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Government should introduce pay-as-you-go roads model by 2030

20 March 2019

ICE’s latest policy paper explores the challenges and opportunities a pay as you go model for the nation’s busiest roads would bring and challenges government to act now.  

Government should introduce pay-as-you-go roads model by 2030

The government has 10 years to implement a fair, reliable and sustainable method of roads revenue to ensure the UK’s economic and social wellbeing, says the Institution of Civil Engineers (ICE).

The recommendation is made in ICE’s latest policy paper, Pay As You Go – Achieving Sustainable Roads Funding in England.

The paper expands on a recommendation made in ICE’s 2018 State of the Nation: Infrastructure Investment report that “the government should give serious consideration to replacing the existing generation of road taxes with a pay-as-you-go model for the busiest roads in England”.

A survey, conducted by YouGov last year, found that 47% of the British public would support a pay-as-you-go model, if it replaced both Vehicle Excise Duty (VED) and fuel duty.

The paper outlines some of the challenges that introducing a new system would bring, such as new infrastructure and technology, privacy and security concerns and potential regulation.

It also recognises the need for any new system to remain affordable, and not disadvantage people based on location or economic status.

Rachel Skinner, ICE Vice President for Public Voice, said: "Ensuring a fair, reliable and sustainable way of securing funding to improve and maintain our roads is crucial to safeguarding the UK’s economic and social wellbeing.

"Britain moves almost three times more goods by road than by water and rail combined, and almost 90% of the population’s journeys are made this way.

"We know there is some public support for a ‘pay-as-you-go’ model to replace current roads taxation, and a range of options should be explored to craft a new, fair and lower carbon solution for road users of the future.

"We would urge the government to give this urgent and serious consideration, with a view to an early decision on implementation well before the end of the next decade.”

Based on the ongoing decrease in fuel duty – for reasons including an increase in fuel efficiency and electric vehicle uptake – and likely decrease in VED – due to exemptions currently given for electric and lower emission vehicles – revenue from roads is set to significantly fall in the next decade.

If the government is serious about all new car and van sales being zero emission by 2040, it must consider the impact this change will have on roads revenue – and create a sustainable alternative to ensure roads remain safe and useable for the future.

Skinner added: "Today’s two main sources of UK roads revenue – fuel duty and vehicle excise duty – are both in danger of significantly declining by 2030 and the landscape around vehicle fleets, new technologies and fuel usage is changing fast.

"Now is the time for the government to reshape the future funding of our road networks, given their crucial role in society and our future connectivity, to ensure a new system is up and running before it’s too late.”

ICE recommends that this alternative system is in place for the nation's busiest roads no later than the end of 2030, to ensure the deficit that may be felt by these declining revenues doesn't have an impact on the ability to maintain the UK’s roads.

  • Emma Beer, media relations manager at ICE