King's Speech 2026: Highways (Financing) Bill

Highways (Financing) Bill

“Legislation will be introduced to… enable roads to be built at pace, including the
Lower Thames Crossing;”

● A strong transport network is essential for economic growth. It allows freight
to run smoothly, helps businesses run more easily, and gives people better
access to jobs, education, and wider opportunities. Improving vital road
infrastructure is an important part of strengthening the country’s economy, as
well as delivering safer and more reliable journeys for people.

● The Highways (Financing) Bill will enable a new financing approach to fund
large-scale road schemes, supporting the Government’s commitment to
deliver a modern transport network that helps people get to where they need
to more easily and safely. The Bill enables the delivery of schemes through
private investment, reducing the financial burden on taxpayers while ensuring
strong regulatory oversight to protect the interests of users.

● The Government is already delivering on improving the road network through
investing £27 billion to make everyday journeys on motorways and major A
roads safer, smoother, and more reliable for the people and businesses that
depend on them. A record £8.4 billion of this will be invested in renewing
ageing assets across the network, strengthening the performance and
resilience of the network through better road surfaces, clearer signs and
modernised roadside technology. The Government is also investing a record
£7.3 billion over the next four years to repair and renew local roads and fix
potholes.

What does the Bill do?

● The Highways (Financing) Bill will introduce a new Regulated Asset
Base (RAB) funding model to unlock greater levels of private capital
investment in road infrastructure. This will supplement the work already
done by National Highways in England to maintain and increase road capacity
and improve the road network to help people travel around more easily.

● The Bill will:

○ Introduce a licence regime to allow private companies, as licence
holders, to deliver key road schemes to improve the road network. The

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 Bill will set out the powers and responsibilities of the licence holders.

○ Name an independent regulator to provide strong oversight of
licence holders, to ensure that the infrastructure built under this model
remains well maintained, efficiently managed, and provided at a fair
and proportionate cost to users.

○ Introduce backstop measures to protect vital publicly used assets
managed under the model, helping ensure that the roads remain open
even if the private company fails.

● The RAB funding model will support the delivery of vital road infrastructure
projects across England in future. The Government expects that the Lower
Thames Crossing will be the first road scheme to use this model.

Territorial extent and application

● The Bill will extend to England and Wales, and apply to England only.

Key facts

● Delivering road schemes effectively and affordably is essential for the
UK’s future economic prospects and to help people get around more
easily. Over 85 per cent of passenger journey kilometres are made on roads,
as well as around 80 per cent of freight journeys.

● The RAB model that the Bill will deliver offers a long-established way of
financing major infrastructure in England. It has been successfully used in
sectors like energy and aviation. Most recently, it has been used on projects
such as the Thames Tideway Tunnel and the Sizewell C nuclear project.
Applying the lessons learned from those projects will enable the model to
work even better in the roads sector.

● By establishing an independent regulator as part of the RAB model, the
Government can ensure transparency in operations, clear performance
standards, and protection for users. If the regulated company does not
meet the standards required, the regulator can take enforcement actions – for
example by issuing the company with penalties or ultimately by revoking its
licence to operate the road.

● The Chief Executive of Logistics UK, Ben Fletcher, said that “…A reliable
road network is critical for the UK’s logistics sector and the nation’s economic
prosperity, with delays and costs caused by poor infrastructure felt by
businesses and consumers alike. It is estimated that every £1 invested in the

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 Strategic Road Network returns over £2 to society, and a reliable road
network is also critical for increasing the resilience of the UK’s supply chain by
enabling better connectivity with all other modes of freight transport.”

● The multinational energy company, Iberdrola, states that “The RAB model
offers stability and predictability: investors know they will be able to recover
their investment over time, while consumers benefit from tariffs controlled by
the regulator. This balance makes the RAB an effective tool for attracting
private capital to long-term strategic projects, reducing perceived risk and
therefore the cost of financing.”

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