28. The Department is responsible for overseeing and funding investment in the strategic road network, which comprises 4,300 miles of motorways and A-roads and is a vital piece of national infrastructure. In 2015, the Department introduced a new regime of 5-yearly road investment strategies to improve management of the strategic road network. Highways England, the government-owned company responsible for operating, maintaining and enhancing England's strategic road network, is held to account by the Department for delivering the investment strategy. In 2017, the National Audit Office (NAO) found that the first Road Investment Strategy, amounting to £12.8 billion over the period 2015 to 2020, was an improvement on the Department's previous management of the strategic road network. However, the NAO also found that the speed with which the strategy was designed led to the Department pausing, cancelling or rescheduling a number of the 112 planned schemes for affordability reasons or to minimise disruption from the construction schemes on the road network.53
29. The Department told us that it and Highways England had now smoothed the profile of projects included in the strategy, and as a consequence, there was a tail of projects that would now form part of the second Road Investment Strategy Period between 2020 and 2025. The Department told us that it expected to finalise this second strategy in 2019 and was not able to provide a figure for the amount of funding that would be available for new enhancements to the road network. It did, however, state that it expected around 40% of the projects that would now be completed in the second strategy period would have started prior to 2020. The Department and Treasury had allocated £25.3 billion for the second strategy period.54
30. The Department is leading two significant road enhancement projects:
• A £1.6 billion upgrade of the A303 (Stonehenge tunnel and bypass of the village of Winterbourne Stoke), replacing the existing single carriageway between Amesbury and Berwick Down to improve connections between the south east and the south west and to facilitate economic growth.
• A £4.4 billion to £6.2 billion lower Thames crossing (LTC) to relieve congestion at the existing Dartford Crossing and support local and regional economic development.
• The Department planned for these to be part-funded through PF2.55 However, in Budget 2018, Treasury announced that it would no longer use PF2 for new projects, having found the model to be inflexible and overly complex.56
31. The Department confirmed that it remained fully committed to these "vital projects", but that the Stonehenge tunnel and LTC "sit outside" the funding earmarked for the second Road Investment Strategy. The Department told us that it understood that Treasury supported its broad spending plans for the second strategy period and the Department's aim to continue with the Stonehenge tunnel and LTC. On this basis, the Department believed that Treasury would provide funding for these projects to replace lost funding through PF2.57 We have previously examined PF2 as part of our inquiry on the Whole of Government Accounts. We found that the Treasury was not planning to replace PF2 with a single preferred approach and had not confirmed whether projects will be part, or fully, funded by the public purse. During our evidence session on the Whole of Government Accounts, the treasury told us that it would decide which funding models to use on a project-by-project basis. We remain concerned that some of the alternative models, such as contracts for difference, may not be value for money.58
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53 Report by Comptroller and Auditor General, Progress with the Road Investment Strategy, Session 2016-17, HC 1056, 22 March 2017; Office of Rail and Road, Review of Highways England's capital delivery plan, 16 July 2018
54 Qq 92-93, 106; Letter from Bernadette Kelly to Meg Hillier MP - Follow-up from evidence session, 19 December.
55 Letter from HM Treasury to Chair, 11 April 2018
56 HM Treasury, Budget 2018, HC 1629, October 2018
57 Qq 93-97
58 Committee of Public Accounts, Whole of Government Accounts, 74th Report of Session 2017-19, HC 464, 25 January 2019