Closed consultation

Street works: fines and lane rental surplus funds

Published 15 January 2024

This was published under the 2022 to 2024 Sunak Conservative government

Applies to England

Executive summary

Introduction

On 2 October 2023, government announced its Plan for drivers. In support of smoother journeys for drivers, measures were included to help fix roads faster and encourage efficient street works.

There were 2.2 million street and road works carried out in England in 2022 to 2023. These can cause significant disruption to people’s journeys and congestion, which we estimate costs the economy around £4 billion. Street works are carried out by utility companies (for example, water, gas, electricity and telecommunications, which are also known as statutory undertakers) to install, repair or maintain the vital services on which we all rely. Road works are carried out by highway authorities to maintain the roads or, for example, to install cycle or bus lanes. 

The government has been working across the sector in recent years on a range of measures to help ensure that works are planned, managed and coordinated as effectively as they can be to improve consistency and communication across the sector and to make accurate and up-to-date information available to road users.

Our work is focused on ensuring that the most modern and effective methods possible are being used by highway authorities, utility companies and their contractors to plan and manage works. This is not just to minimise the impact that works have on congestion, but to ensure that our systems:

• are fit for the challenges of the future, including the digital transport agenda
• support innovation
• are able to deal with the rising demands for transport services and for utility infrastructure

Recent government initiatives have included:

Introduction of Street Manager

Since July 2020, the transformational Street Manager digital service has been used by every utility company, highway authority and their contractors in England to plan and manage road works. Real-time data on live and planned works is also now being streamed.

Highway authorities operating permit schemes

Almost every highway authority now operates a permit scheme. These allow for the proactive planning and management of works and have been proven to reduce the impacts of works on congestion. There should now be one set of rules, consistently applied across the country, through Street Manager.

New lane rental schemes

Approving new lane rental schemes, which allow a highway authority to charge up to £2,500 per day for works on the busiest roads at the busiest times, reduces the impact of works on congestion. Schemes are in operation on the Transport for London (TfL) network in London and in Kent, Surrey and West Sussex. Other schemes are in development.

Performance-based inspections

The introduction in April 2023 of performance-based inspections means those responsible for defective reinstatements or poor safety compliance are inspected more than those who do comply and have to pay for these additional inspections. It also means reinstatements that fail standards are identified earlier and repaired. This should lead to fewer potholes caused by utility street works.

Timely notices for stopping and starting works

In 2020, we required notices to be sent within 2 hours of works starting or stopping on weekdays and, in April 2023, we introduced the same requirement for notices at weekends and from highway authorities for their works. 

This means that up-to-date and timely information on when works are in place or when they have ended is included for each day of the week in the open data on live and planned works that is streamed via Street Manager.

This consultation presents a series of additional reforms to regulations that include:

• requiring at least 50% of any surplus lane rental funds to be spent on repairing potholes
• raising the level of fixed penalty notices (FPNs) that can be issued for 5 street works offences
• allowing overrun charges to apply at weekends and bank holidays

These proposals would involve amending the following secondary legislation:

• the Street Works (Charges for Occupation of the Highway) (England) Regulations 2012 – the 2012 lane rental regulations
• the Street Works (Fixed Penalty) (England) Regulations 2007 – the 2007 FPN regulations
• The Traffic Management Permit Scheme (England) Regulations 2007 as amended – the 2007 permit regulations
• the Street Works (Charges for Unreasonably Prolonged Occupation of the Highway) (England) Regulations 2009 – the 2009 charges regulations

Lane rental surplus funds

The current situation

A lane rental scheme allows a highway authority to charge up to £2,500 per day for works on the busiest roads at the busiest times. The relevant legislation is section 74A of the New Roads and Street Works Act 1991 and the 2012 lane rental regulations. Schemes need to be approved by the Secretary of State for Transport. The Department for Transport (DfT) publishes guidance for authorities on setting up and gaining approval for lane rental schemes.

There are 4 schemes currently in operation. One covers 69% of the TfL London network, which makes up around 5% of the network in London overall. The 3 remaining schemes cover between 5% and 7% of the networks in Kent, Surrey and West Sussex. 

Other authorities are developing similar schemes, as the current ones have proven effective at reducing the impact of works on the busiest roads. DfT is keen to see more schemes in operation.

Charges apply to works promoted by both utility companies and highway authorities. They incentivise those works promoters to, for example, move the works, carry them out at less busy times and carry out joint works with other promoters. 

Around 95% of charges are avoided by works promoters taking this action. If the charge cannot be avoided, then schemes provide an incentive to complete the works as quickly as possible. Schemes also encourage discounted lane rental charges for major projects and collaborative works.

Regulations 7(1) and 7(2) of the 2012 lane rental regulations provide that an authority:

• may deduct from charges received from undertakers pursuant to these regulations, its reasonable costs of operating and evaluating the effectiveness of the scheme under which they are paid (regulation 7(1))

• must apply the net proceeds for purposes intended to reduce the disruption and other adverse effects caused by street works (regulation 7(2))

Each scheme has governance arrangements and a board in place that will decide how surplus funds are spent. DfT guidance states that projects could include, for example:

• investment in innovation and developing new products or disruption-saving techniques
• trials of new techniques and products
• installing “pipe subways” or ducting that enable apparatus to be accessed more easily and without causing disruption to traffic
• measures to improve the quality or accessibility of records about the location of underground pipes, wires, and other apparatus
• measures to help abate noise, pollution or safety hazards arising as a result of works
• repairing potholes caused by utility street works
• implementing extraordinary measures to mitigate congestion caused by works, especially major works projects
• for surplus funds to be used for either capital or revenue projects

The guidance goes on to say that surplus revenue should not be used to:

• provide for training of the authority staff as this will already be provided for by a permit scheme and also be required to deliver an authority’s network management duty
• repair potholes caused by general wear and tear or, for example, bad weather.

Surplus revenue can, however, be used for trialling new techniques that may take less time and which, in turn, reduce the disruption caused by highway works.

Proposed amendments to legislation

We know that the existing schemes build up surplus funds and can sometimes find it difficult to find projects to fund. The more lane rental schemes that are set up in the coming years, the more difficult this may become. At the same time, we know that funding is needed for road maintenance and repairing potholes, whatever the cause of these. 

The government is investing in road maintenance, for example, in the spring 2023 Budget, the Chancellor confirmed an additional £200 million to fix potholes and improve our local road networks and, in November 2023, £8.3 billion of redirected HS2 funding for local authorities to resurface and repair local roads. But additional funding will always be welcomed by authorities and the travelling public.

As we have noted above, the main aim of lane rental schemes is to encourage those carrying out works to avoid charges by, for example, working at different times or in different locations and reducing congestion on the busiest roads at the busiest times. However, this is not always possible, so surplus funds are available. The government, therefore, wants to consider whether it would be better for some of these surplus funds to be put to use in a way that will benefit motorists and road users.

We propose amending the 2012 lane rental regulations to require authorities to spend at least 50% of any surplus lane rental funds on repairing potholes, whatever the cause. We know that existing schemes have built up surplus funds and, based on an extrapolation of these, and if all English highway authorities adopted a lane rental scheme, we estimate this could represent up to an additional £107.5 million over 10 years for repairing potholes. This assessment is, however, based on several assumptions. 

This will make an appreciable difference to those areas with lane rental schemes and would mean that the authority operating the scheme could repair more potholes on its network. Setting the level at 50% will mean that funds are also still available for innovation projects and to mitigate the effects of works. Utility companies would not be paying any more than they currently do in lane rental charges and charges can still be avoided by, for example, carrying out works at different times or different locations. It would simply mean that at least 50% of surplus funds are spent on potholes rather than something else. Governance groups would remain in place to oversee the operation of the funds.

We believe the amendment would deliver the following benefits:

• highway authorities contribute to surplus funds, so it would mean a percentage of the lane rental charges they pay is recycled into repairing the local road network
• this, in turn, might encourage more authorities to set up and operate schemes, which will benefit road users and reduce congestion on the busiest roads at the busiest times
• more potholes will be repaired, helping to create smoother journeys and reducing any damage to road users including cyclists

It could, however, also mean that:

• less money is available for new innovations in techniques and ways of working, although other innovation funds are available and some existing schemes do not receive enough bids
• charges from utility companies will be spent on repairing potholes caused by, for example, bad weather

Question

Do you support or oppose our proposal that a minimum 50% of surplus lane rental funds are spent, by highway authorities, on repairing potholes?

Fixed penalty notices

The current situation

Schedule 4A of the New Roads and Street Works Act (NRSWA) sets out the criminal offences relating to street works that can be dealt with through fixed penalty notices (FPNs). This consultation concerns 5 of those offences, as set out in Table 1. The amount payable is set out in the 2007 FPN regulations as amended. They were last set in 2007.

An FPN gives a utility company the opportunity to discharge any criminal liability for an offence by paying a penalty. This allows for the resolution of minor infringements without resorting to taking the matter to the magistrates’ court, which can both take time and involve administration costs. Section 95A and schedules 4A and 4B of NRSWA provide that certain offences under part 3 of NRSWA are fixed penalty offences.

DfT provides advice on FPNs in statutory guidance – the code of practice for the co-ordination of street and road works.

FPNs can be issued for the following offences and must be issued via Street Manager.

Table 1: five criminal offences relating to street works that can be dealt with through FPNs

Offence	Offence level*	Brief description	Duties and obligations
An offence under s70(6) NRSWA consisting of a failure to comply with subsection (3) or (4A)	4 (maximum fine of £2,500)	Failure to comply with requirements to give notice of completion of reinstatement	Section 70(1) imposes a general duty on the undertaker to reinstate the street. The undertaker must, within 10 working days from the date on which the reinstatement is completed give notice, containing the prescribed information, to the authority of that completion.
An offence created by regulations made under s.74(7B) NRSWA	4 (maximum fine of £2,500)	Failure to give a notice required by regulations under s.74 (charge for occupation of the highway where works unreasonably delayed)	The undertaker must provide the appropriate works start and stop notifications, under section 74, as per the 2009 charges regulations. That is, within 2 hours of works starting and ending between 8am and 4:30pm. For works starting and ending at other times, the notifications must be sent by either 10am the same or the following day. Note that FPNs cannot be issued for late submission of works’ start or stop notices at weekends.
An offence created by regulations made under s74A (11) NRSWA	4 (maximum fine of £2,500)	Failure to give a notice required by regulations under s.74 (charge determined by reference to the duration of works)	An undertaker executing street works in a highway, to which the 2012 lane rental regulations apply (that is, lane rental schemes), must, not later than the end of the day following the day on which the works begin, give the approved authority an “actual start of works notice”. This should confirm the start date (and/or time) and specify by reference to the national street gazetteer, the street or streets in which the works are to be carried out.
An offence under regulation 19 of the 2007 permit regulations as amended	5 (unlimited fine)	Working without a required permit on a street covered by a permit scheme	It is an offence for a statutory undertaker or a person contracted to act on its behalf to undertake specified works in a specified street without a permit, except to the extent that a permit scheme provides that this requirement does not apply.
An offence under regulation 20 of the 2007 permit regulations as amended	4 (maximum fine of £2,500)	Breach of permit conditions	It is an offence for a statutory undertaker or a person contracted to act on his behalf to breach any permit condition agreed with the authority during the permit approval process.

Note: *offence level on the standard scale. Other FPNs are available for sections 54, 55 and 57 of NRSWA but these relate to the system of notices that was in use before permits were introduced. Permit schemes are now operational in almost every highway authority area.

These offences mainly refer to notification failures. For permit schemes, the offences are set out in regulation 19 (working without a permit) and regulation 20 (breach of permit conditions) of the 2007 permit regulations. Issue or payment of an FPN does not exempt an offender from other prosecutions or charges under NRSWA (for example, section 74 overrun charges).

All these offences can be prosecuted in a magistrates’ court. It is for the relevant authority to act on offences as they see fit. The authority retains the power to take an alleged offender to the magistrates’ courts instead of offering a FPN.

The amount of penalty charges payable for FPN offences is set out in the 2007 FPN regulations and the 2007 permit regulations. The period for payment is 36 calendar days, beginning with the day on which the FPN is given. A discounted charge will apply if payment is made within 29 calendar days, beginning with the day on which the FPN is given.

Table 2: FPN charges payable

Offence	Full FPN charge	Discounted FPN charge
Late notification of reinstatements and works start and stop notices (NRSWA sections 70, 74 or 74A)	£120	£80
Working without a permit (regulation 19)	£500	£300
Breach of permit conditions (regulation 20)	£120	£80

Data from Street Manager shows how many FPNs have been issued in the past 2 years. 

Table 3: number of FPNs issued in 2021 to 2022

Types of FPN	Electricity	Percentage of works	Gas	Percentage of works	Telecoms	Percentage of works	Water	Percentage of works	Grand total
Late notification of reinstatements	2,017	1	5,730	5	18,677	3	7,037	1	33,461
Late start and stop notices	6,447	4	10,302	9	28,579	5	21,881	4	67,209
Working without a permit	1,651	1	1,236	1	3,320	1	4,221	1	10,428
Breaching a permit condition	5,933	4	7,173	7	11,564	2	16,625	3	41,295
Grand total	16,048		24,441		62,140		49,764		152,393

Table 3: number of FPNs issued in 2022 to 2023

Types of FPN	Electricity	Percentage of works	Gas	Percentage of works	Telecoms	Percentage of works	Water	Percentage of works	Grand total
Late notification of reinstatements	2,348	2	4,120	4	23,848	3	6,861	1	37,177
Late start and stop notices	6,852	5	6,884	7	26,696	4	24,386	4	64,818
Working without a permit	1,736	1	1,464	1	4,264	1	4,675	1	12,139
Breaching a permit condition	7,081	5	7,415	7	15,884	2	18,080	3	48,460
Grand total	18,017		19,883		70,692		54,002		162,594

We can see that compliance is getting slightly worse in the electricity sector. The gas sector receives the most FPNs as a percentage of total works. Compliance in the telecoms and water sectors are pretty static. Most FPNs are issued for late notifications of works start and stop notices and beaches of permit conditions which can, for example, set the times of the day when works can take place.

Proposed amendments to legislation

The amount of the FPN charge has not changed since 2007. The government wants to raise the limit to increase the level of deterrent it provides and to improve compliance. Working without a permit and breaching permit conditions are serious offences that can mean:

• disruption for road users
• increased congestion
• a risk to safety

Many authorities report that utilities find it easier to pay a discounted FPN charge as a ‘cost of doing business’, rather than ensuring their works comply with regulations.

Prompt notification of works start and stop notices is important to ensure that up-to-date information is available to road users to reduce congestion and the impact of works on, for example, buses. Prompt notification of reinstatements means that inspections can then be carried out to ensure compliance with safety and technical standards, and any defects can be repaired promptly to ensure they do not increase the number of potholes.

NRSWA places a limit on the maximum amount of the FPN of 30% of the maximum fine for that offence, so that would mean a maximum fine of £750 for 4 of the offences. Discounted amounts cannot exceed 25% of the maximum fine, which totals £625 for 4 of the offences. Fines are unlimited for working without a permit.

If we look at what the level of FPN might be if it had been linked to the level of inflation (but not including the high levels that have been in place up until winter 2023), the FPN fine now would have risen from:

• £500 to £702
• £300 to £421
• £120 to £168
• £80 to £112

We could round these figures out – option A – and have the new charges set at:

• £700
• £425
• £170
• £115

Option B would be to double FPN fines, to provide an even greater deterrent and incentivise compliance. So the new charges would be:

• £1,000
• £600
• £240
• £160

Questions

We are proposing 2 options for raising the amount of FPN charge that is payable. This would mean the charges relating to offences under NRSWA sections 70, 74 or 74A and charges relating to regulations 19 and 20 of the 2007 permit regulations would increase. 

Option A: fines would be raised in line with inflation (rounded up), which would mean FPNs of £170 full charge and £115 discounted charge for NWSRA offences and breaching permit conditions. FPNs would be £700 full charge and £425 discounted charge for working without a permit.  

Option B: fines would be doubled which would mean FPNs of £240 full charge and £160 discounted charge for NWSRA offences and breaching permit conditions. FPNs would be £1,000 full charge and £600 discounted charge for working without a permit. 

What is your preferred option, A or B?   

Please provide an explanation for your answer or suggest an alternative amount with an explanation of why you are proposing that alternative amount.

Overrun charges at weekends

The current situation

Under section 74 of NRSWA, authorities can charge utility companies for occupation of the highway where works are unreasonably prolonged. These are known as overrun charges. DfT provides more detailed advice on overrun charges in the co-ordination code of practice. Charges are invoiced and payable to the relevant authority.

The 2009 charges regulations as amended set out the amount of charge that is payable.

Table 4: charges in relation to works occupying the carriageway during the period of overrun

Item	Description of street	Amount (£) (each of first 3 days)	Amount (£) (each subsequent day)
1	Traffic sensitive street or protected street not in road category 2, 3 or 4	5,000	10,000
2	Other street not in road category 2, 3 or 4	2,500	2,500
3	Traffic sensitive street or protected street in road category 2	3,000	8,000
4	Other street in road category 2	2,000	2,000
5	Traffic sensitive street or protected street in road category 3 or 4	750	750
6	Other street in road category 3 or 4	250	250

Note: the road categories refer to the reinstatement categories set out in the Specification for the reinstatement of openings in the highway (SROH). The criteria for designating streets as traffic sensitive or protected are set out in the Street Works (Registers, Notices, Directions and Designations) (England) Regulations 2007 as amended. All special roads as defined in the Highways Act 1980 (for example, motorways) are protected streets.

Table 5: charges in relation to works outside the carriageway during the period of overrun

Item	Description of street	Amount (£) (each day)
1	Street not in road category 2, 3 or 4	2,500
2	Street in road category 2	2,000
3	Street in road category 3 or 4	250

The 2009 charges regulations state that overrun charges only apply on a working day –that is, a weekday. Overrun charges cannot be applied over weekends and bank holidays.

A highway authority may deduct from any charges received, the reasonable costs of operating the scheme. They can also use net charges to develop or implement policies to promote and encourage safe, integrated, efficient and economic transport facilities and services to, from and within their area.

Table 6: when works start and stop notices must be sent according to the regulations

Works start or stop within the period 00:00am through to 7:59am	Start notice received by 10:00am on the same day
Works start or stop within the period 8:00am through to 4:30pm	Start notice received within 2 hours
Works start or stop within the period 4:31pm through to 11:59pm	Start notice received by 10:00am on the next day

Works stop notices are used to calculate any period of overrun and are one of the ways in which an overrun is identified. FPNs can be issued for late submission of both works start and stop notices on a weekday. The 2009 charges regulations were amended in April 2023 to require works start and stop notices at weekends – before then, they could be submitted by 10.00am the next working day. 

FPNs are not currently available for late submission at weekends, since we wanted to allow time for utility companies to ensure they complied with the new requirements.

A recent review of data from Street Manager shows that most organisations are submitting start and stop notices at weekends, but the vast majority were not submitted within the times set out above and in regulations. 

Many weekend start and stop notices are submitted on the next working day, which might be 3 days after the work has begun or ended over a bank holiday weekend. Or some are submitted many days later. This could be because systems are still being updated, but it does show that hardly any utility companies are currently complying with the rules.

Proposed amendments to legislation

We propose amending the 2009 charges regulations to allow overrun charges to be applied at weekends. Our roads are often just as busy on weekends as they are on weekdays. Application of charges at weekends will help to ensure compliance with requirements to complete the necessary interim or permanent reinstatement and clear the site in line with the duration allowed by the permit or the reasonable period. 

Further guidance on how the reasonable period is calculated for permits is set out in the DfT’s permit scheme guidance.

This would remove a potential loophole and could discourage any adverse behaviour, which will help to reduce congestion at weekends.

The other requirements for overrun charges set out in the 2009 charges regulations and explained in the co-ordination code of practice would still apply. 

Given that works stop notices are used to calculate the overrun charges and are one of the ways in which an overrun is identified, and given that hardly any organisations are complying with the timings in regulations, we also want to consider applying FPNs to late submission of works start and stop notices at weekends. This would improve compliance and would ensure that they are submitted on time, as FPNs are usually the way in which compliance is enforced.

Utility companies should have had enough time – around a year – to amend systems by the time any regulatory amendments resulting from this consultation are made and come into force. Any FPNs would be at the higher rate if the decision is made to raise the levels as set out above in this consultation. That is option A, which would be £170 or a discounted rate of £115, or option B, which would be £240 or £160 for a discounted rate.

Questions

Do you support or oppose overrun charges, applied under section 74 of the New Roads and Street Works Act 1991, being applied at weekends?

Do you support or oppose overrun charges, applied under section 74 of the New Roads and Street Works Act 1991, being applied at bank holidays?

Do you support or oppose FPNs being available for late submission of works start and stop notices at weekends?

Do you support or oppose FPNs being available for late submission of works start and stop notices on bank holidays?

Full list of questions

These questions are listed here to give you an overview of what we are asking. You can find a link to the questionnaire in the Ways to respond section for this consultation.

Question 1

Do you support or oppose our proposal that a minimum 50% of surplus lane rental funds are spent, by highway authorities, on repairing potholes? If so, why?

Question 2

What are your preferred options for raising the amount of fixed penalty notice (FPN) charge that is payable? Option A or B, or would you prefer that FPN charges are not altered? Please provide an explanation for your reply.

Question 3

Do you support or oppose overrun charges, applied under section 74 of the New Roads and Street Works Act 1991, being applied at weekends?

Question 4

Do you support or oppose overrun charges, applied under section 74 of the New Roads and Street Works Act 1991, being applied at bank holidays?

Question 5

Do you support or oppose FPNs being available for late submission of works start and stop notices at weekends?

Question 6

Do you support or oppose FPNs being available for late submission of works start and stop notices on bank holidays?

Question 7

Any other comments?

How to respond

The consultation period will close on 11 March 2024 at 11:59pm. Please ensure your response reaches us before the closing date.

The easiest way to respond is via the online questionnaire. You can find a link to the questionnaire in the Ways to respond section for this consultation.

If you cannot respond online, there is also a downloadable form and an email and postal address.

When responding, state whether you are responding as an individual or representing the views of an organisation. If responding on behalf of a larger organisation, make it clear who the organisation represents and, where applicable, how the views of members were assembled.

We do not expect you to submit evidence or views in response to every question listed if not applicable.

If you have any suggestions for others who may wish to be involved in this process, contact us.

What happens next

A summary of responses, including the next steps, will be published when the government has decided the outcome.

If you have questions about this consultation, email streetmanager@dft.gov.uk.

Freedom of information

Information provided in response to this consultation, including personal information, may be subject to publication or disclosure in accordance with the Freedom of Information Act 2000 (FOIA) or the Environmental Information Regulations 2004.

If you want the information that you provide to be treated as confidential, please be aware that, under the FOIA, there is a statutory Code of Practice with which public authorities must comply and which deals, amongst other things, with obligations of confidence.

In view of this, it would be helpful if you could explain to us why you regard the information you have provided as confidential. If we receive a request for disclosure of the information, we will take full account of your explanation, but we cannot give an assurance that confidentiality can be maintained in all circumstances. An automatic confidentiality disclaimer generated by your IT system will not, of itself, be regarded as binding on DfT.

DfT will process your personal data in accordance with the Data Protection Act (DPA) and in the majority of circumstances this will mean that your personal data will not be disclosed to third parties.

Confidentiality and data protection

DfT is carrying out this consultation to gather your views on proposals relating to works and how they are managed by utility companies and highway authorities. This consultation and the processing of personal data that it entails is necessary for the exercise of our functions as a government department. If your answers contain any information that allows you to be identified, DfT will, under data protection law, be the Controller for this information.

As part of this consultation, we’re asking for your name and email address. This is in case we need to ask you follow-up questions about any of your responses. You do not have to give us this personal information. If you do provide it, we will use it only for the purpose of asking follow-up questions. Responses will be held for 5 years.

DfT’s privacy policy has more information about your rights in relation to your personal data, how to complain and how to contact the Data Protection Officer.

Consultation principles

The consultation is being conducted in line with the government’s consultation principles.

If you have any comments about the consultation process, email consultation@dft.gov.uk or write to:

Consultation Coordinator
Department for Transport
Zone 1/29 Great Minster House
London, SW1P 4DR