The UK’s major roads could be taken over by private firms under plans to boost infrastructure spending being set out by David Cameron. The Prime Minister has ordered Whitehall experts to investigate a radical shake-up of ownership and funding to encourage investors to back desperately-needed upgrades to the ageing network. One model would involve an independent regulator overseeing the use of road tax, in what officials said was a bid to emulate the “great success” of water industry privatisation. But one leading motoring organisation condemned the shake-up which it said appeared to be a first step to national road pricing despite government assurances tolls would not be levied on existing roads.
Appealing for radical solutions to ease the burden on the cash-strapped state ahead of this week’s Budget, the Prime Minister will say the taxpayer cannot afford the required improvements.
“We need to look urgently at the options for getting large-scale private investment into the national roads network – from sovereign wealth funds, pension funds, and other investors,” he will tell an industry audience. That’s why I have asked the Department for Transport and the Treasury to carry out a feasibility study of new ownership and financing models for the national roads system and to report progress to me in the autumn.”
Gridlock on the roads is holding back economic recovery , he will say, pointing to work already in progress to ease congestion by using the hard shoulder of motorways as an extra lane and turning A-roads into dual carriageways.
“But how do we do more, when, frankly, there isn’t enough money? Road tolling is one option – but we are only considering this for new, not existing, capacity. We now need to be more ambitious. Why is it that other infrastructure – for example water – is funded by private sector capital through privately owned, independently regulated, utilities but roads in Britain call on the public finances for funding?”
His message drew swift criticism from the AA however, which said drivers would see such a change as “the thin end of the wedge” that would end with national road charging and further burdens on motorists. AA president Edmund King said it was in favour of reform of the the Highways Agency, the body which at present looks after the motorways and major A-roads that make up 3% of roads, to allow it to make longer-term plans.
“However there is a big leap between reform of the Highways Agency and new ownership and financing models. The privatisation of the railway network has hardly been a spectacular success and millions of drivers will be concerned if one of our most important and used national assets, the strategic road network, is sold off. The Government has indicated that tolls would only apply on new capacity but many drivers would suspect new ownership is the thin end of the wedge leading to national road pricing. Many drivers can’t afford current fuel prices, so new charges would be a toll too far.”
Labour also cast doubt on assurances about future tolls and drew comparisons with the ill-fated British Rail sell-off. Shadow transport secretary Maria Eagle said:
“Motorists now seem set to be in the firing line for the next phase of the Tories’ ideologically driven rip off culture. This Budget is increasingly looking like a series of desperate acts to divert attention from the Government’s failure to set out a coherent plan for jobs and growth.”
Mr Cameron’s initiative was applauded however by the British Chambers of Commerce, which has called for efforts to secure the input of major investors such as pension funds into road and other projects.
Director of policy Adam Marshall said:
“Business is clear that we must find innovative ways to get private sector capital into our road system, or we will lose some of our competitive edge in the years ahead. Come the autumn, business people up and down the country will want to see a clear action plan that unlocks investment in the road network for the next decade and beyond.”
Mr Cameron’s speech comes as he and Chancellor George Osborne meet Deputy Prime Minister Nick Clegg and Treasury Chief Secretary Danny Alexander to thrash out the final details of Wednesday’s set-piece economic statement in the Commons. Mr Osborne insisted yesterday that all the policy details had been in place for a week and the gathering of the “Quad” bringing together the two sides of the coalition was solely to discuss “presentation”.
Some Liberal Democrats expressed serious concern yesterday that Mr Clegg may not have secured sufficient extra help for the least well off in return for abandoning opposition to the removal or lowering of the 50p top rate of income tax. The Chancellor insisted the package was “a budget for workers” that targeted benefits at low and middle earners.