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DfT misses recommended deadline for financing Highways England schemes


Highways England is still waiting for the government to make a decision on how new roads will be funded with private finance.

It is waiting for a decision so that it can fund projects including the A303 Stonehenge tunnel and access roads to the Lower Thames Crossing.

The House of Commons Public Accounts Committee previously asked the Treasury and Department for Transport (DfT) to outline the structure of new private financing mechanisms by the end of May (today), after chancellor Philip Hammond scrapped PFI/ PF2 in last year’s autumn Budget.

However, a replacement is still no nearer and a Highways England spokesperson has said that funding remains “unclear”. 

Highways England’s two megaprojects were set to be partly funded using the private financed PF2 model. Consequently they were also left out of the DfT’s £25.3bn draft Road Investment Strategy 2 (RIS2) which runs from 2020 to 2025. This was published only a day after the PF2 deals were scrapped.

“We are still awaiting where we are on the funding streams,” a Highways England spokesperson told New Civil Engineer before confirming that decisions on the allocation of funding from the DfT and the Treasury were not expected until later this year.

A DfT spokesperson added: “We are fully committed to both the Lower Thames Crossing and the A303 upgrade. The business cases will be considered this year and the funding arrangements will be considered in due course.”

This is despite the Public Accounts Committee urging the DfT and Treasury to “outline the range of financing structures available to fund [both projects]” by the end of May. The cross party committee of MPs also asked the two departments to explain what impact these funding options would have on the roads budget already published in the DfT’s RIS2. 

Earlier this month, a report by government spending watchdog National Audit Office stated that funding uncertainty had already led to rising costs and construction delays. This could ultimately reduce the Stonehenge tunnel project’s viability.

At the time of the Autumn Budget Highways England chief executive Jim O’Sullivan told New Civil Engineer that a new funding mechanism was needed for the Stonehenge tunnel and for the Lower Thames Crossing approach roads by January this year. 

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