has suggested.
At a conference on Thursday, Jessica Matthew, co-director of the DfT’s Local Transport Directorate, was asked about the plans for ‘MRN 2’.
She replied: ‘We still want to do a little bit more thinking about how MRN is going to be delivered and shaped, or how MRN 2 will work.
‘I think announcements have been made on topping up the existing schemes and people who are affected by that are already in dialogue with my colleagues about how that will work.
‘But on the other aspect of a new MRN 2, I think we want to do a little bit more thinking. There is possibly an electoral event this year; that is likely to colour the size and shape of that thinking.’
Uncertain funding
Last October the DfT pledged £2.6bn for new council road upgrades after 2025 under the Network North plan. An official subsequently described this as a second round of the MRN, adding that the DfT would issue guidance on eligibility this spring.
Although this was said to represent funding saved from curtailing HS2, that cash was not due to be spent until 2029 onwards, making it difficult to distinguish between the pledge of new money and a continuation of the National Roads Fund (NRF).
The NRF was originally said to provide £3.5bn for MRN and Local Major (LLM) schemes from 2020 to 2025, but this has now been cut to £2.36bn.
Network North also included a pledge to use £1.3bn of redirected HS2 cash to ensure the delivery of 70 existing schemes by increasing the DfT’s contribution for ‘most schemes’ from 85% to 100% of the original cost.
Stockport's £43m A34 MRN scheme is going ahead without a 'Network North' top-up
Funding gap
Analysis by Highways has found that with most funding during the current Parliament already allocated, there is a potential funding gap to complete existing schemes for which top-up funding has been pledged that is greater than the £2.6bn pledged for MRN 2.
Ministers stated there would be a top up for 'most existing Major Road Network and Large Local Major road schemes'. The pledge of £1.3bn to top up the schemes implies that funding the first 85% would cost around £7bn, although the existing DfT funding pledges may be nearer £5bn.
Highways asked the DfT where this cash would come from but it referred the issue to the Treasury, which was also unable to say. The Treasury has previously said that local roads spending for the next five years will be set out at the Spending Review that is due later this year.
In the meantime, DfT funding for existing schemes continues to trickle out very slowly. Last month Cheshire East Council complained that the department had again delayed a funding decision on the Middlewich Eastern Bypass. This LLM scheme was promised top-up funding, after being first promised a £46m cash contribution in 2017.
It remains to be seen whether the next tranche of funding will be put towards existing or new schemes – or indeed where the Government will find the cash.
The NRF was originally said to be funded from hypothecated Vehicle Excise Duty (VED) but, as Highways reported in 2020, the Government dropped hypothecation almost immediately and the Treasury has again recently confirmed that VED goes into its ‘consolidated fund’.
With some of the LLM schemes still awaiting funding predating the current Parliament, it also remains to be seen whether councils will put in bids that could join a lengthy queue for funding.
