This article was produced by Nabarro LLP, which joined CMS on 1 May 2017.
Summary and implications
The Infrastructure Act (the Act) received Royal Assent on 12 February 2015. In enacting this legislation, the Government intends to bolster investment and increase the pace of delivery in key areas of infrastructure whilst guaranteeing long-term investment in the road network.
The Secretary of State has been granted the power to appoint strategic highways companies as government subsidiaries. As a result, in April 2015 Highways England will replace the Highways Agency and any related property, rights and liabilities may be transferred under the Act from the Secretary of State.
The required implementation of a Road Investment Strategy will also provide long-term funding for strategic road infrastructure projects.
Part 1, relating to highways, came into force on 12 February 2015 insofar as it confers power to make regulations and for all other purposes on 5 March 2015.
Key provisions
Appointment of strategic highways companies (sections 1–2)
Section 1 of the Act allows the Secretary of State to appoint a wholly government-owned company as a highways authority, and to confer to it duties and functions to operate as both a highways authority and a traffic and street authority.
The strategic highways company's appointment must specify the area, which may be the whole or any part of England, over which the company is appointed, and the highways in that area for which it will be the authority.
This company will foster a transparent relationship with the Government, with a robust funding settlement and clear performance contract, through the Road Investment Strategy.
Further to the enactment of this section, the Highways Agency will be replaced by the government subsidiary Highways England in April 2015 and will be led by Chief Executive Graham Dalton.
Governance and funding (sections 9–17)
The Secretary of State may provide financial assistance in such form and terms as it deems appropriate to a strategic highways company, for the purpose of any of its functions, or to any other person, for the promotion or improvement of transport services by land in England. The key difference is that budgets will now be set for five-year spending periods, during which they cannot be changed by the Government.
It will be the Government’s responsibility to set the direction and vision for the future strategic road network and, in doing so, set targets for Highways England to achieve those aims. It will be the company’s responsibility to deliver these and it will be held accountable for any failure.
The role of watchdog will be awarded to the Passengers' Council, which will promote the interests of road users.
The role of monitor will be undertaken by the Office of Rail Regulation, which will publish reports and advice in relation to the performance of Highways England.
Ownership of highways (sections 15–16)
The Act permits the transfer of property, rights and liabilities from the Secretary of State to the strategic highways company and enables the Treasury to make provision for such transfers to be "tax neutral".
Schedule 3 of the Act details the mechanics of transfer schemes and provides for the continuity of employment rights for employees of the transferor and compensation rights for third parties.
Road Investment Strategy (RIS) (section 3)
The Act outlines that the Secretary of State must set an RIS, or may vary any existing RIS.
The RIS must specify the objectives to be achieved by the company during the period to which it relates, and detail the financial resources to be provided by the Secretary of State for the purpose of achieving its objectives.
The Government has already launched their RIS, which outlines how £15.2bn will be invested in strategic roads between now and 2021.
The recent appointment of SMEs to the collaborative delivery framework means that activity to refine delivery of the RIS is already underway, and is intended to proceed swiftly.
The first large scheme to be implemented will be the £1.5bn A14 Cambridge to Huntingdon project, with design contracts to be awarded in March 2015 and works to begin in 18 months.
