The financial impact of the COVID-19 pandemic could see councils across England making budget cuts of up to 20 percent. With road maintenance budgets in the firing line the Road Surface Treatments Association (RSTA) is calling for a new approach for the funding and governance of local road networks.
According to the Local Government Association, councils will face additional costs of up to £13 billion this year due to measures required in tackling the pandemic. These additional costs come on top of over a decade in which local authority budgets have been slashed. Between 2015/16 and 2017/18, councils lost 77 percent of their funding from central government used to provide essential services.
The impact of the pandemic has led to many sources of revenue, i.e. the collection of parking fees, drying up. It is estimated that councils could lose up to £1.4 billion from these funding streams, leading to many councils potentially facing a financial black hole. Other losses include £400 million in business rates, fees and charges of £341 million and council tax revenue of £288 million as many people have lost their jobs and others are utilising payment holidays.
To counteract this, the government has allocated a further £3.8 billion to councils in the last two months. But this falls far short of what is required, with many local authorities still reeling from year-on-year cuts to budgets. According to the Local Government Association councils will need up to four times the funding they have been allocated by government so far.
The financial crisis affecting councils post-pandemic could have a significant detrimental impact on highway budgets as councils are forced to use them to pay for social care. The government has announced an additional £2.5 billion highway maintenance funding over the next five years; however, it could cost more than £11 billion to address the current roads repair backlog.
“The additional £500 million a year, although welcomed, is not enough and was allocated pre-Covid. Although following the Transport Select Committee report into local highways funding that was accepted by DfT is envisaged to lead to an announcement of longer term capital funding in the autumn, decades of under investment in the local road network has left a legacy of potholes that needs a new approach if it is to be properly addressed,” said Paul Boss, RSTA Chief Executive.
Boss believes this new approach should be based primarily on prevention rather than cure. He added: “Fixing potholes is just playing catch-up. What is needed is providing councils with a range of simplified governing and funding mechanisms that can enable the development and implementation of planned programmes of maintenance that prevent the deterioration of roads from happening in the first place.”
As part of this new approach the RSTA is calling for the local road network to be treated on parity with the strategic road network which, unlike local roads, has a greater certainty of funding with a 15 year road investment strategy. This contrasts sharply with the annual, often ad hoc, funding for local roads. Funding for local roads should be simplified. Councils have to access a myriad of funding pots which have different legal frameworks, different assessment criteria, business case requirements and timescales. This leads to a lack of effective planning, duplication and waste. Addressing these issues would improve outcomes and value for money. Furthermore, the Government should consider the injection of an additional £1 billion a year into a much-needed programme to address the pothole backlog by investing 2 pence per litre from the existing fuel duty to fix local roads.
Boss concluded: “During the pandemic the Government recognised the essential role that the local road network has in keeping Britain moving. It is time for a new approach that enables councils to ensure that this role is properly realised.”
