William Eichler 14 April 2026

Councils risk losing funding under new pothole performance rules

Councils risk losing funding under new pothole performance rules image
Pothole © David Michael Bellis / Shutterstock.com.

Local highway authorities in England face losing up to a third of their roads funding if they cannot demonstrate it is being spent on road maintenance.

The Government has held back £525m of its £1.6bn local roads allocation, which councils will only receive if they meet new transparency requirements. These include publishing reports confirming all highways funding is spent solely on road maintenance, setting out long-term maintenance plans, and improving training for highways teams.

The measures follow the Government's recent red, amber and green ratings system for 154 local highway authorities, assessing road condition and spending effectiveness. The 13 councils rated red will receive £300,000 worth of expert planning support over two years to help improve performance.

Roads and Buses Minister, Simon Lightwood, said: ‘Potholes aren’t just an inconvenience — they cost drivers hundreds, if not more, every time they cause damage to a vehicle.

‘Fixing our roads is one of the most impactful things we can do to reduce the cost of owning and driving a car and we’re making sure every pound goes straight into doing exactly that.’

According to the latest Annual Local Authority Road Maintenance (ALARM) survey, local roads across England and Wales face a record £18.62bn repair backlog that would take 12 years to clear.

RAC head of policy, Simon Williams, said: ‘Ensuring money that is given to councils to improve their roads is actually spent on roads is critical, so the government’s focus on this will be welcomed by drivers.

‘And, while fixing dangerous potholes is vital, it’s also very positive to see councils being encouraged to carry out preventative maintenance work, which will stop potholes forming in the future.’

Interview: Chair of the Asphalt Industry Alliance (AIA), David Giles, talks to LocalGov about the importance of investing in local roads rather than just carrying out ‘reactive maintenance.’

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