Infrastructure plan puts UK on the right road

Monday’s speech by David Cameron on UK infrastructure and roads in particular marks a new high tide in the government’s appetite to get to grips with England’s infrastructure. Much about the speech was unexpected apart from choosing the highly venerable Institute of Civil Engineers as the place to make it. 

First, it was delivered by the prime minister. This may send positive signals and a few shock waves through industry and Whitehall. The government clearly means business. Secondly a number of sacred cows were dispatched from Number One Great George Street. If followed through, Cameron’s policy statement will lead to hypothecation of some motoring taxes. Tolling for new road capacity looks like a real possibility. The writing is on the wall for road ownership and control as we know it.

Reform has dramatically changed Britain’s water, energy and some transport sectors. The prime minister noted that road investment has been left behind. Highways have been victims of their own success. They have suffered from stop-go funding and few effective means by which to manage demand. Given the Department for Transport’s forecast for road use, these problems can only be expected to get worse.

If the prime minister can wrestle half or two thirds of the money from tax discs away for roads on a permanent basis from Osborne, that would be a remarkable achievement

Arup, along with the RAC Foundation, highlighted in a report last year that there are many successful overseas models for securing road funding that the UK can draw on. By putting more of England’s major roads into public-private control, with a funding stream tied to investment and performance commitments, the stage is set for redefining the way this vital national asset is managed.   

Cameron appeared to be trailing linking vehicle excise duty to road improvements on a regional basis. Readers with very long memories will recall that between 1920 and 1937 that is how it used to work. The Road Fund licence was precisely that, with monies collected and ring-fenced for road construction.

Today tax discs raise around £6bn a year from motorists and industry; money which at present goes straight to the Treasury’s coffers. If the prime minister can wrestle half or two thirds of this away for roads on a permanent basis from Osborne, that would be a remarkable achievement. How much will be earmarked as a dedicated revenue stream for roads is at present unclear. The role of the Highway Agency and local authorities is another area of uncertainty. How will private tolls be overlayed with free roads? Can interfaces between planned new road concessions be managed effectively and smoothly? If there is a surge in road works how will this be managed so as not to bring the country to a halt? Many details remain to be sorted out. Rail privatization is strewn with political hazards for policy makers.

The prime minister stated yesterday that the joint review with Treasury and DfT will be completed by autumn of this year. This is an ambitious timetable. Civil servants and advisors will need to plan their summer getaways carefully if this ambitious initiative is not to get held up by a political storm.

Alex Jan is head of transport at Arup