Treasury chief secretary Danny Alexander has promised to build “every road in the Highways Agency’s” pipeline as well as earmarking £10bn for road repairs.
The commitment is part of a pledged £28bn investment in roads over the six years from 2014.
Treasury chief secretary Danny Alexander outlined the plans last week, one day after chancellor George Osborne pledged “the largest investment in roads in half a century” in his Spending Round 2013 announcement.
The Treasury’s Investing in Britain’s Future report, published last week, sets out how the government plans to invest £100bn of public cash in infrastructure.
The move was widely welcomed by the construction industry, although some warned that most of the cash will only be spent after the next General Election.
Industry leaders were quick to welcome the extra cash for highway maintenance.
Of the £10bn committed over the six years from 2015/16 up to and including 2020/21, almost £6bn will be spent at a local level. This is set at £976M a year, an increase of £193M a year on the average annual spend of £783M in the current five year spending period.
“The additional money will help local authorities make more efficient use of their budgets and perform more cost-effective, longer-term, planned maintenance,” said Asphalt Industry Alliance (AIA) chairman Alan Mackenzie.
“We are disappointed that the additional money will not be available until 2015/16, but recognise that this money has to come from savings achieved elsewhere.” Funding for local authorities next year will be just £707M, having fallen steadily year on year since 2010/11 when £871M was available.
Cash for new roads will build gradually, with Highways Agency spending dipping to £1.5bn in 2015/16 before increasing each year to reach £3.8bn in 2020/21.
The Agency’s current business plan has it spending £1.7bn on capital works in the current financial year, increasing to £1.9bn in 2014/15.
Major road schemes promised funding include the previously axed A14 improvement between Cambridge and Huntingdon, which will receive £1.5bn, with construction brought forward by nearly two years to 2016.
Other schemes announced by Alexander include upgrading the A19 near Newcastle, the A21 near Tonbridge and the A63 in Hull as well as junction improvements on the M1, M4, M5, M6, M23 and A38, and the A27 Chichester bypass.
The Highways Agency’s managed motorways programme will also be extended by a further 350 lane kilometres.
High Speed 2 budget increases
Ministers have appointed former Olympics boss Lord Deighton to lead a taskforce to maximise the economic benefits of High Speed 2 (HS2).
Deighton’s appointment came as the cost to build the scheme was revealed to have hit £50bn - the same figure quoted by the government as the value of the economic benefits to be gained from the scheme.
“We need to squeeze every possible benefit from this vital project, leaving no stone unturned,” said transport secretary Patrick McLoughlin.
The HS2 Growth Taskforce will publish an interim report later this year and will submit its final report to ministers early next year.
HS2 will cost £42.6bn - a significant hike from the previous estimate of £33bn. Phase one from London to Birmingham will cost £21.4bn in 2011 prices and phase 2 will cost £21.2bn.
The total price includes a contingency of £14.4bn. But on top of the £42.6bn a further £7.5bn (of which £1.7bn is contingency) will be set aside for rolling stock.
Anti-HS2 groups have described the £10bn cost increase as “amazing”, coming just hours after chancellor George Osborne outlined £11.5bn of “essential” cuts in his Spending Round 2013.
Scheme promoter HS2 Ltd chief executive Alison Munro said that costs for phase one remained “broadly” within the cost and contingency “envelope” of £16.3bn set by the government in January 2012 and that her team would continue to be “focused on control of costs”.
Go-ahead will depend on the “usual” Treasury tests of value for money and deliverability, and few of these projects are shovel ready having been put on hold in the 2010 spending review.
Alexander’s document says it is now for the Highways Agency to set out more detail on the order and timing of the works.
Civil Engineering Contractors Association external affairs director Alasdair Reisner said the Agency would have to work hard to get the schemes ready.
“We are miles down on output,” he said.
“We are at 50% compared with the end of the last government. But the last government did have a fiscal stimulus programme that threw the kitchen sink at roads building, which was not terribly well spent money and created a larger cliff edge than you would have expected.”
In all, over £70bn of transport investment has been pledged for the next parliament, including £22.4bn for Network Rail, £16bn for High Speed 2 and £9.6bn for Transport for London comprising £5.8bn capital grant and £3.8bn of borrowing power.
On High Speed 2 the government has set a new “funding envelope” of £42.6bn for construction costs and £7.5bn for rolling stock. Previously the government had said the scheme would be built for £33bn (see box).
The remaining £30bn of the £100bn pledged for infrastructure will be spent on schools, housing, broadband provision and flood defences.
The cash for flood defences was set out as the first long-term spending plan for the sector.
From 2015 government funding for flood defences is set to rise from £624M per year in line with inflation. But this still falls short of the £664M seen in 2010/11.
The budget for the current financial year is £574M, rising to £613M in 2014/15.
The cash for flood defences came a day after Osborne revealed that government had struck a deal with insurers to protect homeowners in flood risk areas from high premiums.
No government cash is set aside for energy, but the announcement includes measures to support construction of new electricity generation facilities by setting prices for low carbon electricity generation excluding nuclear.