How Hammond is seeking to use roads cash to unlock homes

Autumn Statement announcements make clear that, instead of repairing existing road, ministers are focused on using roads funding to pump prime other types of development.

 Roads upgrade: chancellor announced £1.1 billion for local road schemes in last week’s Autumn Statement​​
Roads upgrade: chancellor announced £1.1 billion for local road schemes in last week’s Autumn Statement​​

Chancellor Philip Hammond’s Autumn Statement decision to put £1.3 billion into the upgrading of the UK’s road network has been warmly welcomed by both local authorities and the construction industry. The Local Government Association said that the government had listened to its pleas by directing the bulk of that funding – £1.1 billion – to local road schemes, rather than the comparatively well-funded motorway and A-road network.

Local roads account for 98 per cent of the UK’s road mileage, yet trunk roads get more than 30 times as much funding per mile, according to the LGA. This disparity has led to a £12 billion maintenance backlog, according to an annual local authority survey conducted by the Asphalt Industry Association (AIA). Parvis Khansari, chair of the engineering board at the local authority Association of Directors of Environment, Economy, Planning and Transport, said investment in roads would therefore be best spent addressing this.

"There is demand in both areas, but in maintenance the pressure is even higher, the demand is huge," he said.

However, the Autumn Statement "green book" said that £1.1 billion would go to "relieve congestion and deliver much-needed upgrades on local roads and public transport networks," and £220 million would go to pinch points on the strategic road network – neither of which will address the maintenance concern.

This week, transport secretary Chris Grayling has added a little flesh to the bones, saying the £1.1 billion would be targeted at projects that either eased congestion or unlocked development opportunities for housing or commercial premises that create jobs. It is not yet clear if councils will have to bid for the money, and if so, what the exact criteria will be.

Together with the £2.3 billion Housing Infrastructure Fund, it is clear that instead of repairing existing roads, the government is focused on using roads cash to pump prime other types of development. Jon Neale, head of UK research at property frim JLL, said: "£1.3 billion to improve roads is likely to unlock development sites and promote economic development in many parts of the country."

Experts said that, the allocation to local schemes means the money should be spent quickly, with less time needed to work schemes up. Hence the "green book" outlines a relatively even spend over the next four years. Alastair Reisner, chief executive of the Civil Engineering Contractors’ Association, said: "It’s local spending, so we should see pounds in the ground quite quickly."

But whether this happens in practice remains a concern, partly because local authority highways money is not ring-fenced. So, while last autumn’s spending review confirmed a £5 billion local roads fund and a £250 million pot hole fund for this parliament, the AIA survey found this commitment has not translated in to bigger and more stable budgets on the ground. CECA’s Reisner said: "Our only concern is whether this money gets through. If this is lost in local authorities’ inability to spend that’d be a tragedy for the country."

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