IN Brief:
- The Government is reviewing roads capital spending as part of a wider reallocation toward defence investment.
- The A38 Derby Junctions and A46 Newark Bypass schemes are among the projects facing uncertainty.
- The review adds pressure to the RIS3 pipeline and regional highways delivery planning.
The Department for Transport is facing renewed scrutiny over the highways pipeline after roads funding was identified for cuts as part of a wider reallocation of government capital budgets toward defence investment.
Treasury documents have indicated that around £700m of roads funding is at risk, with the A38 Derby Junctions and A46 Newark Bypass schemes among the first projects affected as the third Road Investment Strategy is reviewed.
The Government has also said that limited reductions to as-yet-uncommitted roads funding will be explored. The move follows the Prime Minister’s statement that some capital projects in areas such as roads and energy would no longer proceed as planned because they were considered less immediately vital than the defence spending uplift.
The A46 Newark Bypass has already been placed under uncertainty after National Highways cancelled Skanska’s contract to advance the project. The scheme has long been viewed as strategically important for the East Midlands, targeting a known bottleneck on a corridor linking the A1 and M1.
The A38 Derby Junctions scheme would involve major junction upgrades, including grade separation and carriageway improvements intended to reduce congestion on one of Derby’s busiest routes. Both schemes have significance beyond local road users because they affect freight movement, regional productivity, construction workload, and long-term development capacity.
Pipeline reliability is the immediate commercial concern. Road schemes require long lead times across design, environmental assessment, land, planning, procurement, traffic management, utilities, and stakeholder engagement. When funding changes late in the process, sunk bid costs and mobilisation planning can become wasted effort, while specialist capacity may move to other sectors.
The review also comes as infrastructure costs continue to rise. Civil engineering tender prices are forecast to rise through to 2030, with energy, materials, labour, and demand from electricity and rail work all shaping the market. Delaying road schemes may ease short-term capital pressure, but it can increase future cost if work later returns to market under tighter capacity conditions.
Sequencing creates another risk. Road upgrades are often linked to housing growth, logistics development, regeneration, industrial land, and wider regional transport plans. Cancelling or delaying highway capacity can slow development, constrain local plans, and increase uncertainty for investors planning around transport improvements.
The East Midlands reaction reflects that wider concern. Local political pressure around the A46 has focused on the scheme’s strategic value and the frustration caused by renewed uncertainty after years of planning. For regional authorities, the issue is not only the loss of a road project but the erosion of confidence that promised infrastructure will arrive when needed.
The RIS3 review will also be watched by suppliers across the highways market. Surfacing contractors, structures specialists, traffic technology providers, earthworks businesses, drainage contractors, temporary works suppliers, plant hire companies, and consultants all depend on a visible pipeline. If schemes are cut quickly without replacement work, the effect will spread through the supply chain.
Defence investment is rising because government has judged the security environment to be more demanding, while roads investment is being reduced because capital budgets are finite. Infrastructure delivery, however, works best when long-term strategies are stable enough for industry to plan. Shifting funds between priorities may be politically necessary, but the construction consequences are practical and immediate.
The industry has already seen the effect of unstable major project decision-making in rail, where uncertainty around HS2 and Northern Powerhouse Rail has weakened confidence in long-term delivery planning. Highways may now face a similar credibility test if schemes that appeared to be advancing are slowed, rescoped, or stopped.
The A38 and A46 are the clearest warning signs. Further detail will be needed on which roads projects remain committed, which are under review, and how National Highways will manage contracts, procurement, and supply-chain communication. Without that clarity, contractors will be left pricing not only construction risk but political risk as well.
