10th Report - Local roads funding and maintenance: filling the gap Contents

Conclusions and recommendations

The road network

1.Almost every journey begins and ends on local roads. The English Local Road Network (ELRN) is of critical importance in connecting people and driving economic growth. We agree with the then Roads Minister that the ELRN should be treated as an important national asset. Like any asset, it must be managed appropriately. While the ELRN is a national asset, its value as a local asset must not be overlooked. Individuals, families and communities depend on their local road network and it acts as the key arterial system that drives economic growth in our villages, towns and cities. (Paragraph 14)

2.There is unnecessary tension between central and local government—one of which controls the funding for maintaining the ELRN and the other that has responsibility for doing the work. (Paragraph 15)

3.While there was no agreement amongst our witnesses about the governance arrangements for the ELRN, there was some evidence that a profusion of highway authorities, particularly in areas where there are now multiple levels of accountability (e.g. Mayoral Combined Authorities), adds to confusion and diminishes transparency. We recommend that the Government commission an independent review of local highway responsibilities, to evaluate whether current responsibilities sit at the right level. We recommend that the review be completed within 9 months and that the Government respond to it within 12 weeks, setting out what actions it will take as a result. (Paragraph 16)

4.Evidence shows that over the past 20 years spending on maintenance has increased and councils are getting more for their money as the cost of repairing and maintaining roads has fallen. However, the ‘one time catch up’ cost of repairing local roads—now over £9 billion—has seen a moderate increase and local authorities face a significant budgetary shortfall on the completion of necessary works. Road users’ lived experience is at odds with official data—drivers, cyclists and pedestrians all report large numbers of defects, and public portals like ‘Fix My Street’ name and shame egregious examples of maintenance failure. (Paragraph 28)

5.In the past year local authorities paid out £22.5 million in compensation claims for damages arising because of defects in the road surface. We believe this taxpayers’ money would be better spent upgrading the road network and that the case for better maintenance, which should lead to fewer pay outs, is clear. (Paragraph 29)

6.The fact that the ELRN has been allowed to decay to the point where it would take more than a decade to bring it up to a reasonable standard is a national scandal that shows a dereliction of duty by successive governments and individual local councils. The Government must act now to remedy this. (Paragraph 30)

Funding and expenditure

7.We conclude that the current short-term approach to funding local road maintenance is not fit for purpose. (Paragraph 60)

8.We welcome the work the Department for Transport has been doing with the Ministry for Housing, Communities and Local Government and the Chartered Institute of Public Finance and Accountancy on the fair funding review and capitalisation rules, to enable capital funding to be spent on things like pothole repairs. (Paragraph 62)

9.We welcome the then Minister’s statement that he would like to see a five-year funding settlement for local roads. We recommend that the Department should propose a front-loaded, long-term funding settlement to the Treasury as part of the forthcoming Spending Review so that local authorities can address the historic road maintenance backlog and plan confidently for the future. However, we are clear that this must not be an excuse for a budget cut. We recommend the Treasury give the proposal serious consideration given that proactive maintenance provides better value for money than reactive maintenance. We consider it critical that the DfT engage with MHCLG to roll up the revenue support elements of roads funding into a five-year settlement. (Paragraph 63)

10.The DfT should take the lead on consulting with local authorities about the exact nature of a five-year settlement. This should include whether they would like to see a ‘totex’ allocation (i.e. funding that can be spent on capital or revenue, with no restrictions) and whether they want it to be ring-fenced for spending only on roads. It is important that innovation, collaboration and best practice are properly incentivised through any settlement; this should be part of any consultation. The DfT should also include London councils in the consultation to seek their views on whether the London funding settlement is fit for purpose. (Paragraph 64)

11.The then Minister told us that in future, local authorities should be able to borrow against a five-year settlement, allowing them to raise more money to spend on road maintenance. While we welcome this idea in principle we are concerned as to how it would work in practice, given local authorities would still have to repay lenders and roads do not currently generate income. We recommend that in its response to this Report the Department set out what borrowing against a multi-year settlement would mean for local authorities and how such a scheme could work. (Paragraph 65)

Innovation

12.Innovation is essential if the efficiency and effectiveness of local road maintenance is to continue to improve, which it must in the face of limited funding. It is right that the Government stimulates and encourages innovation but the value for money of any investment in innovation is only properly repaid when new technologies, ideas and ways of working are scaled up and available to all. We recommend the DfT, BEIS and Innovate UK collaborate to collate all innovation funding for local roads in one place and effectively disseminate this to local highway authorities. They should establish as far as possible common rules for bidding and assessment to allow local authorities to marshal their resources effectively, and achieve efficiencies and economies of scale in the bidding process. We also recommend that the Government consider how it monitors the innovations it funds and what it needs to do to ensure that a greater proportion of innovations are made available on the widest possible basis. (Paragraph 74)

13.We welcome the DfT’s support for a new digital hub for experts to share and develop innovations. We want to see this active as soon as possible and ask the DfT in its response to this Report to set out how it will be funded, what it is expected to achieve, and how its effectiveness will be assessed. We recommend that DfT produce a report, within 12 months of the hub going live, that assesses the costs and benefits of the new digital hub. (Paragraph 75)

14.We recommend that the Department set out a timeline to show their expectation of how connected and autonomous vehicle technologies will evolve and enter service. This should include the R&D, setting of standards, procurement and deployment of infrastructure on roads needed to support CAVs, maintenance and management of such infrastructure through its lifecycle and showing how additional technology deployed in the roadway affects maintenance and renewal processes. This could be a useful supplement to the Department’s ongoing work around the Future of Mobility. (Paragraph 76)

Data collection and use

15.We believe that local authorities will only be able to make better use of available funds for road maintenance if they can target such funding well; this requires good data. Some of the data local authorities collect on the condition of the road network is passed to the Department for Transport. We are not confident that this data gives the DfT a true picture of the state of the local roads or that any comparison of areas would compare ‘like with like’ and allow meaningful conclusions to be drawn. (Paragraph 92)

16.We welcome the DfT’s review of road condition surveying data and technology. We recommend that, given the previous Minister’s concerns about whether third party data is reliable, the DfT conduct an analysis of the merits of collecting richer data from local authorities and what cost this would represent to the taxpayer. (Paragraph 93)

17.We recommend that, in its response to this Report, the Department explain whether the data it receives from local authorities on road condition is consistent and allows valid comparisons to be made, what it does with such data, how it is analysed and what action is taken on the back of conclusions that it draws. (Paragraph 94)

18.Irrespective of the Department’s view on the merits of it collecting and publishing further data, it should make it easier for the public to report road condition concerns and access local authority road condition data. We recommend that DfT run an innovation competition to develop a platform that the public can use to make online reports about road condition direct to the relevant council and access real-time local road condition data. It could be searchable by factors such as council, constituency and postcode. It could also be used by councils to monitor their own performance and to generate data to allow them to benchmark on a time or geographical basis. (Paragraph 95)

Good practice and collaboration in highway maintenance

19.It is too early to judge what the shift to a risk-based approach will mean for local authority resourcing and effectiveness. We got no clear picture of whether authorities understand what resources they need and the cultural change associated with it. This is unsurprising given that it has taken more than two years for the adoption of the new approach to become widespread. We are concerned that we may have simply replaced the need for prescriptive guidance on asset management with a need for prescriptive guidance on risk assessment. Making the best use of available funding requires the sharing and adoption of good practice. We conclude this is a key role for Government. We recommend that the Department continue to monitor the move to a risk-based approach. By the end of 2021 it should publish a report setting out what effect the risk-based approach has had, how local authorities have adapted and adjusted and whether it has improved their efficiency and effectiveness. (Paragraph 110)

20.We welcome the DfT’s announcement of 31 March 2019 of a new guide on best practice in pothole repair, developed with the Association of Directors of Environment, Economy, Planning and Transport and the establishment of a ‘Review and Audit Group’, in liaison with the highways sector, to ensure the adoption of good practice through the innovation strand of local highway funding. We recommend that the DfT set clear goals for what it wants the guide and the group to achieve. It should set and publish measurable targets. Within 12 months of the publication of the guide and the establishment of the group, the Department should report on the effectiveness of the guide and group, how they have performed against the goals and targets initially set out for them, and what they have achieved. (Paragraph 112)





Published: 1 July 2019