Skip to main content

CBI calls for new approach to road funding

The Confederation of British Industry (CBI) calls for road charging should be introduced on the strategic road network in England. Proposals in the report, Bold Thinking: A model to fund our future roads also suggest that responsibility for the network’s budget should be taken away from the Department for Transport (DfT) and given to an independent regulator. Launching the report, CBI director-general John Cridland said a regulatory asset base (RAB) model was required to address the problem of long-term fu
October 11, 2012 Read time: 3 mins
The 6694 Confederation of British Industry (CBI) calls for road charging should be introduced on the strategic road network in England.  Proposals in the report, Bold Thinking: A model to fund our future roads also suggest that responsibility for the network’s budget should be taken away from the 1837 Department for Transport (DfT) and given to an independent regulator.

Launching the report, CBI director-general John Cridland said a regulatory asset base (RAB) model was required to address the problem of long-term funding.  

According to the report, UK economy is already losing up to £8 billion each year from congestion on the roads, which could potentially rise to £22 billion by 2025. The CBI’s recent infrastructure survey also showed that three in four businesses were not confident that transport networks will improve in the next five years.

The CBI is calling for the introduction of a Regulatory Asset Base (RAB) model to secure the private investment necessary to overcome the current funding gaps in the UK’s road network. A £10bn shortfall in funding for 503 Highways Agency projects and the prospect of declining motoring tax revenue due to ever-increasing efficiencies in new vehicles makes the current model unsustainable.

A regulated model for the road network would address the problem of long-term funding and one year cycles by taking the road network out of the Government’s budget.  Users would have a proportion of their motoring taxes converted to a user charge – controlled by the regulator – to access the strategic road network.  This charge would provide a funding stream for private operators – licensed by the regulator – who would operate regional sections of the network.

In the long term, the CBI says, private road operators would have to finance larger projects through long-term borrowing, which could require additional revenue streams, such as tolling, above a standard charge.  The regulator would continue to cap charges and manage the overall cost burden on drivers.

Mr Cridland said: “Every day, people up and down the UK lose time and money because of our clogged-up roads – whether you’re a business waiting for an urgent delivery, or a commuter stuck in the morning rush-hour. Gridlock is an all too familiar tale of life in the UK, and one that is already costing us £8 billion a year.

“With public spending checked, the case for new funding solutions is even more compelling, and the government recognises this. Infrastructure matters to business, and delivering upgrades to our networks is one of the highest priorities for the CBI to get the economy moving again.

“It’s clear we need a gear change in how we manage and pay for our road network in the 21st century. A lack of investment means we are really struggling to increase road capacity, let alone adequately maintain what we already have.”

The CBI’s call was backed by Alain Bourguignon, CEO of Aggregate Industries, who said: “We understand that government tries to make the most of its limited cash – but unfortunately the most cost-effective course of action is rarely followed. A ‘best value’ approach is not always taken in repair and maintenance programmes.  By transferring the management and maintenance of the road infrastructure to long term investment vehicles, we will see better planning, procurement and design of the assets, leading to better results for all.”

Related Content

  • UK considers road user charging
    November 17, 2020
    Expansion of EVs expected to create £40bn gap in fuel duty revenue which needs plugging
  • Tolling faces up to unprecedented challenge
    October 9, 2020
    The next five years are likely to see a number of changes – but the tolling industry will be equal to them, thinks the IBTTA’s Bill Cramer. The best minds in the business are on the case…
  • UK needs new freight strategy says report
    June 22, 2016
    The Institution of Mechanical Engineers is calling for the UK Government to urgently introduce a national multi-modal freight strategy in a move to ease traffic congestion, improve air quality and boost the economy. According to its report ‘UK freight: in for the long haul’ up to 30 per cent of all haulage vehicles on UK roads are empty and about 150 million miles are driven unnecessarily by lorry drivers. It claims a national strategy could outline plans to make better use of urban consolidation centres
  • Changing roles in data collection for traffic management
    January 23, 2012
    Transport for Greater Manchester's David Hytch discusses the evolving roles of the public and private sector in managing and disseminating data. Data services for traffic management were once the sole preserve of public sector organisations, they being uniquely placed and equipped for the work involved. Now, though, this is changing. There is even a presumption in some countries that the private sector will take a greater, if not actually a lead, role in the provision of information for transport management