The Labour Government has unveiled plans for a new Highways (Financing) Bill that could significantly reshape how major road infrastructure projects are funded across England — including the possibility of private investment-backed road charging schemes.
Announced during the King’s Speech at the State Opening of Parliament, the proposed legislation aims to accelerate the delivery of large-scale infrastructure by allowing private finance to play a much bigger role in funding roads, bridges and tunnels.
Central to the proposals is the introduction of a Regulated Asset Base (RAB) funding model, a system already used in parts of the energy and utilities sectors. Under the model, private investors and firms would be able to finance infrastructure projects in exchange for long-term regulated returns.
In the case of roads, this could potentially include user charging or tolling arrangements where operators recover investment costs through fees paid by motorists using the infrastructure.
While the full details of the Bill are yet to be published, the Government said the legislation would establish a framework allowing infrastructure projects to be operated by licensed providers under regulatory oversight.
Officials say the aim is to unlock billions of pounds of private capital for nationally significant infrastructure schemes while reducing pressure on public finances and speeding up project delivery.
Under the proposed system, a regulator would be appointed to ensure infrastructure is maintained appropriately, operated efficiently and delivered at what ministers describe as a “fair and proportionate cost” to users.
The Government also confirmed that a financial “backstop” mechanism would be introduced to minimise disruption and ensure roads remain operational if a private operator were to fail financially.
Although the first major project expected to use the RAB model is likely to be the Thames Tideway Tunnel sewer project, attention is already turning towards major highways schemes that could follow — including the long-delayed Lower Thames Crossing.
Industry leaders have welcomed the prospect of increased infrastructure investment, arguing that the UK’s strategic road network is essential to economic growth, supply chain resilience and national productivity.
Ben Fletcher, Chief Operating Officer at Logistics UK, said:
“A reliable road network is critical for the UK’s logistics sector and the nation’s economic prosperity, with delays and costs caused by poor infrastructure felt by businesses and consumers alike.”
“It is estimated that every £1 invested in the Strategic Road Network returns over £2 to society, and a reliable road network is also critical for increasing the resilience of the UK’s supply chain by enabling better connectivity with all other modes of freight transport.”
The announcement follows recent Government commitments to invest £28 billion into the UK road network, signalling a renewed focus on infrastructure delivery amid growing concerns around congestion, connectivity and economic competitiveness.
However, the prospect of private finance being linked to road user charging is likely to generate political debate, particularly around affordability and public ownership of essential infrastructure.
Critics may also raise concerns over whether motorists could ultimately face increased costs through tolls or direct usage fees in exchange for faster delivery of major projects.
Supporters of the model, meanwhile, argue that alternative funding mechanisms are necessary if the UK is to deliver large-scale infrastructure improvements at the pace required, particularly at a time of increasing pressure on public spending.
With further details of the Highways (Financing) Bill expected in the coming months, the proposals could mark one of the most significant shifts in transport infrastructure funding policy in decades.