Major Road Projects Face Axe as Government Looks to Redirect Transport Funding into Defence

The future of several flagship road schemes has been thrown into doubt after the Government confirmed it is examining whether to scale back its next five-year roads investment programme to help finance a £15 billion boost in defence spending.

Under proposals outlined alongside the newly published Defence Investment Plan (DIP), ministers are considering reducing elements of the third Road Investment Strategy (RIS3), with two major National Highways schemes identified as potential candidates for cancellation.

However, while the A38 Derby Junctions scheme remains under consideration, the inclusion of the A46 Newark Bypasshas raised eyebrows across the sector. National Highways confirmed only last week that the A46 scheme would not be progressing under its current investment programme, meaning many within the industry had already viewed the project as effectively cancelled before today's announcement.

The move follows a wider Government decision requiring departments to contribute towards increased defence expenditure. While all Whitehall departments have been asked to identify efficiency savings equivalent to one per cent of their budgets, the Department for Transport and the Department for Energy Security and Net Zero have been asked to make substantially larger contributions because of their sizeable capital investment programmes.

A funding explainer published jointly by HM Treasury and the Ministry of Defence confirms that ministers intend to consult on proposed reductions before making any final decisions.

It states:

"DfT will provide savings of up to £700M from its roads funding. The Department will consult on reductions to the third Road Investment Strategy (RIS3) – including the potential cancellation of the A38 Derby Junctions and A46 Newark Bypass schemes, both of which are yet to enter contract and not as far along as other road schemes.

"There will be stakeholder consultations before any final decision is taken."

The announcement represents one of the first indications that the Government's increased focus on defence spending could have direct consequences for major transport infrastructure investment.

RIS3, covering the period from 2026 to 2031, was unveiled earlier this year with a proposed budget of around £27 billion, including funding for 30 major enhancement and renewal projects across England's Strategic Road Network. The programme also includes widespread resurfacing, maintenance and capacity improvements managed by National Highways.

Despite the proposed reductions, ministers insist that local highway maintenance budgets will remain protected.

The Government said:

"DfT will also explore limited reductions to as yet uncommitted roads funding. The government remains committed to protecting funding for local authorities to mend potholes and repair their roads, protecting investment in rail infrastructure, including Northern Powerhouse Rail, and the proposals will not impact bus or rail services."

Alongside transport, the Department for Energy Security and Net Zero has also been asked to identify an additional £2 billion of savings while maintaining investment in renewable energy and nuclear generation.

Industry leaders have reacted cautiously, warning that reducing long-term infrastructure investment could have significant economic consequences.

Sue Percy, Chief Executive of the Chartered Institution of Highways & Transportation (CIHT), said:

"CIHT recognises the pressures on public finances and the need to balance competing national priorities, but transport investment provides substantial long-term economic, social and environmental benefits.

"Funding certainty and a stable pipeline of infrastructure projects is essential to enable effective planning, support supply chain confidence, deliver value for money and create the resilient transport networks needed to support growth, decarbonisation and thriving communities.

"Any changes to planned investment should be considered carefully against these wider long-term benefits."

The Asphalt Industry Alliance welcomed the Government's commitment to maintaining road maintenance budgets but warned that local authorities already face an enormous repair challenge.

AIA Chair David Giles said:

"It is disappointing that capital funding for new road projects looks set to be cut, but it is vital that the government honours the pledge made today to protect funding for local authorities to carry out much needed road maintenance and pothole repairs.

"We understand that in an increasingly challenging world tough public funding decisions must be made. However, local roads in England and Wales are already in a woeful condition and face a backlog of repairs that now stands at a whopping £18.62bn.

"All services depend on our local roads. That's why the government must ensure that its £7.3bn commitment to 2030 to support repairs and prevent further decline is fully delivered and is not diverted elsewhere."

The Association for Consultancy and Engineering also questioned the strategy, arguing that infrastructure investment and national security should not be viewed as competing priorities.

Ben Brittain, Director of Public Affairs at the Association for Consultancy and Engineering, said:

"Axing growth-driving projects, such as road and energy projects, to fund defence is the wrong way to fund defence sustainably."

With consultation now expected, attention will turn to whether ministers ultimately proceed with trimming RIS3 or seek alternative ways to finance the UK's expanding defence ambitions without delaying critical transport infrastructure.