The UK highways maintenance market is valued at more than £10bn and represents a major component of UK infrastructure spending. Public sector capital spending remains under constant pressure. However, the Government has committed to major spending and investment programmes in the road network, as well as other transport projects driven by factors such as increased road congestion, rising population levels and deterioration of roads by adverse winter weather. The Government is facing funding difficulties, with borrowing levels increasing and tax receipts lower than some of the initial projections. As a result, it is actively examining ways of attracting private capital into highways, although this process remains at an early stage of development.
Expenditure on roads infrastructure fell by a significant amount in 2016, although the general trend since the start of the present decade has been upwards. Transport represents one of the largest areas of Government expenditure – it has generally been recognised that investment in infrastructure will assist economic growth across the UK. Furthermore, in the 2016 Budget, the Government announced it was to increase capital transport budgets by almost double by 2019/2020.
Highways England is responsible for operating the strategic road network in England on behalf of the Department for Transport. Outside of England, responsibility for operating and maintaining the motorway and trunk road network lies with bodies such as Transport Scotland, the Welsh Assembly Government (via two Trunk Road agencies) and Transport NI. The remainder of the network (i.e. non-trunk roads) is maintained by 217 local authorities. Scotland is divided into single tier councils who maintain roads. Wales has unitary authorities, and the Transport NI maintains roads in Northern Ireland.
In terms of market features, product supply occurs mainly through direct supply on an annual tender or by individual order, and very much depends on the materials concerned. Some products are traditionally sourced using the annual tender process. Local authorities do have access to buying groups, but they are not very popular for highways maintenance. Innovations within the market include photovoltaic road surfacing and solar-powered road studs, greater use of natural and recycled materials and/or aggregates and micro-foamed asphalt which lowers carbon dioxide emissions. Demand is likely to continue rising for products which can help to reduce the time spent on site and therefore minimise disruption to road users.
Going forward, future Government budgets and spending levels are likely to be heavily influenced by what form Brexit will take, and its impact upon the UK economy. However, investment in road construction and maintenance is projected to increase over the short to medium term, unless the UK economy suffers a major contraction. Additionally, there are likely to be changes in the way certain highways are maintained. The next decade or so is likely to witness greater impact of technological advancements and ‘smart’ systems, as well as more consideration given to the environmental impact of highways maintenance projects. Changes in the way maintenance contracts are introduced are also expected.