Question to the Department for Transport:

To ask His Majesty's Government what penalties exist for local highway authorities which do not spend the portion of funding allocated to them to address potholes on road repairs.

The Government recognises that historic underinvestment has meant that authorities have not necessarily had the resources to maintain roads in the way that they would want to. The Government has therefore announced a record £7.3 billion for the next four years. This is building on the c.£1.6 billion in capital funding for local highways maintenance in England for the financial year 2025/26, which includes £500 million of additional funding when compared to funding levels for 2024/25.

In 2025/26, 25% of the additional funding was designated as incentive funding and was contingent upon local highway authorities meeting certain reporting requirements. A portion of the £7.3 billion over the next four years will also be designated as incentive funding and will be subject to local highway authorities demonstrating that they comply with best practice in highways maintenance, for example by spending all the DfT’s capital grant on highways maintenance and adopting more preventative maintenance. Authorities that fail to meet these standards will have this incentive funding withheld.

In addition, on 11 January, DfT published a new traffic light rating system for all local highway authorities in England. Under this system, each authority is rated red, amber or green based on the condition of their roads, how effectively they spend their record Government funding, and whether they do so using best practice. Authorities that state their capital investment to maintain local highways is less than DfT’s capital grant for highways maintenance receive a red spend scorecard under this rating system.