Spending Review conceals local road funding cuts

28/10/2021
Dom Browne and Chris Ames

Local road maintenance funding appears to be facing a cut of around £200m over three years following the Spending Review.

On Wednesday, chancellor Rishi Sunak announced £2.7bn over the next three years for local roads maintenance ‘in places not receiving City Region Settlements’.

It follows the trailed announcement of £5.7bn CRSTS funding over five years to seven combined authorities: Greater Manchester (£1.07bn), West Yorkshire (£830m), South Yorkshire (£570m), West Midlands (£1.05bn), Tees Valley (£310m), West of England (£540m) and Liverpool City Region (£710m).

Highways has calculated that authorities outside this CRSTS framework are receiving approximately £969m maintenance funding, suggesting that the £2.7 over three years announced in the Spending Review represents an annual cut of £69m, even before inflation is taken into account.

The CRSTS gives the first chance for consolidated five-year transport funding for areas outside London. This dates back to a 2019 announcement that eligible English city regions would receive £4.2bn of additional funding for local transport networks.

Based on a government statement in August, it seems that most of the additional £1.5bn across the five-year funding srttlement for the city regions comes from adding in Integrated Transport Block (ITB) cash and highways maintenance funding, including the Potholes Action Fund. This cash amounts to around £232m in the current financial year for those authorities.

Chancellor Sunak also announced that there will be £2.6bn from 2020-2025 ‘to deliver a long-term pipeline of over 50 vital local road upgrades including the A509 Isham Bypass, A259 Bognor Regis and A350 Chippenham Bypass which will progress to the next stage of development’.

Two of these schemes fall under the major road network (MRN) and one is a Large Local Major (LLM), two funding streams that were previously combined into the National Roads Fund (NRF). The NRF was originally billed as worth £3.5bn over 2020-2025 but around £2bn of NRF funding was subsequently switched to fund the Road Investment Strategy for the (national) strategic road network.

It remains unclear how much money will be available for MRN and LLM schemes between 2020 and 2025 as the Department for Transport has continued to announce ‘retained’ schemes funded by the old Local Growth Fund as if they constitute new funding.

In total, the Treasury said there would be £8bn for local roads maintenance and upgrades over this Parliament. This compares with previous announcements of around £5.5bn for maintenance (based on current levels) and £3.5bn for upgrades.

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