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Budget 2018: Roads sector welcomes a surge in investment

Budget 2018: Roads sector welcomes investment surge

Ed Thomas, UK head of transport, said:

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Ed Thomas

Partner, UK Head of Transport

KPMG in the UK

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Also on home.kpmg

“The most eye-catching transport announcement in Philip Hammond’s budget is clearly the increase in road investment. Road Investment Strategy 2 (RIS 2) will see £28.8bn invested from 2021 to 2025, which is a step change from the £15.2bn RIS1 programme announced in 2015. 

“RIS2 will support business productivity and competitiveness by providing a safer and more resilient roads network. With trade high on the agenda, it is anticipated that a number of the RIS2 schemes will improve access to airports and the ports, providing improved international gateways. The proposed Oxford-Cambridge expressway can also support new large-scale housing development in this strategic corridor, which is another of the Government’s infrastructure priorities.

“The roads lobby has long envied the relatively generous funding settlements provided by the rail sector’s system of regulation. The five-yearly RIS process and the hypothecating of VED for investment goes some way to providing greater certainty to the contractors and wider supply chain involved the sector.

 “There still remains questions over roads funding in the long term. Fuel duties are anticipated to decline as the uptake of hybrid and electric vehicles increases. In its recent National Needs Assessment, the National Infrastructure Commission has also recommended a shift in transport funding from strategic road and rail infrastructure towards cities and major urban transport projects.

“In rail, additional money was announced for the development of the East-West and Northern Powerhouse schemes, both of which have improvements in regional connectivity and productivity at their heart. However, there is major uncertainty over how these schemes will ultimately be funded with Government having committed significant funds both to Network Rail’s CP6 programme and the first phase of HS2 over the coming years. This uncertainty remains after today’s budget.”

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