All change

Published on 30 January 2025

In July 2024, a new Government entered office with a very different set of priorities. What does it mean for the roads programme?

The very short answer is that we still don't have all the answers. In Spring 2025, there will be a spending review, in which the fate of a number of road projects will finally be decided. They could stay, or be replaced with other road projects, or be scrapped altogether.

However, we can say some things with certainty. Some big ticket schemes have been cancelled, for example. And the settled programme of five-year Road Investment Periods has already been disrupted.

In this post we are going to attempt the impossible: we are going to try and take stock of the English trunk roads programme, a business that is much more complex and opaque than it first seems. Along the way we will discover just how far off target the programme is.

What we thought we knew

A decade ago, English trunk roads underwent a major change. Vehicle Excise Duty (VED or road tax) was ringfenced - “hypothecated” is the Treasury jargon - meaning that income stream was all going to be spent on the roads. A government-owned private company called Highways England (since renamed National Highways) was formed to build and operate roads at arm’s length. And then, based on the model used by the privatised railways, strategy was set in five-year Road Periods, for which funding would be agreed in advance. Each Period was guided by a Road Investment Strategy (RIS).

RIS1 ran from 2015 to 2020, offering nearly £15bn of investment, and we wrote about the changes back in 2017. We’re now at the tail end of RIS2, which started in 2020.

The plan seemed good. Agree the money and programme of works, and then let National Highways crack on with it. Government micromanagement was removed, and instead, the company and its supply chain had longer-term certainty about what would be done and how it would be paid for. Stop-start road construction and maintenance would become a steady, predictable production line, improving efficiency.

The A30 between Chiverton and Carland Cross, a RIS2 upgrade that was recently completed. Click to enlarge
The A30 between Chiverton and Carland Cross, a RIS2 upgrade that was recently completed. Click to enlarge

We already knew, by the start of 2024, that the production line wasn’t moving smoothly. Inflation meant that a funding package agreed in 2020 could no longer pay for everything on the RIS2 shopping list; meanwhile, ministerial approval for schemes has never been forthcoming in a timely manner, with some projects languishing in Whitehall in-trays for years before they could begin.

In parallel, the Smart Motorways programme, a big slice of RIS2, was cancelled with considerable fanfare. Several hugely expensive Smart Motorway contracts, already signed, were scaled back to become maintenance schemes, delivering roadworks and congestion for several years without any capacity improvements; meanwhile, costly new projects to retrofit additional emergency lay-bys were added in a hurry.

As a result, the plan for RIS3 has been redrawn. Instead of more new projects - some of which had been in development since RIS1 (we covered that at the time too) - it would instead be a “catch up” period where the unfinished business of RIS1 and 2 could hopefully be addressed. Any new schemes would have to wait for RIS4, which begins in 2030.

That’s where we were when the election delivered a change of Government.

What we know now

Since July, the new Labour Government has made a series of announcements about individual schemes.

  • The A27 Arundel Bypass was the first to be canned, fulfilling a manifesto promise to divert its budget towards fixing potholes nationwide.
  • The July spending review saw the cancellation of the A303 Stonehenge Tunnel.
  • Six further schemes that had yet to start were then abandoned in the autumn budget.
  • At the same time another ten unstarted projects were placed “under review”, their fate to be announced in the spring.

All of this was a matter of cost. A £22bn “black hole” had been found in Government funding, so some promised spending had to go by the wayside, while newer pressing commitments had to be paid for. Scrapping big-ticket road projects was one way to push down the Treasury’s outgoings.

With all the changes to the supposedly settled and stable RIS2 programme, we thought it might be time to have a look back at the list of projects that were announced back in 2020, and see how they are all getting on.

The following is the full list of RIS2 projects, as originally announced, and their current status.

KeyCompleteUnder construction or approvedIn planning, start date unclearCancelled
RegionSchemeStatus
The NorthA1 Morpeth-Ellingham duallingCancelled in autumn 2024 budget
A19 Down Hill Lane junctionCompleted 2022
A1 Birtley-Coal House wideningUnder construction, complete 2025
A66 Northern Trans-Pennine improvementsNot started. Placed under review in autumn 2024
M6 South Lancaster J33aBecame a local authority scheme for a link road to J33, then cancelled due to rising costs in 2023
A585 Windy Harbour-SkippoolCompleted 2024
M60 J18 Simister IslandNot started. Placed under review in autumn 2024
A61 Westwood RoundaboutCompleted 2021
A5036 Princess WayCancelled in autumn 2024 budget
A628 Mottram Moor Link and A57 LinkWill be built, confirmed in autumn 2024 budget
M6 J19 improvementCompleted 2022
M62 J20-25 Smart MotorwayCancelled spring 2023*
M6 J21a-26 Smart MotorwayCompleted 2024
M56 J6-8 Smart MotorwayCompleted 2023
The MidlandsA46 Newark Bypass duallingNot started. Placed under review in autumn 2024
A38 Derby JunctionsPlaced under review in autumn 2024
M54-M6 Link RoadNot started. Placed under review in autumn 2024
A5 Dodwells-LongshootCancelled 2021
M42 J6 improvementUnder construction, complete 2025
A46 Coventry Junctions - BinleyCompleted 2023
A46 Coventry Junctions - WalsgraveIn planning, no start date
M40/M42 interchange Smart MotorwayCancelled spring 2023*
The EastA47 North Tuddenham-Easton duallingWill be built, confirmed in autumn 2024 budget
A47 Blofeld-North Burlingham duallingWill be built, confirmed in autumn 2024 budget
A47 Great Yarmouth JunctionsCancelled in autumn 2024 budget
A47 Thickthorn JunctionNot started. Placed under review in autumn 2024
A47 Guyhirn JunctionCompleted 2022
A47 Wansford-Sutton duallingWill be built, confirmed in autumn 2024 budget
A428 Black Cat-Caxton Gibbet duallingUnder construction, complete 2027
A5 Towcester Relief RoadChanged to minor improvements through town, consultation closed 2023, no start date announced
A120 Tendring/Colchester Garden CommunityIn planning, no start date announced
A12 Colchester/Braintree Garden CommunityCancelled 2020
A12 Chelmsford to A120 wideningNot started. Placed under review in autumn 2024
M11 new J7aCompleted 2022
M25 J25 improvementCompleted 2022
M25 J28 improvementUnder construction, complete 2025
Lower Thames CrossingNot started. Placed under review in autumn 2024
A1(M) J6-8 Smart MotorwayDeferred to RIS3 in 2019, cancelled spring 2023*
The South and WestM5 J10 and Link RoadNot started. Placed under review in autumn 2024
A417 Air Balloon duallingUnder construction, complete 2027
A2 Bean and EbbsfleetCompleted 2022
A249 Swale Transport InfrastructureUnder construction, complete 2025
M2 J5 improvementUnder construction, complete 2025
M25 J10 improvementUnder construction, complete 2025
A303 Amesbury-Berwick Down [Stonehenge Tunnel]Cancelled in July 2024 spending review
M3 J9 improvementNot started. Placed under review in autumn 2024
A303 Sparkford-Ilchester improvementUnder construction, complete 2025
A358 Taunton-Southfields duallingCancelled in autumn 2024 budget
M27 J8 improvementCancelled in autumn 2024 budget
A31 Ringwood wideningCompleted 2022
A27 East of Lewes PackageCompleted 2023
A27 Arundel BypassCancelled in July 2024 spending review
A27 Worthing and Lancing ImprovementCancelled in autumn 2024 budget
A30 Chiverton to Carland CrossCompleted 2024
M25 J10-16 Smart MotorwayCancelled spring 2023*
M3 J9-14 Smart MotorwayCancelled spring 2023*
Additional schemes added since 2021ERA Retrofit: M1 J16-19Under construction, complete 2025
ERA Retrofit: M1 J13-16Completed 2024
ERA Retrofit: M1 J30-31Under construction, complete 2025
ERA Retrofit: M1 J23A-25Under construction, complete 2025
ERA Retrofit: M1 J28-30Under construction, complete 2025
ERA Retrofit: M1 J32-35AUnder construction, complete 2025
ERA Retrofit: M6 J13-15Completed 2024
ERA Retrofit: M6 J21A-26Under construction, complete 2025
ERA Retrofit: M5 J4A-6Under construction, complete 2025
ERA Retrofit: M20 J3-5Under construction, complete 2025
ERA Retrofit: M25 J5-7Under construction, complete 2025
ERA Retrofit: M24 J23-27Under construction, complete 2025
ERA Retrofit: M3 J2-4AUnder construction, complete 2025
ERA Retrofit: M4 J10-12Under construction, complete 2025
ERA Retrofit: M27 J4-11Under construction, complete 2025

If all had gone exactly to plan, all of those schemes would either be under construction or complete by the end of RIS2 - or in other words, by the end of March this year.

As it stands, out of 57 original projects, we count 15 that have been completed. A further 13 are under construction or starting soon; 10 are under review; 3 are in planning with no start date announced; and 16 have been cancelled.

Graph showing the number of RIS2 schemes in various states of development
Graph showing the number of RIS2 schemes in various states of development

This doesn’t give a complete picture, though. To understand where we are with RIS2 we also need to consider the costs.

Counting the beans

RIS2 offered a much bigger spending commitment than its predecessor. £27.3bn was the total sum for National Highways to play with. A big slice was for operations, maintenance and renewals, but the Strategy promised nearly £14.2bn for “enhancements”, by which it meant the 57 projects listed above. An approximate budget was pencilled in for each of them that allowed all 57 to be paid for.

One of the problems RIS2 has hit is inflation. A rough estimate, based on construction price indices, would suggest that road projects worth £14.2bn in 2020 would cost £16.7bn today. Even if that’s inaccurate, inflation has undoubtedly pushed up the cost of every project.

National Highways haven't had to worry about that, though. In fact, if our analysis is even vaguely correct, they haven’t come close to spending the enormous budget they were promised.

A note on methodology

Our analysis, it's worth mentioning, is not a professional audit of the roads programme. We do not have access to those figures (or that level of accounting expertise). The aim is simply to get a sense of RIS2’s finances.

We have taken the actual or estimated contract cost of each project, where that has been published. Then, for schemes that only have a loose estimate or that are still listed as having a price range spanning hundreds of millions of pounds (the scrapped A358 Taunton-Southfields project, for example, had a very broad price tag of “£250-500m”), we have taken the median of the range as a rough estimate.

With these figures we have been able to calculate approximate totals for what has and hasn’t been spent. We do not claim that this is anything more than a finger in the air, but it’s interesting that the total value of all projects, according to this calculation, is about £16.9bn. That’s very close to the inflation-adjusted estimate above, which we reached by entirely different methods.

Complete or under construction (27 schemes)£4,767,200,000
Cancelled (16 schemes)£4,236,873,000
Yet to start or under review (13 schemes)£7,980,000,000
Total£16,984,073,000

The figures suggest that, of the original £14bn budget for new projects, less than £5bn has actually been spent on new projects. And it’s fairly clear that the 28 that have gone ahead tend to be the smaller ones - perhaps because they were quicker to plan and less controversial to approve.

Graph showing the cost of RIS2 schemes at each stage of development
Graph showing the cost of RIS2 schemes at each stage of development

We calculated the average cost of the 28 schemes that are either complete or under construction at £176m, while the average cost of the schemes that have been cancelled is over £300m. And the average cost of those under review - a group that includes big-ticket items like the Lower Thames Crossing (£4bn), A12 widening (£1.1bn) and A66 Trans-Pennine project (£1.3bn) - is almost £780m. 

The 28 schemes that have been delivered, in other words, are not the showstoppers; in fact, collectively, those 28 projects barely cost more than the Lower Thames Crossing, which is the single most expensive on the list.

So where are all the missing pounds? Does National Highways have £9bn of public money sitting in its current account or stuffed under a mattress somewhere?

Well, no.

The other costs

£9bn of the RIS2 “enhancements” budget might not have been spent on the 57 schemes it was intended for, but that doesn’t mean it is entirely unspent. There have been other things to spend money on.

One is that the list of “cancelled” schemes contains some projects that aren’t as cancelled as they first appear. Three of the Smart Motorway projects that were binned in the spring 2023 announcement - M3 J9-14 (£139m), M40/M42 Interchange (£312m) and M62 J20-25 (£337m) - were not completely cancelled.

Those three projects were so close to starting that it was too late to completely rip them up. Money had been allocated and contracts had been signed. And besides, Smart Motorway projects typically included all sorts of reconstruction and maintenance work to renew ageing infrastructure. Those jobs still needed doing.

As a result, all three effectively went ahead, bringing a multi-year programme of roadworks at substantial cost - but now as maintenance schemes, rebuilding carriageways and drainage and installing new concrete central reserve barriers.

The reduction in cost, if there was one, is not known, since National Highways did not publish their costs in the way they would for an upgrade project, but it seems likely that most of their projected cost would still have been paid to the contractors. In total that must account for at least £500m of spending - spending that, now, isn’t providing any new capacity.

We also have to account for additional work that was added to the programme. Unforeseen in 2020 was a slew of projects to retrofit new emergency lay-bys to existing Smart Motorways, a requirement of the Smart Motorway Stocktake that aimed to restore public confidence.

More emergency refuges like this are being built, in an add-on to the original RIS2 list. Click to enlarge
More emergency refuges like this are being built, in an add-on to the original RIS2 list. Click to enlarge

Going back to 15 lengths of busy motorway, installing traffic management for a full year and building new lay-bys, most of them in places where lay-bys were deemed uneconomical just a few years back, is not a cheap proposition. Those new lay-bys are costing, in total, £390m - between £2m and £3m each.

If we return to our estimate, this means that the total expenditure is probably nearer £5.5bn, but that still leaves more than £8bn of the “enhancements” budget seemingly unspent.

The missing billions

This is where we have to acknowledge that the concept of the Road Investment Strategy, the hypothecation of Vehicle Excise Duty, the fixed five-year budgets for National Highways and all the rest of it is, to a certain extent, smoke and mirrors.

Back in 2017, when it was all new, we wrote this.

“No Chancellor can now decide to save some money by suddenly withdrawing a funding commitment for the Little-Boggins-on-the-Wold Bypass. The system is designed to remove the on-again-off-again financial problems of old. Highways England can be sure that, until 2020, their funding stream will (in theory, at least) continue no matter which way the wind is blowing at 11 Downing Street.”

But that’s just not true. In July last year, the wind started blowing in a new direction and the Treasury started cancelling things. The Chancellor, Rachel Reeves, needed £320m to fix potholes, so she withdrew funding for the A27 Arundel Bypass, killing it dead. The Arundel Bypass was part of RIS2, it had progressed a significant way through the planning process, and its funding had supposedly been guaranteed since 2020. But none of those guarantees guaranteed anything. It was also the Chancellor who killed off the Stonehenge tunnel (clawing back £1.7bn) and six other projects.

Farewell, Stonehenge: a RIS2 scheme dropped by the Treasury to save money. Click to enlarge
Farewell, Stonehenge: a RIS2 scheme dropped by the Treasury to save money. Click to enlarge

It’s easy to imagine that the £27.3bn budget for RIS2 was handed to National Highways in 2020, perhaps on one of those giant cheques they give to lottery winners, so the money was in their account and ready to be spent over the following five years. But it was more like an IOU.

The Treasury promised to pay for all the things National Highways was asked to do over the RIS2 period. When each scheme was ready to go, NH would ask for the next bit of their pocket money, and as long as they were still within their £27.3bn limit, the Treasury would provide the cash.

Promises from the Treasury aren’t worth the detailed Civil Service reports they’re written in, though. The system of Road Investment Strategies gave the illusion that there was a smooth production line of road schemes, that the boom-and-bust cycle of construction was over, that uncertainty over funding was a thing of the past. But it was only an illusion. As soon as a Chancellor arrived who had other priorities, the truth became apparent: each scheme still needs the Treasury to say yes, and the Treasury doesn’t always say yes.

Indeed, it may be the case that the Treasury has been saying no for quite some time. When the now-famous £22bn funding “black hole” was first announced, the then-Transport Secretary Louise Haigh stated that £2.9bn of it was made up of “unfunded transport commitments” - transport spending, in other words, that may have been publicised, but for which the money wasn’t there.

Over the last few years one of the blockers to progress on RIS2 has been the length of time it has taken Transport Secretaries to approve projects that are, seemingly, ready to begin. Deadlines are extended again and again while the paperwork sits on the Minister’s desk. The reason may be that those projects are actually unfunded, or at least that there is more difficulty around National Highways’ supposed £27.3bn budget than anyone has yet made clear.

Where we go from here

So what have we learned, at the end of our amateur maths experiment? We think there are four useful insights here.

1. National Highways hasn't spent its budget

However you stack it up, £14bn was allocated for road projects between 2020 and 2025, and National Highways hasn’t even spent half that. Everyone talks about helping the economy, about growth, about development. One thing we have learned is that, regardless what new ideas might come around to make that happen, we’ve been really struggling to build the things we already chose with the money we apparently had.

Where RIS2 schemes have gone ahead, they’ve been smaller schemes with less impact. The big ticket items that would provide real economic effects, like the Lower Thames Crossing, are still in a holding pattern.

2. The budget isn’t ringfenced or protected

Much was made of the idea that VED was ringfenced and that RIS budgets were set in five year blocks. We’ve learned that both those things rely on Treasury goodwill. With the benefit of hindsight we can see that £27.3bn was not a guaranteed funding stream, it was more of an aspiration.

What’s more, the Treasury plainly doesn’t have the funds to cover everything the last Government committed to do, so National Highways’ enormous underspend is probably something of a relief; the money not spent on RIS2 has almost certainly been spent on plugging holes elsewhere. The very public cancellation of things like Arundel and Stonehenge since July is possibly just the first time that it’s been obvious to those of us outside Whitehall.

3. Building infrastructure is still too difficult

Even disregarding the financial situation, National Highways have found it impossible to deliver their shopping list of RIS2 projects. Most of the little ones have happened, but most of the big ones have been moving too slowly or have stalled altogether. That’s because big budgets alone don’t get infrastructure built. You also need to navigate the process of planning, consulting and approving them. But our planning system is not working.

The previous government recognised this, and introduced reforms. They created the National Planning Inspectorate, who manage the programme of Nationally Significant Infrastructure Projects and adjudicate on them, granting Development Consent Orders.

All of that replaced the old system of public inquiries that was often grindingly slow. But the new system still isn’t working as it should: multiple RIS2 projects have been delayed by years through repeated and sometimes vexatious legal challenges, against which there is seemingly no protection, while the requirements of the DCO process are so costly and onerous that £300m has already been spent on developing the Lower Thames Crossing without any guarantee it will ever be built.

Our system for planning infrastructure, in other words, is dysfunctional, and that has a cost - not just in delaying projects, which delays the economic benefits they bring; not just in pushing up their price tag as inflation takes its toll; but also in creating uncertainty, which has a cost all its own.

4. This system still deters investment

We often ask why infrastructure in the UK is so expensive. One major reason is uncertainty. To build a road (or any other big project) you need the right people with the right skills to build it, available in sufficient numbers at the right time; you need materials and a manufacturing base; you need tools and heavy plant and a thousand other things too.

If your business is in quarrying, or steel production, or building pre-tensioned concrete bridges, or earthworks, or anything else, you need a constant supply of work to keep your business alive. If the work is stop-start your costs will go up, and your fees will go up too. If there isn’t enough work for your highly skilled bridge engineers they will leave and go overseas, and if new projects come along a few years later you can only hire them back at inflated cost or train up new ones from scratch. Uncertainty costs money. Uncertainty pushes up the price of infrastructure.

The cycle of Road Periods was meant to stop that. A stable programme of works, with a dedicated income stream from ringfenced taxes, with budgets agreed in five year blocks. A production line. But it’s clear now that it doesn’t provide that certainty, or at least it doesn’t provide enough of it; that the whim of a Chancellor can still sweep it all away. The system still contains inbuilt uncertainty.

What happens next

The current government has pledged to reform the planning system again. They have yet to announce detailed plans, but something much bolder will be needed if we really are going to get things built.

This week the Chancellor announced some first steps: a third runway at Heathrow tops the list, but investment in airports nationwide is high on the list. Support for the Oxford-Cambridge rail project is there too. Elsewhere on the list is the Lower Thames Crossing, the most expensive project in RIS2 - not because it's going ahead yet, but because the Government are now "looking for private finance" in order to build it.

Private finance used to mean a PFI deal, a term that is now widely discredited. Presumably they are looking for something like PFI that isn't PFI. But one conclusion can clearly be drawn from this news: the £4bn or more required to build it, which had been built into the RIS2 budget, which had apparently been agreed and available since 2020, doesn't exist. The Treasury can't or won't fund it. If the money was ever there at all, it has now been spent on other things.

However the planning system changes, and whatever changes are made to the roads programme in the spring, let's hope the next round of reforms get it right, because unfulfilled promises abound as we enter the final months of RIS2.

Comments

Gavin 30 January 2025

Another good article. Let's face it. We never know if anything is going to get built in this country until it is actually built! I think we all knew that ring fencing road tax money specifically for road improvements was always a myth. I ring fence a portion of my salary to my "rich one day" fund, but it ain't working. Lets hope this plan to kick start economic growth means some real investment in road schemes

freebrickproductions 30 January 2025

In #4, you mention how bridge-building firms need a steady stream of projects to retain their highly-trained engineers. I also know that it seems there are a number of older bridges there that are reaching the end of their service lives in desperate need of replacement, which no doubt would constitute smaller, and hopefully cheaper, projects that would allow for a steady stream of them without breaking the bank. I get that replacement/maintenance projects aren't exactly a big, flashy thing that politicians can have a photo-op in front of holding a giant pair of scissors, but you'd still think that a process like this would've budgeted for those.

Tony Frost 31 January 2025

It seems that the Lower Thames Crossing got the financial go-ahead in the last few days; it was a scheme that I really thought wouldn’t happen.

The M2 J5 scheme was completed and open to traffic by the end of 2024 which just tidying and snagging works to be done. I remember that it was also a scheme that teetered on the edge of being cancelled several times.

This slightly exposes the fact that this post has been in the works since November and has been through many updates as the situation on the ground keeps changing! Thanks Tony. 

Toby 31 January 2025

Do you think the A12 widening will go ahead? I'm local to the area and this has been about 30 years in the making!

We should find out in the spring, but I think it hangs in the balance right now - there’s a big focus of infrastructure spending, but not so much on roads, and that’s a very expensive project. It may get approved but right now I wouldn’t bet anything on it that I wasn’t willing to lose.

Patrickov 8 February 2025

As a complete outsider (in a sense that I am a foreigner and only visited the area once) my take on the Stonehenge Tunnel is that, if they don't bother to build it (which I understand is too sensitive of a scheme to go through anyways), at least make the alternatives better. To be precise, Labour is supposed to be a public transport fan (as this is a public service fitting their ideology more than roads), therefore I expect them to improve the rail links in the same direction. Leave the road to those who really need it.

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