Thursday, January 25, 2018

Infrastructure Report Says Look Beyond HGV Levy and Fuel and Excise Duty for Investment

Councils Falling Behind on Road and Bridge Repairs According to RAC
Shipping News Feature
UK – According to a report published by the RAC Foundation, almost 3,500 council-maintained road bridges in Great Britain are substandard, but with restrictions on budgets, only a relative few will have the necessary maintenance work carried out on them within the next five years. A separate report looked into the council budget shortfalls when it comes to the UK's road network, suggesting that the government should introduce a more dynamic road user pricing system that takes into account a driver's circumstances instead of relying on the existing model, which is based on raising funds through fuel duty, vehicle excise duty, and the HGV levy, to raise much needed funding in order to maintain the UK's road infrastructure.

Analysis of data for the 2016-17 financial year – received from an impressive 204 of the 207 local highway authorities in England, Scotland and Wales – found that 3,441 bridge structures, from a mere 1.5m in span upward, are not fit to carry the heaviest vehicles now seen on UK roads, including lorries of up to 44 tonnes. Many of these bridges have weight restrictions. Others will be under programmes of increased monitoring or even managed decline.

The 3,441 bridges represent 4.6% (about 1 in 22) of the roughly 74,000 bridges to be found on the local road network. The number of substandard bridges is slightly higher than the 3,203 identified a year previously. Budget restrictions mean councils only anticipate 370 of these will have the necessary work carried out on them within the next five years.

According to the report, the one-off cost of bringing all the substandard bridges back up to perfect condition would be around £934 million – equivalent to £271,000 per structure. The total cost of clearing the backlog of work on all bridges – including those that are substandard – is estimated at £5 billion, up sharply (28%) on the estimate of £3.9 billion a year earlier. At the same time, the estimated amount of money councils are spending annually on maintaining their entire bridge stock is £367 million, just a fourteenth of the backlog total and well down on the £447 million spent in the previous year. Steve Gooding, Director of the RAC Foundation, said:

“It is unwelcome, if unsurprising, news that the number of substandard local authority bridges appears to have risen slightly. The road maintenance crisis faced by financially-beleaguered councils is often reported in terms of potholes to be filled but this research hints at the wide spectrum of things needing attention, including blocked gulleys, overgrown verges and, of course, fragile bridges.

“The really worrying thing about this data is that the costs and affordability of fixing the problems are moving in opposite directions – while the estimated cost of clearing the bridge maintenance backlog has risen by 30%, an increase of a billion pounds, the amount councils are spending to maintain the total bridge stock has fallen by 18% year-on-year, from £447 million to £367 million.

“As council budgets continue to be squeezed by the growing pressure of social care these numbers are a stark illustration of the gloomy consequences for the quality and integrity of our local networks.”

Looking at the wider issue of Funding Roads for the Future, the Association for Consultancy and Engineering (ACE) released a report recommending that the Government introduce dynamic road user pricing which takes into account a driver’s journey, the time of day, congestion on the network, and even their financial situation. The report suggests that the existing model based on raising funds through fuel duty, vehicle excise duty, and the HGV levy, is failing in the face of new technology and changing social trends, such as zero-emission vehicles, ride sharing, and increased urbanisation.

Briefly it urges short term reforms to the existing road taxation system, pushing it towards the longer-term aim of dynamic road user pricing. Commenting on the report, Dr. Nelson Ogunshakin OBE Chief Executive of ACE, says:

“Our report argues that in the years ahead only a reformed funding regime based on dynamic road user pricing will manage traffic flows and deliver the significant investment needed to keep the country moving.

“It’s vital that the Government starts these conversations with the public now, as to date there have been suspicions of road user pricing and fears that people will be priced off the road. This doesn’t have to be the case and there is a great opportunity to develop a fairer-for-all road funding system which delivers the first-class road network that this country needs long into the future.”

Following the end of the motorway building programme in the mid-1970s, the UK government’s investment in England’s national road network fell sharply in real terms over the following four decades. By 2000, investment in national roads dropped to as low as 50% of 1975 levels, increasing to 75% of 1975 levels in 2011. This is despite England’s population growing by close to seven million people and the wider UK economy growing by 225% over the same period.

The government’s efforts to improve England’s road network over the past few years have been positive, with the establishment of a ‘National Road Fund’ and the first Road Investment Strategy (RIS1), providing improved certainty, particularly after the years of under-investment. However, revenue from taxes related to roads is drying up with the growing uptake of zero emission vehicles meaning revenue from Vehicle Excise Duty and Fuel Duty will continue to decline as a percentage of the UK’s GDP in the future. Whilst good for the environment, the report states that this creates problems for the funding of roads, particularly with commitments to ring-fence revenue raised from Vehicle Excise Duty in England to the national road network.

In the UK, road taxation is currently made up of three key elements: Vehicle Excise Duty, Fuel Duty and Heavy Goods Vehicle Road User Duty. These taxes are not currently ring-fenced for investments in the road network and are also spent on other services, however the Government has made a commitment to invest all revenue raised from Vehicle Excise Duty in England into the National Roads Fund from 2020-21.

Some of the other recommendations of the report are to:

  • Develop a new overall National Roads Strategy outlining a co-ordinated approach beyond the national network, including introducing a Local Roads Fund to amalgamate and ring-fence funding for local roads;
  • Look at short-term reforms to widen the scope of Vehicle Excise Duty to include zero-emission vehicles, therefore securing revenue for the National Roads Fund;
  • Reform the existing HGV road user levy, using it as a pilot for the broader introduction of dynamic road user-charging across the network;
  • Establish a Local Infrastructure Tariff allowing councils to develop a sustainable revenue stream for local road infrastructure investment;
  • Increase private investment in England’s road network.

Whilst in these pages we have looked previously at the lamentable state of roads and bridges in the US, and frequently the lack of political will to do anything about it, it seems things are little better in modern Britain. As so often the case it may take a tragedy to awaken those responsible for the maintenance of UK infrastructure, as with the recent tragic case of Grenfell Tower.

Photo: The rusting, century old A35 Holmsley road bridge in Hampshire, for which repair estimates ranged up to £4 million last year, just five years after the local council took over responsibility for it from Network Rail.