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Can the prime minister grab the roads privatisation nettle?

It was an unprecedented moment as prime minister David Cameron spoke passionately for half an hour this week about infrastructure and its value in driving growth the nation’s economic recovery.

It was an unprecedented moment as prime minister David Cameron spoke passionately for half an hour this week about infrastructure and its value in driving growth the nation’s economic recovery.

In fact, Cameron’s vision for a “horizon shift” in thinking, in so many ways, represented an endorsement from the highest level of all of what the profession stands for.

“If our infrastructure is second-rate, then our country will be too,” he told infrastructure bosses at the ICE headquarters.

He went on to speak about his commitment to better trains, and new rail lines such as Crossrail and High Speed 2, and the need to build dependable energy supplies with nuclear power stations and offshore wind.

And he talked about faster broadband, a fundamental review of aviation to update our airports and, of course, reform of the planning system to “unlock sustainable growth, rather than hold it back”.

However, it was his plan to shake up the management of the UK’s road network that grabbed the headlines. It was, after all, the most controversial aspect of his vision.

The road network remains pretty much the last bastion of major publicly funded assets. Except for the M6 Toll road north of Birmingham, a few bridges and the odd toll gate, UK roads are generally free to use.

Yet as every car driver knows, we still pay a huge amount for the privilege of owning and driving a car through road and fuel taxation. And sadly for drivers, little of this cash finds its way to the highways budget.

Instead, most goes towards the nation’s other vital departments, such health, education and social services.

Hence, as Cameron puts it, “we need to look urgently at the options for getting large-scale private investment into the national roads network”.

He is absolutely right to highlight the water industry as an example of using a regulated business model to drive private sector investment. An estimated £80bn has been levered in over the last 20 years.

However, the water industry works because of the very direct link between usage and payment. Regulated and controlled certainly, but directly linked - plus we all now pay more.

Thus, to make a similarly regulated roads model work, the government must rethink car taxation. That will mean hypothecation and will mean strengthening the link between road use and consumer payment via tolling - not least as cars become more fuel efficient or perhaps even electric powered.

And judging from the media reaction so far, none of these options will be easily sold to a sceptical car driving public

Cameron correctly identifies the three failings holding back infrastructure investment as: failure of vision, of financing and of nerve. But I suggest that when it comes to roads, he really only has the latter to worry about.

  • Antony Oliver is NCE’s editor

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