Transport Insights

Ministers have announced £7.3bn capital funding for local highway maintenance in England between 2026-27 and 2029-30, keeping the £500m annual “uplift” , now badged as “incentive funding”, with councils required to jump through as yet undefined hoops to get three quarters of the extra cash.

As I reported, the Budget deliberately held back details of this cash to allow a new announcement, stating at the time only that there would be “over £2 billion” in 2029-30.

The cash will gradually ramp up, from £1,617m next year to £2,134m with the largest increase around a quarter of a billion pounds coming in the final year.

The Department for Transport (DfT) said that “as the case in 2025 to 2026, a portion of this funding will be designated as incentive funding”. This ranges from £525m next year to £540m.

This funding will be subject to local highway authorities demonstrating that they comply with best practice in highways maintenance, for example, by spending all the Department for Transport’s capital grant on highways maintenance and adopting more preventative maintenance.

The DfT said that at least 25% of the extra cash will be dependent on local highway authorities publishing transparency reports. Rather confusingly, it said all incentive funding will be withheld if reports are not published. 

The DfT said that in 2026-27, (a further) 50% of the incentive funding will be subject to local highways authorities’ performance.

Of course they don’t know how it will work yet:

Further details on the performance-based measure will be confirmed in due course.

Chancellor Rachel Reeves again misquoted the Labour manifesto commitment to fix a million extra potholes each year of the Parliament. She said:

We promised to fix an extra million potholes a year by the end of this Parliament – we’re doing exactly that.

She also repeated the claim that the funding of more than £2bn in the final year is double what the Tories were due to spend said:

We are doubling the funding promised by the previous government, making sure well maintained roads keep businesses moving, communities connected and growth reaching every part of the country.

In fact no figure was ever published for this Parliament, even under the widely-ridiculed Network North plan.