Uncertainty Over Outcomes From Spending on Discontinued Road Projects

Questions remain about the extent to which significant public funding spent on road schemes that were later cancelled has delivered any lasting value.

National Highways has indicated it cannot clearly point to direct benefits arising from around £500M allocated to projects that did not proceed to completion.

This issue sits within a wider context highlighted by the National Audit Office (NAO), which reported that the Department for Transport (DfT) wrote off more than £2.7bn following the cancellation of HS2 Phase 2 and a number of major road initiatives in 2024. A substantial portion of this relates specifically to highways investment.

During the 2024–25 financial year, £410M was written off in connection with four major road schemes that were halted: the A303 Amesbury to Berwick Down scheme (commonly known as the Stonehenge Tunnel), the A1 Morpeth to Ellingham dualling, the A27 Arundel bypass, and the A358 Taunton to South Fields project. These figures build on an earlier £62M write-off linked to the discontinuation of all-lane running smart motorways.

Further financial impacts were identified within National Highways’ own accounts. The organisation recorded an additional £46M in losses tied to cancelled projects such as the A5036 Princess Way, A47 Great Yarmouth junction improvements, M27 Junction 8 in Southampton, and the A27 Worthing and Lancing scheme. Other cancellations, including the A12 to A120 widening and A47 Wansford to Sutton, are expected to add to these totals but fall outside the same reporting period.

The question of whether any value can be retained from this spending was raised during a Transport Select Committee session held at the outset of Road Investment Strategy 3 (RIS3). MPs expressed concern that, despite substantial expenditure, the cancelled projects did not result in completed infrastructure. They sought clarification on whether early-stage work undertaken before cancellation might still provide some form of public benefit.

In response, National Highways clarified that decisions to cancel schemes are made by the DfT. Its role, the organisation explained, is focused on managing the strategic road network and ensuring that projects—whether progressing or being closed—are handled as efficiently as possible within the funding provided.

Nicola Bell, chief capital delivery officer, noted that efforts are made to achieve value for money throughout a project’s lifecycle. However, she acknowledged that certain costs—such as preliminary investigations, land acquisition, and contractual commitments—are often unavoidable in the early stages of development. When projects are subsequently cancelled, these elements do not typically result in tangible assets and may offer only limited residual value.

National Highways also indicated that such expenditure can stem from a range of necessary activities, including supply chain obligations and preparatory works associated with planning approvals or land processes. While these do not always produce visible outcomes, the organisation emphasised that insights gained are used to inform future schemes and improve delivery approaches.

Alongside financial scrutiny, the committee examined how National Highways measures its performance. Some key performance indicators (KPIs) have been adjusted from fixed targets to ranges, reflecting the difficulty of predicting certain outcomes with precision. This shift had previously drawn criticism from the Office of Rail and Road (ORR), which questioned the clarity of such measures.

The organisation acknowledged these concerns, explaining that only a limited number of metrics now use ranges and that this approach was agreed in discussion with both the DfT and ORR. According to chief customer and strategy officer Elliot Shaw, while ranges may make performance assessment less straightforward, they better reflect the uncertainties inherent in areas such as traffic modelling.

Cost pressures experienced during Road Investment Strategy 2 (RIS2) were also discussed. National Highways pointed to factors including the Covid-19 pandemic, inflation in construction costs, planning delays, and the impact of cancelled projects. Despite these challenges, it reported delivering 30 enhancement schemes and achieving over £2bn in efficiencies, though these savings did not fully offset rising costs.

In preparation for RIS3, the organisation has adjusted certain budgets to improve resilience against inflation and is reviewing its commercial strategies. It also noted that oversight arrangements have been updated in collaboration with the DfT to strengthen monitoring and project control.

Committee members suggested that further improvements in oversight and decision-making processes may still be needed, particularly for schemes at risk of delay or cancellation. National Highways stated it will continue working with both the ORR and the DfT to refine forecasting and governance as the new investment period progresses.

A spokesperson for National Highways reiterated that managing England’s motorway and major A road network requires careful financial planning. They added that, following government decisions to cancel projects in 2024, efforts were made to conclude those schemes at the most appropriate stage in terms of safety and cost efficiency.