National Highways has been unable to confirm whether any benefits have been derived to the public or the organisation from £500M public money wasted on cancelled schemes.

At the end of last year, the National Audit Office (NAO) revealed the Department for Transport (DfT) had to write off over £2.7bn due to the cancelling of HS2 Phase 2 and numerous major road projects in 2024.

During the 2024-25 financial year, the DfT wrote off £410M of spending on four major road projects, which it has cancelled. They were: A303 Amesbury to Berwick Down (aka the Stonehenge Tunnel), A1 Morpeth to Ellingham Dualling, A27 Arundel Bypass and A358 Taunton to South Fields. This came on top of £62M written off in the previous year through the cancellation of all-lane running smart motorways.

The NAO also noted a further £46M in 2024-25 losses for National Highways due to cancellations of the A5036 Princess Way, A47 Great Yarmouth Junction Enhancement, M27 Southampton Junction 8 and the A27 Worthing & Lancing Improvements.

These figures didn’t include the sums written off by the cancellations of the A12 to A120 Widening and the A47 Wansford to Sutton, which occurred this financial year.

Now National Highways has been quizzed on whether the £500M squandered on these cancelled schemes has created any benefits for either the public or the roads body.

Speaking in a Transport Select Committee meeting on the beginning of the Road Investment Strategy 3 (RIS3), held yesterday (22 April) MPs raised concerns that the funding spent on the cancelled schemes was a waste of taxpayer’s money.

MPs pressed National Highways over the capital schemes cancelled in 2024 stating that with the recorded write-down of just under £500M “no asset was delivered”.

MP for Birmingham Northfield Laurence Turner asked whether any public value could be salvaged from preparatory work on cancelled schemes.

“Turning to capital schemes, a number of schemes were cancelled in 2024 and National Highways’ annual report records a write-down in value of just under half a billion pounds says that no asset was delivered,” he asked.

“Was there any value to the public that can be carried forward from the work that was done on these schemes prior to cancellation?”

In response, National Highways said responsibility for cancellation decisions sits with the Department for Transport (DfT).

“We work very closely with the DfT to close those projects once the decision is made effectively but our role is to operate, maintain and improve the network within the funding that we’re given and that requires careful financial management,” said Nicola Bell, National Highways chief capital delivery officer.

“We do all we can to deliver value for money and we do make the utmost effort to close down the projects at the safest and most cost effective stage, but the decision to cancel the projects is one for the DfT.”

The roads body did say some preparatory work, such as exploratory works, land-related costs and commercial commitments, can see incurred costs that do not produce a finished asset. Regardless, this can result in limited benefit, National Highways did admit.

“Perhaps the costs can be incurred for a range of reasons, whether we’ve had to do exploratory work to understand the project, whether that’s commercial commitments or we’ve done preparatory works that might be linked to land costs,” Bell continued.

“Ultimately, when the decision is taken to cancel the project, our role is to close it down as effectively as we can.”

A National Highways spokesperson stated to NCE the costs are normally attributed to supply chain and commercial commitments, completion or reversing of preparatory works, ongoing blight or land purchases linked to Development Consent Order removals.

With the expenditure often creating no benefit the spokesperson explained how National Highways intends to ensure that lessons are learned and processes are improved for future road improvement schemes.

During the meeting, National Highways officials further stated it had moved a small number of performance metrics from fixed targets to target ranges to reflect inherent uncertainty in measuring some key performance indicators (KPIs). The change, which was criticised in the Office for Road and Rail’s (ORR) efficiency review, prompted questions from the committee about transparency and accountability.

Committee members cited strong language in the ORR report, which described the proposed ranges as “largely arbitrary”.

National Highways acknowledged the criticism and said discussions with both the DfT and the ORR had led to agreement that ranges are appropriate only for a “handful” of measures.

National Highways chief customer and strategy officer Elliot Shaw said: “There’s two or three areas where we’ve moved to ranges.

“What that does mean is it’s a little bit more challenging for oral to monitor, because there’s less of a straight pass or fail.

“There is a range of acceptability.”

“It is very, very difficult to model KPIs”, he continued further adding that the organisation does not claim to have a “perfect delay model”.

Responding to questions about cost escalations during Roads Investment Strategy 2 (RIS2), National Highways pointed to a series of external and internal factors including the Covid pandemic, construction inflation, planning delays and the project cancellations.

Despite those pressures, National Highways noted it opened 30 enhancement schemes during RIS2 and claimed to have delivered over £2bn of efficiencies. It did however concede those savings did not fully offset cost increases.

The company said it had re-baselined some budgets to be more resilient to inflationary pressures and is reviewing commercial models.

Officials said lessons from RIS2 had been incorporated into planning for RIS3 and that the DfT’s oversight arrangements had been altered to improve monitoring.

The committee responded to these claims by requesting the evidence base and oversight arrangements for projects that are delayed or facing cancellation to be reformed even further now we have entered RIS3.

National Highways told the committee it would continue working with the ORR and the DfT to refine oversight and improve forecasting as RIS3 is finalised.

NCE has contacted the DfT for comment.

A National Highways spokesperson said: “Operating and maintaining 4,500 miles of motorways and major A roads within our funding requires careful financial management and we do everything we can to make sure our projects deliver value for money.

“Following the Government’s decision to cancel several schemes in 2024, costs were incurred to conclude projects at the most efficient and safe point in the scheme.”

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