National Highways has cancelled its £297m contract with Skanska for the A46 Newark bypass improvement scheme, citing the announcement of transport cuts from outgoing prime minister Sir Keir Starmer.
Skanska confirmed the cancellation of the contract with a warning that this loss will ‘reduce the European order bookings in the second quarter of 2026' for the Swedish construction company.
When approached for information on why the contract had been terminated, National Highways told Highways that, following the announcement by Sir Starmer that transport funding will be cut by £800m to support an increase in defence spending, any queries regarding this contract should be directed to the Treasury.
In a policy paper explaining the cuts to the Department for Transport, the Government stated: 'The Department will consult on reductions to the third Road Investment Strategy (RIS3) - including the potential cancellation of the A38 Derby Junctions and A46 Newark Bypass schemes, both of which are yet to enter contract and not as far along as other road schemes.'
However, it added that there will be 'stakeholder consultations' before any final decision is made.
Described by National Highways as a ‘critical part' of its investment into making roads more reliable, the project was only granted a development consent order last year and was expected to feature the dualling of 6.5km of the existing single carriageway, providing two lanes in each direction between Farndon and Winthorpe roundabouts near Newark-on-Trent in an effort to improve safety and reduce congestion on the route.
Skanska have been approached for comment.
