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Highways Agency "to become publicly-owned corporation" in Government road network reform

The Government has committed to turning the Highways Agency into a publicly-owned independent company as part of its programme for reform of the strategic road network.17 Jul 2013

A new paper, published by the Department for Transport (DfT), sets out its proposals for investing the £28 billion of investment by 2020 guaranteed by the recent Spending Round. This funding, which will include £12bn for road maintenance and resurfacing, is to be guaranteed by legislation so that it will survive future changes in government.

Infrastructure expert Jonathan Hart of Pinsent Masons, the law firm behind Out-Law.com, said that the paper contained "the usual mix of good and disappointing news". In particular, he highlighted the DfT's "clear reluctance to take the debate about road charging/tolling any further forward".

"It may be that discussion around the future A14 project might flush this out, but it is perhaps disappointing that this has not proved an opportunity to start a grown up discussion about how motorists are going to be required, over the long term, to pay for better roads," he said.

"The good stuff includes yet a further announcement of some of the same road projects we have been hearing fro some time now - 52 schemes of which some 16 are 'new' - and a feasibility study for the A303 around Stonehenge. There will be £500m committed to electric power for vehicles, although there will be some difficult questions as to which cities this cash is going to be spent in, no doubt. There is going to be innovation in the application of technology to ease congestion through managed motorways, which has been a major recent innovation for which the Highways Agency can take a fair degree of credit," he said.

The proposals cover motorways and major trunk roads in England, collectively known as the strategic road network. The Highways Agency is responsible for the construction and maintenance of these roads. It is currently an executive agency which is part of the DfT, but will be converted into a publicly-owned corporation with its own five-year 'roads investment strategy' budget, similar to the model already in use on the railways.

According to the report, the additional funding being made available will allow more investment in environmental safeguards such as better landscaping, tunnelling, 'green' bridges and noise barriers. It sets out funding for 52 major projects, including freight route improvement schemes and 221 extra lane miles of 'managed' motorways. This is a new technology-driven approach to the use of motorways, where traffic flow is controlled by features such as overhead gantries, lane specific signals and driver information signs.

As well as the capital projects, the report indicates that £12bn of the funding settlement will be set aside for road maintenance over the course of the next parliament. Of this, £6bn will be used for the maintenance and resurfacing of 80% of the motorways and major A-roads, while the remaining £6bn will be used to tackle the maintenance backlog and reduce potholes on the local roads that make up the rest of the road network.

Infrastructure expert Jonathan Hart said that giving the Highways Agency a "committed income stream" was "obviously a good thing", and would "enable a degree of forward planning for contractors".

"Some analogies can be drawn here with Network Rail; a public company limited by guarantee," he said. "However, there would appear to be some major differences between the successor to the Highways Agency and Network Rail. The paper contains no commitment to the kind of regulated asset based model within which Network Rail currently operates – on the contrary, this only remains an option which may be considered. There are no hard indicators either as to how private finance may be invested in the roads network."

Transport Secretary Patrick McLoughlin said that the proposals outlined in the paper would "bring an end to the short-term thinking that has blighted investment in England's roads". The DfT intends to consult on the necessary changes in the autumn, he said.