Motorists provide the Treasury with over £50 billion every year in taxation yet only £2 billion of that is invested into maintaining the local road network. The impact of the lack of investment is a deteriorating road network that costs motorists a further £1.7 billion a year in repair bills due to the damage caused by potholes.
“The amount of taxation paid by motorists dwarfs the amount spent on local road maintenance and then they spend almost another £2 billion on repairing the vehicle damage caused by the road network that they are funding. Motorists have long felt that they are ‘cash cows’ but these figures show that they are being ripped-off”, said Howard Robinson, Chief Executive of the Road Surface Treatments Association (RSTA).
According to the RAC Foundation, the £50 billion motorists’ tax bill includes a combination of Vehicle Excise Duty and Fuel Duty – some £6 billion and £28 billion was raised in 2016 – plus £12.2 billion on buying, running and using their vehicles (£3.84 billion of VAT on vehicle purchases, £5.64 billion of VAT of fuels and £2.72 billion of VAT raised through road users buying other motoring-related goods and services. In addition, £3.7 billion is raised by motorists being taxed for the use of company cars and the car insurance premium tax raises an annual £560 million a year.
Despite receiving this substantial tax income, the government only spends a fraction of that amount in ensuring that the local road network is in good condition. The lack of investment means that the latest Asphalt Industry Alliance ALARM survey reports that one-in-five roads could structurally fail within the next five years and that an immediate £9.3 billion is needed to bring the local road network up to a satisfactory condition.
The impact of deteriorating road surfaces is underlined by a new survey from WhoCanFixMyCar.com that calculated drivers spend £1.7 billion on vehicle repairs caused by potholes.
RSTA is calling for a number of actions to address the situation. These include allowing all local roads to receive funds from Vehicle Excise Duty. Currently, the monies raised are only available for motorways and A roads. Inject £1 billion a year to address the £9.3 billion backlog of local road pothole repairs by investing just 2p a litre from the existing fuel duty. Furthermore, local highway budgets should be ring-fenced. Starved of funding, by 2020 local councils will spend 60p in every £1 raised by council tax on social care leaving less to fund essential road maintenance.