Transparency data

Lower Thames Crossing (LTC) accounting officer assessment summary (February 2026)

Updated 26 February 2026

Background

This assessment has been completed following a re-baseline of costs and a decision on the preferred funding model for the Lower Thames Crossing project taken as part of the Autumn Budget in November 2025. This accounting officer assessment (AOA) has been produced by DfT in conjunction with National Highways. 

Overview

The Lower Thames Crossing (LTC) is a new river crossing within the Thames Estuary and is a Nationally Significant Infrastructure Project (NSIP).

It is intended to relieve congestion at the Dartford Crossing, enhance resilience across the strategic road network, and support long‑term economic growth by:

• strengthening connectivity across the UK and to major ports

• improving resilience and reliability for both car and freight users

Regularity

The project is affordable on the basis of the regulated asset base (RAB) model, with government funding committed until 2028/29. To meet the strategic objective that the costs of constructing the LTC are primarily met by users and limiting the requirement for taxpayers to fund the project, the government will look to the private sector to take on responsibility for constructing and operating the LTC. This also includes reimbursing the taxpayer for some of the costs incurred ahead of the transaction.

Analysis has concluded that the transaction is expected to be off the government’s balance sheet based on the proposed structure and interpretation of the relevant guidance. There is significant uncertainty around this judgement at this stage.

Following further market consultation to build confidence on the intended risk transfer to investors, the Office for National Statistics will be approached to provide greater confidence on statistical treatment. If the transaction were to come on balance sheet, this would necessitate a review of the public funding required to complete the scheme.

Legislation will be required to implement the RAB model, including regulatory licensing and charging powers. Legislative authority for the current spend on enabling works is provided by existing legislation. Development consent was granted in March 2025 providing legal power for construction.

Propriety

LTC falls under the department’s definition of a Tier 1 project and therefore adheres to control and governance arrangements within NH, DfT and HMT levels. Final approval of each stage of the business case is made by DfT and HMT ministers.

The decision that the LTC will be taken forward on the basis of the RAB model was approved by the Investment, Portfolio and Delivery Committee (IPDC) within DfT. This approval was given subject to confirmation by DfT ministers. The decision was subject to a HMT Treasury Approval Process panel, which met ahead of decisions by the DfT Secretary of State and Chancellor of the Exchequer on the funding structure for the LTC.

The governance structure for the LTC has been developed to enable successful delivery of the LTC as a privately funded project.

Value for money (VfM)

The LTC project has a strong underlying strategic case. As well as the connectivity and congestion relieving benefits delivered by the new crossing, which leads to major economic benefits, this is also based around the escalating need for maintenance of the Dartford Crossing. The Dartford Crossing is already operating significantly over capacity and suffers from poor reliability.

The value for money assessment has considered 3 options:

1) full public funding for the project

2) a hybrid option, which involves government funding for the tunnel and private sector finance being used for the roads under a Design Build Finance Operate and Maintain (DBFOM) contract

3) the RAB model

Considering the BCR, under all 3 funding options the scheme benefits are expected to exceed costs, with all 3 options within the low value for money category. The hybrid option offers the lowest value for money of the 3 options. The relative VfM of the RAB and full public funding options is marginal. The greater the user charges in the RAB model compared to the public funding option, the more the public funding option will offer better value for money.

The VfM analysis will continue to develop as detail on policy assumptions evolves, alongside any updates to our appraisal approach. For example, the department has published its intention to adopt new, higher values of time for freight movements.

The RAB model is the only current option that is judged to sufficiently meet the government’s strategic objective that the costs of constructing the LTC are primarily met by users, recovered through a user charge, and limiting the requirement for taxpayers to fund the project.

Feasibility

The assessment of different funding models concluded that the project could be viably delivered under either the full public funding or the RAB model. Main works contracts have been procured and are suitable for limited restructure to make them suitable for the new funding structure and work is underway to create a separate delivery vehicle that will become the RAB company.

There are still risks to delivery of the RAB model, including market appetite from investors, the balance sheet position, the need for new primary legislation, risks on the delivery schedule and required user charge levels. All of these will be further examined ahead of future business case stages, but there is sufficient confidence in them to take the RAB model forward at this stage as the preferred option.

Conclusion

The decision to (a) commit further public funding to the LTC project and (b) take forward the RAB model as the government’s preferred financing model for the project, is consistent with the requirements of Managing public money for the reasons set out above.

The project has a strong strategic case and clearly supports the government’s Plan for change. Moving forward with the RAB funding model in particular supports the government’s strategic objectives that the costs of constructing LTC are primarily met by users, limiting the requirement for taxpayers to fund the project, and therefore not displacing funds from elsewhere.

As with any major project, there are significant risks to be managed in order to realise the project’s benefits. We will continue to work with NISTA and apply lessons from the James Stewart review of High Speed 2 to help minimise those risks. Further work will be completed in the next stages of the programme up to FBC at which point the accounting officer assessment will be refreshed.

Jo Shanmugalingam

February 2026
Permanent Secretary – Department for Transport

Nick Harris

February 2026
Chief Executive - National Highways