Transport Insights

Transport Action Network (TAN) has posted another of its National Highways Watch pieces, with significant input from me, and it has been almost simultaneously vindicated by comments in the draft Third Road Investment Strategy (RIS 3).

The piece Highway robbery – abusing Designated Funds compares National Highways’ use of designated funds, pictorially at least, to putting lipstick on a pig – i.e. prettifying large and potentially environmentally destructive road building schemes with greenwashing.

TAN has discovered that National Highways is syphoning off money from a dedicated fund for environmental and safety improvements (called ‘Designated Funds’¹) to use it as sweeteners or greenwashing for new roadbuilding schemes. National Highways is also raiding the “ringfenced” funding to pay for mitigation that should come out of the scheme budgets.

The piece highlights a number of alleged misuses of designated funds, including “sweetening the Lower Thames Crossing”:

A document on “Benefits and Outcomes” submitted as part of the scheme’s planning application mentions “Designated Funds” 25 times, and claims that “Over £30 million of designated funds have been allocated to Lower Thames Crossing”, despite having to make clear that these benefits technically “fall outside of the remit of the DCO [planning application]”.

Another interesting twist, comes on National Highways’ £340m M60 Junction 18 Simister Island Interchange project, which currently has funding pledged by the government but is awaiting a decision on its DCO.

There is a dispute over work to the Haweswater underpass under the M60, which National Highways claims is not part of the project, while TAN points out that the underpass will have to be lengthened because the motorway will be lengthened.

During the DCO hearings National Highways said it was exploring using designated funds to support “some” improvements to the underpass but in July 2025 it confirmed it hadn’t yet done so and that it would make a “bid” to itself for cash in the financial year 2026-27, reiterating “that there is no guarantee that funding will be made available, and the improvements are outside the scope of the Scheme”.

Not only is there no guarantee of funding; there is no designated funding for 2026-27, as it will be in RIS 3, which has not yet been set. The draft RIS 3 published this week suggested that designated funds are likely to continue but there are as yet not even any themes for what the money will be spent on, let alone allocated funds.

The draft RIS says that the government is “re-examining the purpose and role of the Designated Funds” on the basis that many of the things which have historically been delivered through the funds, such as biodiversity net gain, have become legal commitments or otherwise ‘Business as Usual’.

It continues:

We expect these requirements to be funded by the scheme or another relevant funding line. We also want to ensure that funds remain focused on their core purpose: improving the experience for all users of the SRN, supporting innovation, and addressing the impacts of the SRN on neighbouring communities and the local, natural and historic environments, including dealing with legacy network issues. Investments must also demonstrate value for money for the taxpayer.

These comments reflect comments quoted in the TAN piece from regulator the Office of Rail and Road that the company should specify the key outputs from activities funded during the year, which it said was needed to “ensure that these funds are not diverted to cover overspend in other areas without appropriate transparency and reasoning”.