National Highways has been criticised by watchdogs for frequent increases in the cost of its major road schemes, which can occur both before and after construction starts. Schemes can end up costing taxpayers millions – sometimes billions – more than when they were approved, calling into question the reliability of the company’s processes for assessing whether its schemes will provide value for money.
With the exception of 2025-26[1], the government-owned company works to a five-year “road investment strategy” (RIS), setting out the projects it will work on and their budgets. In a 2022 report on National Highways’ progress on the 2020-25 RIS, the National Audit Office reported that it had so far delivered less work than planned, “at a higher cost”[2].
Similarly, in 2023 the Transport Select Committee said the company had “overspent and underdelivered”[3].
In 2024, the company’s regulator, the Office of Rail and Road (ORR), estimated that the total forecast cost of enhancements started during the RIS was £29.9 billion, up by £6.3 billion (27%), despite the cancellation of new “Smart Motorway” schemes. The largest forecast cost increase was for the Lower Thames Crossing, up by £2.3 billion (39%) to £8.3 billion[4].
The ORR cited higher than predicted inflation and “externally caused” delays to schemes but said factors within National Highways’ control had been a contributing factor.
Future schemes
M3 Junction 9
In March 2025 Transport Secretary Heidi Alexander announced that National Highways’ scheme at Junction 9 of the M3 near Winchester would go ahead[5]. Ironically, the scheme had seen a significant cost increase while it was supposedly being scrutinised under the Department for Transport’s (DfT) value for money review.
The DfT boasted that it would spend £290m of public money on the scheme but when National Highways was seeking approval it stated the cost was £215m including allowances for risk and inflation[6]. When it was granted planning consent in May 2024, National Highways was still saying it would cost £200m[7].
National Highways offered no explanation for this 35% price rise – before work has even started. There were no legal challenges for it to hide behind. Its webpage for the scheme concedes that it could cost even more, giving its price as £268 million to £322 million as of May 2025[8].
The Department for Transport has pitched the scheme as facilitating new homes but it works out at £145,000 for each of the 2,000 homes said to depend on it – a very expensive way of encouraging more housebuilding.
A66 Northern Trans-Pennine
Another National Highways scheme that has got more expensive even before work has started is the A66 Northern Trans-Penninemega-project, which involves upgrading multiple single carriageway sections between the M6 and A1(M) to dual carriageway.
It was initially said to cost £1bn in early 2022[9], then £1.3bn by the end of the year[10], and when the planning examination started National Highways admitted it had been given a “most-likely” cost estimate of £1,490m[11].
As of May 2025, the scheme is subject to the DfT’s capital spend review. It is officially poor value for money, with an adjusted benefit cost ratio of just 0.90[12] (and that’s including often spurious wider economic benefits), meaning that for every pound spent, there are only 90p of economic benefits.
Current schemes
A47 North Tuddenham to Easton
When applying for planning consent for the A47 North Tuddenham to Easton scheme, National Highways costed the project at £195.27 million[13]. However, a heavily redacted response to a FOI request for the Full Business Case in October 2024 showed the latest expected outturn cost is now £275 million, an increase of 41%[14].
M25 Junction 28
National Highways initially said its scheme at Junction 28 of the M25, where the motorway meets the A12, would cost “£50 million to £100 million” and gave an estimate of £79.8 million but in 2021 it awarded a contract worth £124 million to design and build the scheme[15]. The scheme’s webpage now gives the cost of the ongoing scheme as “£140 million to £170 million” – around double the original figure[16].
M27 Junctions 5-7
Resurfacing work between junctions 5 and 7 of the M27 in Hampshire was originally announced at a cost of £48 million[17] but the scheme’s webpage has been updated to give a new cost of £83 million – again nearly double the original estimate[18]. If National Highways had resurfaced this stretch of motorway when it was converting it to ‘Smart’ Motorway less than two years earlier (as local politicians urged), it would have saved money and spared local residents years of disruption.
Completed schemes
National Highways publishes Post Opening Project Evaluations (POPEs) of its major schemes[19], which include an update on their actual costs compared to their predicted costs.
An analysis of some of the most recent schemes shows that while a few have come in slightly under budget, most have cost significantly more than predicted.
The POPE reports give the cost in 2010 prices for comparison with predicted costs and the figures in the report. This means that although the differences between predicted and actual cost are in proportion, the actual cost – and any cost increases – will be higher.
The A160/A180 Port of Immingham improvement[20] was built at a cost of £78.1 million, which National Highways said was “slightly higher” than the anticipated cost of £71.0 million. It was in fact 10% over-budget.
The A45/A46 Tollbar End improvement[21] cost £90.4 million against a predicted cost of £79.2 million. The £11.2m overshoot was one-seventh (14%) of the anticipated cost.
The A43 Abthorpe roundabout improvements[22] saw a high cost increase for a relatively small scheme. It cost £7.98 million, which was 61% higher than the anticipated cost of £4.95 million. The benefits of the scheme were found to be significantly lower than promised, meaning that it provided “low” value for money, compared to the high value for money predicted.
The A21 Pembury to Tonbridge dualling project[23] saw a cost overrun of nearly £20m against its anticipated cost of £82.8 million, coming in at £102.5 million, a 24% increase. National Highways said this was “due to extra cost associated with clearing hazardous material found at several locations during ground works”.
It is unclear whether this tendency for schemes to often cost more than predicted is due to over-optimistic forecasting or overcharging by contractors – or both.
These costs are in addition to the extra costs to motorists from delays and using more fuel during construction, which National Highways does not review as part of the POPE process but have been shown to be significantly underestimated[24].
Scrapped schemes
Since the General Election, the Labour government has cancelled a number of National Highways’ planned road schemes, which it said were unaffordable, many of which had seen large cost increases.
In July 2024,Chancellor Rachel Reeves cancelled the scheme to dual the A303 through the Stonehenge World Heritage Site, placing only a part of it in a tunnel. In the 2017 Outline Business Case the central cost of the scheme was £1.6 billion[25]. By the time it was scrapped in July 2024 it was projected to cost £2.35 billion[26] (and that’s not including operational and maintenance costs of £8m per year). That’s a 47% increase in construction costs in just seven years.
Ministers also confirmed that the cancelled bypass on the A27 at Arundel was set to cost £630 million[27], more than double the original cost of £250 million[28], or a 152% increase.
In the October 2024 Budget, Ms Reeves scrapped more schemes, including the A1 Morpeth to Ellingham scheme. It was subsequently revealed that the projected cost of the scheme had risen from around £300 million to about £500 million[29], a 67% increase. Unfortunately, before the scheme was abandoned, nearly £70 million of public money had been spent on it, according to the BBC[30].
What’s the solution?
Given National Highways’ poor record on the estimating costs, many experts have questioned whether it should be costing schemes that it wants to develop as there is a real likelihood of optimism bias. At the very least its assumptions should be open to greater public scrutiny as these are the figures at the heart of the economic case, used to justify the scheme.
Perhaps more importantly, there is a question as to whether National Highways should be allowed to sign off on schemes less than £500m in value, without any involvement or scrutiny from DfT officials or ministers. Currently it is effectively allowed to mark its own homework, giving it little incentive to reduce costs or provide accurate cost estimates. Changing this might result in National Highways focusing on only delivering high value for money schemes.
In its 2023 report, the Transport Select Committee said that information on National Highways’ enhancements was “not accessible or transparent”[31]. MPs recommended that the government work with National Highways to introduce a “live” dashboard with information on each project’s progress and original and current costs. However, National Highways has yet to produce the recommended dashboard, and the dashboard published by the ORR does not provide cost information[32]. In 2024 TAN asked National Highways to supply it with the Full Business Cases of its road schemes, but it refused, claiming it was “manifestly unreasonable”. It’s time the rising costs of National Highways’ road schemes were brought out into the open.
[1] Interim Settlement: Investment and management of the strategic road network from April 2025 to March 2026
[2] Road enhancements: Progress with the second road investment strategy (2020 to 2025) – NAO press release
[3] Prioritise strategic road maintenance over new enhancements, Transport Committee tells DfT – Committees – UK Parliament
[4] Annual Assessment of National Highways’ performance: April 2023 to March 2024
[5] https://www.gov.uk/government/news/greenlight-for-290-million-improvements-to-m3-to-support-over-2000-homes-in-winchester
[6] M3 Junction 9 Funding Statement, National Highways, para 2.1.1, November 2022
[7] Green light for multi-million pound scheme to transform journeys at M3 junction 9 – National Highways
[8] M3 junction 9 improvements – National Highways
[9] Public play key role in refined £1bn plan to transform the A66 – GOV.UK
[10] A66 Northern Trans-Pennine Project update
[11] A66 Northern Trans-Pennine Project Funding Statement, para 2.1.1
[12] A66 Northern Trans-Pennine project accounting officer assessment (October 2022) – GOV.UK
[13] A47 North Tuddenham to Easton Funding Statement, National Highways, para 2.1.1
[14] Response to Freedom of Information request, National Highways, 1 October 2024
[15] Highways Magazine – GRAHAM signs £124m contract on M25 scheme as costs rise
[16] M25 junction 28 improvements – National Highways
[17] Highways Magazine – National Highways levels up surface on M27
[18] M27 junction 5 to 7 concrete overlay – National Highways
[19] Post Opening Project Evaluation (POPE) of major schemes – National Highways
[20] a160-port-of-immingham-five-year-post-opening-project-evaluation.pdf
[21] a45-tollbar-five-year-post-opening-project-evalution.pdf
[22] a43-abthorpe-five-year-post-opening-project-evaluation.pdf
[23] a21-tonbridge-five-year-post-opening-project-evaluation.pdf
[24] True cost of traffic delays from building major roads – Transport Action Network
[25] Answer to written question by Danny Kruger MP, 12 March 2024
[26] Written questions and answers – Written questions, answers and statements – UK Parliament
[27] Written questions and answers – Written questions, answers and statements – UK Parliament
[28] £250m Arundel bypass route revealed – GOV.UK
[29] Northumberland A1 dualling cancelled due to £500m costs – BBC News
[30] Cost of cancelled Northumberland A1 dualling rises to £68.4m – BBC News
[31] Strategic road investment – Transport Committee
[32] ORR RIS2 enhancements dashboard
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