Pay As You Go – Achieving Sustainable Roads Funding in England

This paper furthers a policy recommendation made in State of the Nation 2018: Infrastructure Investment for government policymakers to consider a pay as you go model for England’s busiest roads.

Specifically, the paper sets out the following recommendations:

  • The following principles should be adhered to in developing a future pay as you go (PAYG) model:
    • Any pay as you go model that's deployed should consider a range of measures, including: vehicle weight, emissions, noise, overall efficiency and intensity of use.
    • Any pay as you go model shouldn't raise more than is collected from existing VED and fuel duty revenues, and care should be taken to avoid additional financial so as to create any additional financial pressures for people from lower socio-economic groups.
    • The government should consider a road ownership model for the SRN where the government or private companies collect revenue, manage data and maintain roads on a concession basis.
    • In view of the existing simplicity of collecting VED and fuel duty revenues, collection methods underpinning any pay as you go model should be transparent, simple to understand and protect the privacy of all users.
  • The government must examine the tax revenue implications of electric and self-driving vehicles within the scope of any further consultation into new regulation or legislation for the UK’s self-driving future.
  • A pay as you go replacement for road-related taxes, which safeguards funding of road infrastructure, should be in place by 2030, before revenues from fuel duty decline significantly, or connected and autonomous vehicles become commonplace.

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