Business wants tolls to improve roads

The CBI has called for a ‘gearchange in the investment, performance and efficiency’ of UK roads that could lead to private operators controlling roads and charging people tolls to use them.

In the new report, the CBI says that business is losing £8bn a year from road congestion and this may rise to £22bn by 2025. Improvements in roads are badly needed.

Road tolls plan draws criticism from industry

Manchester us UK congestion capital

However, it says, “with public finances constrained, the government must show bold thinking in how to secure new sources of funding to help support economic growth in the long-term.”

The CBI says the government should switch to a new funding structure for roads, similar to that used in the water industry and other utilities. This would see the road network taken out of the government’s budget and a percentage of motoring taxes converted into a user charge.

Longer term, even this may not be enough to secure sufficient returns for private operators funding new roads. This is where the CBI suggests road tolling should be used. This would encourage private firms to raise cash from long-term borrowing, safe in the knowledge they’d make a return.

The proposals have been outlined in a new CBI report called ‘Bold Thinking: A model to fund our future roads’. John Cridland, CBI Director-General, explained:

“Every day, people up and down the UK lose time and money because of our clogged-up roads.

“With public spending checked, the case for new funding solutions is even more compelling, and the Government recognises this.

“It’s clear we need a gear change in how we manage and pay for our road network in the 21st century. A lack of investment means we are really struggling to increase road capacity, let alone adequately maintain what we already have.”

The CBI says the case for a new road funding model is even more important given expected falling road tax revenues as a result of greener cars. Fuel duty currently contributes 1.4% of GDP: by 2030, this will have fallen to 1%.

Road tax makes up 0.4% of GDP today: in 2030, this will have fallen to just 0.1%.

A £10bn shortfall for Highways Agency projects also means the current model is “unsustainable” said the CBI: despite motorists paying £35bn in road taxes in 2009-10, expenditure on the road network was £9.4bn.

To ensure fairness in road charges and expenditure in any future new road funding model, the CBI has also called for an independent ‘roads regulator’ to be commissioned.

#socialvoices: Big Brother is watching the motorist – and it’s only getting worse