National Highways projects costing billions more than planned

The National Audit Office said delays and inflation mean National Highways will not be able to deliver dozens of projects within budget.

Traffic passes Stonehenge
Traffic passes Stonehenge

Enhancements to England’s motorways and major A roads will cost billions of pounds more than planned, a report has found.

Public spending watchdog the National Audit Office (NAO) said delays and inflation mean Government-owned company National Highways will not be able to deliver dozens of projects within budget.

The report warned it will cost an estimated £3.3 billion more than planned to complete projects due to take place in the second road investment strategy (RIS2) between April 2020 and March 2025.

It also stated that projects due to be in construction during the subsequent five years are likely to cost £6 billion above previous expectations, although that includes some of the schemes included in the £3.3 billion figure.

Some 33 schemes are behind schedule by between one month and more than three years, with an average delay of 12 months.

“This will leave road users with an underperforming road network for longer,” the report warned.

Delays have been caused by factors such as the coronavirus pandemic and difficulties obtaining planning permission.

National Highways was given a total of £14.1 billion by the Department for Transport (DfT) for 69 enhancement schemes in RIS2.

It has completed less work and at a higher cost than anticipated, the NAO said.

Projects in RIS2 include building a dual carriage and tunnel near Stonehenge, Wiltshire and the Lower Thames Crossing between Kent and Essex.

Neither have received development consent.

Last year, the budget for enhancements was cut by £3.4 billion and the number of projects were reduced to 58 when it became clear National Highways could not implement the delivery plan as intended.

The NAO also found that National Highways has already allocated all of its £1.16 billion RIS2 contingency budget.

Gareth Davies, head of the NAO, said it was “unfortunate” that the road investment plan developed by the DfT and National Highways coincided with the coronavirus pandemic and rising inflation, but “more could have been done to manage risks”.

He went on: “Delays to projects have meant that less work has been delivered than planned and at a higher cost.

“DfT and National Highways must now fully address the rising cost of its revised portfolio of projects, undertaking a review of all road plans that it plans to move into the time period of its third road strategy (2025-2030).

“This review must consider if these projects remain feasible and provide optimal value for money.”

National Highways chief executive Nick Harris said, “external factors” have had a “significant impact on our ability to deliver this complex programme”.

He continued: “Despite these challenges, we have successfully received consent to deliver several major infrastructure developments.

“We’re confident that we manage portfolio and project risks well, while recognising that there is always room for improvement as we mature our processes ready for RIS3.”

A DfT spokesman said RIS2 is “transforming our road network” and a “minority of projects” are being delivered later than originally proposed.

He added: “We have allocated £24 billion to ensure we have a road network that is safe, reliable, environmentally conscious and good value for the taxpayer.”

RAC head of roads policy Nicholas Lyes said drivers will be “very frustrated if vital improvement works are put on hold”.

He went on: “Any attempts to take an axe to the roads budget is short-sighted because slow-moving traffic and delays do nothing to help the economy grow.”

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