The ICE has warned the government that it will run out of money for roads within 10 years unless it replaces fuel tax with a longer term method of raising money.
In its latest policy paper Pay As You Go – Achieving Sustainable Roads Funding in England, the ICE has repeated called for the government to introduce a new method of road tolling to fund highways infrastructure work.
The ICE first urged the government to implement a “pay-as-you-go” roads model, in its annual State of the Nation report published in October 2018.
It warned that the rise of electric vehicles would lead to a drop in government income from fuel duty and consequently new funding streams must be found. The State of the Nation 2018: Infrastructure Investment report adds that 47% of the population would be in favour of a new system of road user charging, if it replaced other road taxes.
The latest report now recommends action is taken to ensure a “pay-as-you-go” system is in place by 2030 at the latest.
ICE vice president Rachel Skinner said: “Ensuring a fair, reliable and sustainable way of securing funding to improve and maintain our roads is crucial to safeguarding the UK’s economic and social well-being. Britain moves almost three times more goods by road than by water and rail combined, and almost 90% of the population’s journeys are made this way.
“Today’s two main sources of UK roads revenue – fuel duty and vehicle excise duty – are both in danger of significantly declining by 2030 and the landscape around vehicle fleets, new technologies and fuel usage is changing fast.”
Skinner added: “Now is the time for the government to reshape the future funding of our road networks, given their crucial role in society and our future connectivity, to ensure a new system is up and running before it’s too late.”
The report also recommends that any pay-as-you-go model should be based on factors including: vehicle weight, emissions, noise, overall efficiency and intensity of use.
Recommendation 1: The following principles should be adhered to in developing a future pay as you go (PAYG) model:
- Pay as you go model should consider a range of issues, including: vehicle weight, emissions, noise, overall efficiency and intensity of use
- Pay as you go model should not raise more than is collected from existing VED and fuel duty revenues, and care should be taken to avoid additional financial so as to create additional financial pressures for people from the poorest socio-economic groups
- The government should consider a road ownership model for the strategic roads network where the government or private companies collect revenue, manage data and maintain roads on a concession basis
- In view of the existing simplicity of collecting VED and fuel duty revenues, collection methods underpinning any pay as you go model should be transparent, simple to understand and protect the privacy of all users.
Recommendation 2: The government must examine the tax revenue implications of electric and self-driving vehicles within the scope of any further consultation about new regulation or legislation forself driving cars
Recommendation 3: A pay as you go replacement for road-related taxes should be in place by 2030 before revenues from fuel duty decline significantly, or connected and autonomous vehicles become commonplace
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