What the bill changes
The Highways (Financing) Bill, published on 6 October, creates a new legal route for private-sector capital to finance selected strategic-road projects. It does not replace existing public delivery mechanisms. Instead, the government says the model is intended for a limited number of large-scale projects where private investment could help deliver infrastructure sooner or more effectively.
What is a regulated asset base model?
A regulated asset base, or RAB, model allows an infrastructure company to earn regulated revenues against an asset under a framework overseen by an independent regulator. The approach is designed to give investors more predictable long-term returns while placing limits and obligations on the company. In roads, the model could cover construction, operation, maintenance or improvement of a specified highway.
| Part of the model | What the bill provides |
|---|---|
| Independent regulator | Office of Rail and Road |
| Private participation | Licensed companies can finance and operate specified roads |
| Revenue mechanism | Regulated framework, including toll collection where applicable |
| Enforcement | ORR oversight and enforcement powers |
| Failure protection | Special administration regime |
| Toll technology | Barrierless charging enabled across tolled undertakings |
Why private capital is being added as an option
Large road schemes require heavy upfront capital and often compete with other public spending priorities. A private-finance route can move some initial financing off the immediate public-capital programme, but it does not make infrastructure free. Investors require a return, so the central policy question is whether the lifetime financing and operating cost is justified by earlier delivery, risk transfer or better asset management.
The Office of Rail and Road would regulate the schemes
The bill names the Office of Rail and Road as the independent regulator for infrastructure funded under the RAB model. ORR would oversee licences, monitor compliance and use enforcement powers where necessary. That regulatory layer is important because a privately financed strategic road could have monopoly characteristics: road users generally cannot choose a competing motorway once a route is built.
Private companies could become highway authorities for specified infrastructure
The framework allows licensed private companies to carry out functions connected with constructing, operating, maintaining or improving specified highways. The licence would define conditions and responsibilities, and the bill includes procedures for modification, revocation and transfer. This creates a formal legal structure rather than relying on a simple construction contract.
What happens if the licensed company fails?
The bill includes a special administration regime and restrictions on ordinary insolvency procedures. The objective is continuity: a strategic road cannot simply stop functioning because its operator is unable to pay its debts. Similar infrastructure regimes focus on keeping the service operating while financial ownership or management is restructured.
Barrierless tolling is a separate but important change
The bill also enables barrierless charging across all tolled undertakings. Instead of stopping at a toll booth, vehicles can be identified remotely and charged through digital payment systems. The government says this can support smoother journeys and reduce congestion and safety risks associated with toll plazas.
Does this mean the government is introducing tolls on every motorway?
No. The legislation creates a financing and licensing framework for specified projects and enables barrierless charging where tolling exists or is authorised. It does not turn the entire strategic-road network into a toll network. The government also says the RAB route is expected to apply only to a limited number of large schemes.
Why the M6 Toll is mentioned
Older tolled undertakings such as the M6 Toll are not currently able to adopt barrierless charging under their existing legal arrangements. The new measure would enable, but not require, such systems. That distinction matters: the bill provides legal capability, while individual operators and schemes would still need implementation decisions.
The questions taxpayers and road users should ask
- Which specific projects will use the RAB model
- What return investors are allowed to earn
- Who ultimately bears construction-cost overruns
- How toll levels would be set and reviewed
- How performance standards are enforced
- What happens if traffic volumes are below forecasts
- Whether financing costs beat conventional public borrowing
- How data and enforcement work under barrierless charging
How to judge whether the model works
Success should be measured over the full life of each project: delivery time, construction cost, financing cost, road availability, maintenance performance, safety, congestion and user charges. A project delivered earlier is not automatically better value if the financing premium is too high; equally, a lower-cost public route may not be superior if delays impose larger economic costs.
Bottom line
The Highways Financing Bill gives the UK another way to fund a small number of major road projects and creates a regulatory structure around private participation. The key issue will not be whether private capital is available, but whether each proposed scheme demonstrates better lifetime value, clear accountability and fair treatment of road users.