Guidance

Roads funding information pack

Updated 3 June 2020

Introduction

The repair of potholes and preventing them from forming is only one element to improve the condition for all road users. Well maintained highways not only improve local productivity but also the environment by reducing delays, and also makes cycling, horse riding and walking more attractive. The government is providing guidance and funding to highway authorities to ensure that our local roads and other highway assets are fit for the future.

The funding allocated to each local highway authority in England in 2020/21 is based on a formula using 2019 road length data provided by each local authority, and also takes into account the number of highways assets such as bridges and lighting columns for which they are each responsible for.

Existing and previous funding

Local highways maintenance – needs element funding – equivalent to £725 million in 2020/21

This existing needs based formula totals £4.7 billion over the 6-year funding period between 2015/16 and 2020/21. In 2020/21, the £725 million has been reduced to £674 million, as the needs element funding is not applicable to local authorities who have opted to receive their retained business rates instead.

It is important to note that authorities not retaining business rates have not been affected by this change.

Local highways maintenance – incentive/efficiency element funding – equivalent to £151 million in 2020/21

The incentive element funding totals £578 million between 2016/17 and 2020/21, however for 2020/21 the amount available to local highways authorities has been reduced to £139.74 million as some local authorities receive their retained business rates instead of the incentive element. It is important to note that authorities not retaining business rates have not been affected by this change.

This funding is for local authorities to ensure they are following an effective asset management approach and adopting efficiency and best practice principles for local highway maintenance. The funding is a mechanism for highway authorities to receive additional funding over and above the Needs based formula.

Two authorities are in band 2 of the incentive element scoring criteria, so were only eligible to receive 30% of their total potential allocation.

Pothole Action Fund – £50 million in 2020/21

The Pothole Action Fund was announced in Budget 2015 and, with subsequent funding, totals £296 million, enough to repair on average over 5 million potholes or to stop them forming in the first place. This funding is allocated by formula, and shared by local highway authorities in England, outside London, between 2016/17 and 2020/21.

Local highways maintenance funding – Budget 2018 – £420 million in 2018/19

In October 2018, the Chancellor announced in the Budget the government was allocating a further £420 million of new money for local highways maintenance in 2018/19. This additional resource was allocated using the highways maintenance funding formula and was used for the repair of roads (including potholes), bridges, and local highways infrastructure generally.

Local highways maintenance challenge fund – £93.4 million in 2019/20

This fund was used to enable 32 local highway authorities in England to successfully bid for funding for 33 major maintenance projects that were otherwise difficult to fund through the normal needs based formula funding. Further details, including previous challenge funding schemes is available.

The 2020/21 £100 million challenge fund (expressions of interest) has been incorporated into the 2020/21 funding allocation and will be distributed to local highways authorities by formula.

Future and additional funding

Local Pinch Point Fund (LPPF) – £150 million

The government will also make £150 million of LPPF funding available to local authorities in 2021/22 and 2022/23 which aims to support projects across England that ease congestion on local routes and for small improvement projects such as for road modelling and design.

National Roads Fund (NRF)

The £28.8 billion National Roads Fund for 2020-2025 was announced in the Budget 2018, which delivers on the government’s commitment to hypothecate English Vehicle Excise Duty to roads spending.

Within the NRF, the Roads Investment Strategy 2 (RIS2), published March 2020, will receive funding of £27.4 billion – greater than the expectation of £25.3 billion set out in the Draft RIS. Further funding will be available for the Major Road Network and Large Local Major Schemes. The split of funding between these 2 areas and its annual profiling will be determined in due course.

Major Road Network (MRN)

The MRN will see new investment in road enhancement schemes on the most important local authority roads. It will support economic growth, open up land for new housing, and focus on schemes that will reduce congestion and improve journey times for motorists, cyclists, pedestrians and freight.

Sub-national Transport Bodies will play a key role in working with their partners and constituent members to prioritise MRN schemes according to the most pressing regional needs. MRN schemes should start being delivered from 2020/21 when the National Roads Fund becomes available.

Local Growth Fund (LGF)

The majority of local transport improvement schemes are funded through the £12 billion Local Growth Fund (LGF). The Department for Transport is providing £6.7 billion to the Local Growth Fund over the 6 years from 2015/16 to 2020/21. Funding is awarded to Local Enterprise Partnerships (LEPs) to invest in infrastructure to promote local growth.

Over 600 transport schemes are being funded, including roads, tram extensions, bus priority, and improvements for cyclists and pedestrians. Examples of the larger transport schemes that have or are being built with this funding include the Transport Hub in Lincoln, Ely Southern Bypass, Congleton Link Road in Cheshire, and the A13 Widening in Thurrock. Funding allocations to LEPs have been already been made for the duration of the current period to 2020/21.

An additional £387 million in 2021-22 was announced in the March 2020 Budget to provide certainty for local areas that they will be able to continue with existing priority Local Growth Fund projects that require funding beyond 2020/21. Of this £137.1 million of funding is to fund LGF schemes which have a known tail of expenditure beyond the next financial year.

Transforming Cities

Transforming Cities is a £2.5 billion transport fund to support connectivity in some of England’s largest cities, launched at the Autumn Budget 2017 and expanded in the 2018 Budget with funding running from 2018/19 to 2022/23. Around half has been allocated to Metro Mayoral Combined Authorities (£1.08 billion) on a devolved basis with the remaining amount (£1.28 billion) allocated across 12 cities.

New funding

Potholes Fund – Budget 2020 – £500 million

Councils will get an extra £500 million in 2020/21 through the new £2.5 billion Potholes Fund announced at Budget 2020. The funding is intended to fix up to 50 million potholes, but will also be available for local authorities to undertake longer-term road resurfacing works to prevent potholes from appearing in the first place.

This funding represents an approximate 45% increase to local road maintenance budgets for 2020/21.

South East

Local highways maintenance

We are confirming allocations for 2020/21 to local highway authorities for repairing potholes on the local road network which fall under the responsibility of those local highway authorities.

We are allocating over £108 million to the South East, enough to fix around 2 million potholes in 2020/21, or to stop them forming in the first place. This funding is in addition to the just under £120 million of block formula funding and nearly £25 million of incentive element funding we are already committed to providing in 2020/21 to help repair our local highways.

A breakdown is as follows:

£ thousands	Pothole and Challenge Fund[footnote 1]	HMB needs	HMB incentive	ITB	Total
South East	108,576	119,905	24,974	47,251	300,706
Medway	1,925	2,048	427	1,589	5,989
Bracknell Forest	1,103	1,369	285	720	3,477
West Berkshire	3,048	3,472	723	910	8,153
Reading	908	1,185	247	1,580	3,920
Slough	708	727	151	1,349	2,935
Windsor and Maidenhead	1,537	1,752	365	851	4,505
Wokingham	1,815	2,136	445	734	5,130
Milton Keynes	2,796	4,122	858	1,527	9,303
Brighton and Hove	1,372	2,110	440	3,059	6,981
Portsmouth	1,050	1,151	240	1,851	4,292
Southampton	1,345	1,371	286	2,124	5,126
Isle of Wight[footnote 2]	2,116	0	0	1,418	3,534
Buckinghamshire	7,573	8,449	1,760	2,257	20,039
East Sussex	7,710	8,554	1,782	2,919	20,965
Hampshire	19,766	21,584	4,495	5,296	51,141
Kent	20,380	21,949	4,571	6,861	53,761
Oxfordshire	11,083	13,434	2,798	3,688	31,003
Surrey	12,497	13,449	2,801	4,784	33,531
West Sussex	9,844	11,043	2,300	3,734	26,921

East Midlands

Local highways maintenance

We are confirming allocations for 2020/21 to local highway authorities for repairing potholes on the local road network which fall under the responsibility of those local highway authorities.

We are allocating over £72 million to the East Midlands, enough to fix around 1.3 million potholes in 2020/21, or to stop them forming in the first place. This funding is in addition to the £83 million of block formula funding and £17 million of incentive element funding we are already committed to providing in 2020/21 to help repair our local highways.

A breakdown is as follows:

£ thousands	Pothole and Challenge Fund[footnote 3]	HMB needs	HMB incentive	ITB	Total
East Midlands	72,049	83,169	17,322	24,893	197,433
Derby	1,713	1,782	371	1,811	5,677
Leicester	1,882	2,102	438	2,556	6,978
Rutland	1,295	1,535	320	458	3,608
Nottingham	1,817	1,782	371	3,390	7,360
Derbyshire	12,906	15,273	3,181	3,644	35,004
Leicestershire	10,174	11,442	2,383	2,728	26,727
Lincolnshire	20,909	24,955	5,197	3,312	54,373
Northamptonshire	10,471	12,292	2,560	3,078	28,401
Nottinghamshire	10,882	12,006	2,501	3,916	29,305

West Midlands

Local highways maintenance

We are confirming allocations for 2020/21 to local highway authorities for repairing potholes on the local road network which fall under the responsibility of those local highway authorities.

We are allocating over £74 million to the West Midlands, enough to fix around 1.4 million potholes in 2020/21, or to stop them forming in the first place. This funding is in addition to the £79 million of block formula funding and £16 million of incentive element funding we are already committed to providing in 2020/21 to help repair our local highways.

A breakdown is as follows:

£ thousands	Pothole and Challenge Fund[footnote 4]	HMB needs	HMB incentive	ITB	Total
West Midlands	74,741	79,003	16,177	31,383	201,304
Herefordshire, County of	7,674	9,272	1,931	1,069	19,946
Telford and Wrekin	2,390	2,778	579	939	6,686
Stoke-on-Trent	1,994	1,915	120	1,666	5,695
Shropshire	11,570	13,275	2,765	1,626	29,236
Staffordshire	14,283	16,154	3,365	3,423	37,225
Warwickshire	9,199	10,421	2,171	2,637	24,428
Worcestershire	9,769	12,076	2,515	2,405	26,765
West Midlands CA[footnote 5]	17,862	13,112	2,731	17,618	51,323
- Birmingham[footnote 6]	-	-	-	-	-
- Coventry	-	-	-	-	-
- Dudley	-	-	-	-	-
- Sandwell	-	-	-	-	-
- Solihull	-	-	-	-	-
- Walsall	-	-	-	-	-
- Wolverhampton	-	-	-	-	-

North West

Local highways maintenance

We are confirming allocations for 2020/21 to local highway authorities for repairing potholes on the local road network which fall under the responsibility of those local highway authorities.

We are allocating over £84 million to the North West, enough to fix around 1.5 million potholes in 2020/21, or to stop them forming in the first place. This funding is in addition to the £96.3 million of block formula funding and £20 million of incentive element funding we are already committed to providing in 2020/21 to help repair our local highways.

A breakdown is as follows:

£ thousands	Pothole and Challenge Fund[footnote 7]	HMB needs	HMB incentive	ITB	Total
North West	84,448	96,377	20,073	43,423	244,320
Warrington	2,270	2,571	535	1,494	6,870
Blackburn with Darwen	1,265	1,552	323	1,424	4,564
Blackpool	1,048	966	201	1,720	3,935
Cheshire East	6,855	8,409	1,751	1,987	19,002
Cheshire West and Chester	5,581	6,398	1,333	1,954	15,266
Cumbria	17,976	21,791	4,538	2,546	46,851
Lancashire	15,891	18,567	3,867	6,054	44,379
Greater Manchester CA[footnote 8]	20,899	22,513	4,689	16,175	64,276
- Bolton	-	-	-	-	-
- Bury	-	-	-	-	-
- Manchester	-	-	-	-	-
- Oldham	-	-	-	-	-
- Rochdale	-	-	-	-	-
- Salford	-	-	-	-	-
- Stockport	-	-	-	-	-
- Tameside	-	-	-	-	-
- Trafford	-	-	-	-	-
- Wigan	-	-	-	-	-
Liverpool City Region CA[footnote 9]	12,663	13,610	2,835	10,069	39,177
- Halton	-	-	-	-	-
- Knowsley	-	-	-	-	-
- Liverpool	-	-	-	-	-
- Sefton	-	-	-	-	-
- St. Helens	-	-	-	-	-
- Wirral	-	-	-	-	-

North East

Local highways maintenance

We are confirming allocations for 2020/21 to local highway authorities for repairing potholes on the local road network which fall under the responsibility of those local highway authorities.

We are allocating over £36 million to the North East, enough to fix around 650,000 potholes in 2020/21, or to stop them forming in the first place. This funding is in addition to the £41.3 million of block formula funding and £8 million of incentive element funding we are already committed to providing in 2020/21 to help repair our local highways.

A breakdown is as follows:

£ thousands	Pothole and Challenge Fund[footnote 10]	HMB needs	HMB incentive	ITB	Total
North East	36,672	41,312	8,604	18,695	105,283
Tees Valley CA[footnote 11]	6,891	7,601	1,583	4,746	20,821
- Hartlepool	-	-	-	-	-
- Middlesbrough	-	-	-	-	-
- Redcar and Cleveland	-	-	-	-	-
- Stockton-on-Tees	-	-	-	-	-
- Darlington	-	-	-	-	-
North East CA[footnote 12]	-	-	-	13,949	13,949
- County Durham	8,448	9,564	1,992	-	20,004
- Northumberland	11,421	14,036	2,923	-	28,380
- Gateshead	1,996	2,204	459	-	4,659
- Newcastle upon Tyne	2,178	2,184	455	-	4,817
- North Tyneside	1,851	1,817	378	-	4,046
- South Tyneside	1,275	1,246	260	-	2,781
- Sunderland	2,612	2,660	554	-	5,826

Yorkshire and Humber

Local highways maintenance

We are confirming allocations for 2020/21 to local highway authorities for repairing potholes on the local road network which fall under the responsibility of those local highway authorities.

We are allocating over £72 million to Yorkshire and Humber, enough to fix around 1.3 million potholes in 2020/21, or to stop them forming in the first place. This funding is in addition to the £75.3 million of block formula funding and £15 million of incentive element funding we are already committed to providing in 2020/21 to help repair our local highways.

A breakdown is as follows:

£ thousands	Pothole and Challenge Fund[footnote 13]	HMB needs	HMB incentive	ITB	Total
Yorkshire and the Humber	72,419	75,313	15,684	32,633	196,049
Kingston upon Hull, City of	1,668	1,811	377	2,230	6,086
East Riding of Yorkshire	7,915	8,889	1,851	1,640	20,295
North East Lincolnshire	1,505	1,606	334	1,479	4,924
North Lincolnshire	3,194	3,702	771	1,159	8,826
York	1,815	1,827	380	1,570	5,592
North Yorkshire	20,773	23,858	4,969	3,023	52,623
Sheffield City Region CA[footnote 14]	13,605	10,113	2,106	8,428	34,252
- Barnsley	-	-	-	-	-
- Doncaster	-	-	-	-	-
- Rotherham	-	-	-	-	-
- Sheffield[footnote 15]	-	-	-	-	-
West Yorkshire CA[footnote 16]	21,944	23,507	4,896	13,104	63,451
- Bradford	-	-	-	-	-
- Calderdale	-	-	-	-	-
- Kirklees	-	-	-	-	-
- Leeds	-	-	-	-	-
- Wakefield	-	-	-	-	-

East of England

Local highways maintenance

We are confirming allocations for 2020/21 to local highway authorities for repairing potholes on the local road network which fall under the responsibility of those local highway authorities.

We are allocating over £88 million to the East of England, enough to fix around 1.6 million potholes in 2020/21, or to stop them forming in the first place. This funding is in addition to the £99.3 million of block formula funding and £20 million of incentive element funding we are already committed to providing in 2020/21 to help repair our local highways.

A breakdown is as follows:

£ thousands	Pothole and Challenge Fund[footnote 17]	HMB needs	HMB incentive	ITB	Total
East of England	88,583	99,374	20,346	29,174	237,476
Cambridgeshire & Peterborough CA	12,554	14,862	3,095	4,597	35,108
- Cambridgeshire	-	-	-	-	-
- Peterborough	-	-	-	-	-
Luton	1,045	1,101	229	1,457	3,832
Southend-on-Sea	1,032	1,121	233	1,401	3,787
Thurrock	1,336	1,604	334	971	4,245
Bedford	2,069	2,402	150	1,153	5,774
Central Bedfordshire	3,355	3,586	747	1,365	9,053
Essex	17,979	19,774	4,119	6,275	48,147
Hertfordshire	11,362	14,327	2,984	4,568	33,241
Norfolk	22,231	23,043	4,799	4,141	54,214
Suffolk	15,620	17,553	3,656	3,246	40,075

South West

Local highways maintenance

We are confirming allocations for 2020/21 to local highway authorities for repairing potholes on the local road network which fall under the responsibility of those local highway authorities.

We are allocating over £112 million to the South West, enough to fix around 2 million potholes in 2020/21, or to stop them forming in the first place. This funding is in addition to the £130.5 million of block formula funding and £27 million of incentive element funding we are already committed to providing in 2020/21 to help repair our local highways.

A breakdown is as follows:

£ thousands	Pothole and Challenge Fund[footnote 18]	HMB needs	HMB incentive	ITB	Total
South West	112,510	130,548	27,188	30,546	300,792
West of England CA[footnote 19]	8,519	10,254	2,135	5,183	26,091
- Bath and North East Somerset	-	-	-	-	-
- Bristol, City of	-	-	-	-	-
- South Gloucestershire	-	-	-	-	-
North Somerset	2,610	3,229	672	972	7,483
Plymouth	1,794	1,871	390	1,944	5,999
Torbay	1,212	1,174	244	1,063	3,693
Bournemouth, Christchurch and Poole	2,864	3,084	641	3,078	9,667
Swindon	2,016	2,253	469	1,378	6,116
Cornwall	16,426	18,254	3,802	4,105	42,587
Isles of Scilly[footnote 20]	89	0	0	0	89
Wiltshire	10,930	13,357	2,782	2,181	29,250
Devon	28,869	34,042	7,090	3,601	73,602
Dorset	9,112	10,564	2,201	1,971	23,848
Gloucestershire	12,667	14,350	2,989	2,861	32,867
Somerset	15,402	18,116	3,773	2,209	39,500

Footnotes

1. Funding for England includes the £500 million Pothole Fund for 2020/21, the £100 million Challenge Fund for 2020/21, and the £50 million Pothole Action Fund allocation for 2020/21, totalling £650 million. ↩

2. Highways maintenance for the Isle of Wight is provided through a Highways Maintenance PFI so do not receive HMB. ↩

3. Funding for England includes the £500 million Pothole Fund for 2020/21, the £100 million Challenge Fund for 2020/21, and the £50 million Pothole Action Fund allocation for 2020/21, totalling £650 million. ↩

4. Funding for England includes the £500 million Pothole Fund for 2020/21, the £100 million Challenge Fund for 2020/21, and the £50 million Pothole Action Fund allocation for 2020/21, totalling £650 million. ↩

5. West Midlands Combined Authority comprises Birmingham, Coventry, Dudley, Sandwell, Solihull, Walsall and Wolverhampton. Highways maintenance for Birmingham is provided through a Highways Maintenance PFI so do not receive HMB. ↩

6. Authorities with a Highways Maintenance PFI ↩

7. Funding for England includes the £500 million Pothole Fund for 2020/21, the £100 million Challenge Fund for 2020/21, and the £50 million Pothole Action Fund allocation for 2020/21, totalling £650 million. ↩

8. Greater Manchester Combined Authority comprises Bolton, Bury, Manchester, Oldham, Rochdale, Salford, Stockport, Tameside, Trafford, and Wigan. ↩

9. Liverpool City Region Combined Authority comprises Halton, Knowsley, Liverpool, Sefton, St Helens, and Wirral. ↩

10. Funding for England includes the £500 million Pothole Fund for 2020/21, the £100 million Challenge Fund for 2020/21, and the £50 million Pothole Action Fund allocation for 2020/21, totalling £650 million. ↩

11. Tees Valley Combined Authority comprises Darlington, Hartlepool, Middlesbrough, Redcar & Cleveland, and Stockton-on-Tees. ↩

12. North East Combined Authority comprises Gateshead, Newcastle upon Tyne, North Tyneside, South Tyneside, Sunderland, County Durham, and Northumberland. Maintenance funding is made to each component authority. ↩

13. Funding for England includes the £500 million Pothole Fund for 2020/21, the £100 million Challenge Fund for 2020/21, and the £50 million Pothole Action Fund allocation for 2020/21, totalling £650 million. ↩

14. Sheffield City Region Combined Authority comprises Barnsley, Doncaster, Rotherham, and Sheffield. Highways maintenance for Sheffield is provided through a Highways Maintenance PFI so do not receive HMB. ↩

15. Authorities with a Highways Maintenance PFI ↩

16. West Yorkshire Combined Authority comprises Bradford, Calderdale, Kirklees, Leeds, and Wakefield. ↩

17. Funding for England includes the £500 million Pothole Fund for 2020/21, the £100 million Challenge Fund for 2020/21, and the £50 million Pothole Action Fund allocation for 2020/21, totalling £650 million. ↩

18. Funding for England includes the £500 million Pothole Fund for 2020/21, the £100 million Challenge Fund for 2020/21, and the £50 million Pothole Action Fund allocation for 2020/21, totalling £650 million. ↩

19. West of England Combined Authority comprises Bath and North East Somerset, City of Bristol, and South Gloucestershire. ↩

20. The Isles of Scilly received £1.8 million in 2014/15 to upgrade and maintain the publicly maintained highways for which they are responsible. ↩