Potholes on the road to growth

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Yesterday saw the publication of the 20th Annual Local Authority Road Maintenance (ALARM) survey of local authorities.

Local authorities are asked each year how much it would cost to bring all the roads they manage (around 98% of England's total road network) up to scratch.

The aggregate one-time catch up cost to repair the local road network now stands at £12.16bn, beating last year's record high of £12bn.

Local authorities have reported an increase in their highways maintenance budget over the year, down from an average annual shortfall of £587m last year to £548m this year. However despite this, the time it would take to clear the backlog of repairs has also increased from 12 to 13 years.

This chimes with our recent survey which showed that across all infrastructure networks local roads were seen by manufacturers as having deteriorated the most in the last two years.

We’ve blogged about the reasons why this may be the case when we looked at last year’s figures, a lack of asset management plans and a focus on pothole filling rather than addressing structural road conditions (the former being 20 times more expensive than the latter). Both are then exacerbated by an annual budgeting cycle that sees maintenance work taking place mainly in the middle of winter.

The continuing uptick of the one-time catch up cost for the local road network to £12.16bn this year represents the outcomes that can be expected from expensive reactive maintenance and short term budget allocations - a continuously worsening network.

Local authorities are at best maintaining the current network in its already poor condition.

This matters for manufacturing, as we highlighted previously infrastructure is a key part of supporting rebalanced growth of increased investment, productivity and exports (and our blog yesterday showed that rebalancing is still an issue). Without being able to get products to market, manufacturing is nothing.
Efficient, highly-developed and well integrated transport networks lower the cost of doing business, help attract inward investment and provide access to international markets – critical for manufacturing, an export-intensive sector.

Will things be better next year?

Looking to the future, while the government has budgeted for a small increase in the annual local road maintenance budget (around£190m extra each year) and a six year funding settlement to 2021, this is in no way enough, nor guaranteed beyond the next spending review expected later this year.

Additionally, two-thirds of road maintenance spending is from local authority rather than central government sources. With fiscal consolidation continuing in the next parliament not all authorities will be capable of maintaining this level of funding, especially with other budget pressures.

A recent report by the National Audit Office showed that on average every other local authority budget area was being squeezed, except children's social care.


EEF believes that alternative forms of financing the local road network will be needed if we are ever to get local roads that support better balanced growth.



Head of Business Environment Policy

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