“Legislation will be
introduced to… enable roads
to be built at pace,
including the Lower Thames Crossing;”
- A strong transport network is essential for economic
growth. It allows freight to run smoothly, helps businesses run
more easily, and gives people better access to jobs, education,
and wider opportunities. Improving vital road infrastructure is
an important part of strengthening the country's economy, as
well as delivering safer and more
reliable journeys for people.
- The Highways (Financing) Bill will enable a new financing
approach to fund large-scale road schemes, supporting the
Government's commitment to deliver a modern transport network
that helps people get to where they need to more easily and
safely. The Bill enables the delivery of schemes through
private investment, reducing the financial burden on taxpayers
while ensuring strong regulatory oversight to
protect the interests of
users.
- The Government is already delivering on improving the road
network through investing £27 billion to make everyday journeys
on motorways and major A roads safer, smoother, and more
reliable for the people and businesses that depend on them. A
record £8.4 billion of this will be invested in renewing ageing
assets across the network, strengthening the performance and
resilience of the network through better road surfaces, clearer
signs and modernised roadside technology. The Government is
also investing a record £7.3 billion over the next four years
to repair and renew local roads and fix potholes.
What does the
Bill do?
-
The Highways
(Financing) Bill
will introduce
a new
Regulated Asset
Base (RAB) funding
model to
unlock greater
levels of
private capital
investment in road
infrastructure. This will supplement the
work already done by National Highways in England to maintain
and increase road capacity and improve the road network to
help people travel around more easily.
-
Introduce a
licence regime to allow
private companies, as licence holders, to deliver key road
schemes to improve the road network. The
Bill will set out the powers and responsibilities of the licence
holders.
-
Name an independent regulator to provide strong
oversight of licence holders, to ensure that the
infrastructure built under this model remains well
maintained, efficiently managed, and provided at a fair and
proportionate cost to users.
-
Introduce backstop measures to protect vital publicly
used assets managed under the model, helping ensure
that the roads remain open even if the private company fails.
- The RAB funding model will support the delivery of vital
road infrastructure projects across England in future. The
Government expects that the Lower Thames Crossing will be the
first road scheme to use this model.
Territorial extent and
application
- The Bill will extend to England and Wales, and apply to
England only.
Key facts
-
Delivering road schemes effectively and affordably is
essential for the UK's future economic prospects and to help
people get around more easily. Over 85 per cent of
passenger journey kilometres are made on roads, as
well as around 80 per cent
of freight journeys.
-
The RAB model that the Bill will deliver offers a
long-established way of financing major infrastructure in
England. It has been successfully used in sectors
like energy and aviation. Most recently, it has been used on
projects such as the Thames Tideway Tunnel and the Sizewell C
nuclear project. Applying the lessons learned from those
projects will enable the model to work even better in the
roads sector.
-
By establishing an independent regulator as part of
the RAB model, the Government can ensure transparency in
operations, clear performance standards,
and protection
for users. If the regulated
company does not meet the standards required, the regulator
can take enforcement actions – for example by issuing the
company with penalties or ultimately by revoking its licence
to operate the road.
-
The Chief Executive of Logistics UK, , said that
“…A reliable road network is critical for the UK's
logistics sector and the nation's economic prosperity, with
delays and costs caused by poor infrastructure felt by
businesses and consumers alike. It is estimated that every £1
invested in the
Strategic Road Network
returns over £2 to
society, and a reliable
road network is also critical
for increasing the resilience
of the UK's supply
chain by enabling
better connectivity
with all
other modes
of freight
transport.”
-
The multinational energy company, Iberdrola,
states that “The RAB model offers stability
and predictability: investors
know they will be
able to recover their
investment over time, while consumers benefit from tariffs
controlled by the regulator. This balance makes the RAB an
effective tool for attracting private capital
to long-term strategic
projects, reducing perceived
risk and therefore the cost of
financing.”
