A private company could become the highway authority for a major road. That is a key change the Highways (Financing) Bill would permit, according to a Department for Transport overview published on 6 October.
Regulated asset base funds strategic road projects
The bill sets out a statutory framework for private investment to build, operate, maintain and improve strategic roads using a regulated asset base (RAB) model. This includes existing and new roads.
A licensed company could take full responsibility for a road’s management, acting as its highway authority. The Office of Rail and Road (ORR) would act as independent regulator, ensuring fair charges and road operation standards.
This approach is expected to apply only to a limited number of large-scale projects. The government has indicated the Lower Thames Crossing may be the first to use it.
How the regulated asset base model works
The regulator sets what the company can earn, based on investment and an allowed rate of return. The company recoups costs through user charges, such as tolls, which the ORR monitors for fairness and efficiency.
The bill covers how licences to operate roads are granted, their conditions and modifications. It details toll collection enforcement, delegation of functions, and transfer arrangements.
Insolvency measures aim to keep roads running if a company experiences financial trouble. A stakeholder group will advise the ORR, representing road users and other interests.
Barrierless tolling and additional powers
The bill enables barrierless charging on toll roads, a technology not currently available for older schemes like the M6 Toll. It does not mandate this change but suggests remote payment can reduce congestion and improve safety.
The Secretary of State gains regulatory powers over litter management on these roads.
Impact and scrutiny
The Regulatory Policy Committee recently reviewed the bill's impact assessment, rating the evidence as weak. The committee highlighted uncertainty over economic effects and household impacts. It noted that higher user fees might shift costs from taxpayers to drivers, balanced by potential tax reductions or other benefits.
The committee described the case for government intervention as credible but distinct from policy endorsement.
What this means for the sector
The bill has not yet become law. Drivers will see no immediate change. For contractors and authorities, the key question is who holds responsibility and covers costs once a company holds a licence under this regime.
The Highways Financing Bill offers an additional delivery route for strategic roads, rather than replacing existing frameworks.
