Councils are planning to axe millions of pounds of road improvements because of rising costs and lack of funds, according to new research.

The County Councils Network (CCN) is calling for an extra £500m of new capital funding in the forthcoming March budget to plug the spending gap.

A survey by the network found 85% of local authorities plan to reduce roads maintenance next year while scrapping or reviewing major highways projects.

The research shows that inflation is set to add at least £514m to roads and infrastructure budgets in county areas this year and next while costs have risen by an average of up to 25%.

Capital funding has been £400m lower in each of the last two years despite a pledge by the Government to invest an additional £500m in road improvements each year, CCN says, and rural schemes have been hardest hit.

Significant road projects reviewed or reconsidered in county areas include parts of the £67m North Devon Link Road and proposals for a new bypass on the A39 between the M5 and Clarks Village in Somerset which have been cut by the Department for Transport.

Tim Oliver, CCN chairman and leader of Surrey County Council, said: ’We understand the public finances are tight, but county roads are the arteries of England’s economy and council investment plans are vital to supporting local growth.

‘This is why we are calling on the Chancellor to provide at least £500m additional funding for roads maintenance.

‘This will allow us to get shovels in the ground for deferred schemes to help get our economy moving.’

The Local Government Association (LGA) also today called for £130m to fix four million potholes next year.