Local authorities fear that the 1% employer and employee increase in National Insurance (NI) contributions announced in last week's Budget will trigger a major cutback in highway maintenance spending.
Councils are large employers, and fear that unless government increases capital expenditure allocations in December, increased NI contributions will be met through transport budget cuts.
This would seriously jeopardise delivery of the government's 10 year transport plan.
'It is clearly a fear because local authorities have such a large salary bill, ' said Essex County Council head of transportation John Sanders.
'We are concerned because highway maintenance is such an easy target to hit.'
In the government's 10 year transport plan, funding for highway maintenance was ringfenced. But from now, all local authority capital expenditure will be placed in a single capital pot, raising fears of a return to under-investment.
'Contractors have long and vivid memories of when maintenance budgets were used to bolster front line services, ' said Civil Engineering Contractors Association economic adviser Jim Turner. 'At £600M in increased NI, we are talking a significant portion of the overall budget.'