The pothole crisis is costing £14.4 billion a year in economic damage in England alone, says CEBR

Potholes and other defects on the road network in England is costing the economy £14.4 billion, according to research by the Centre for Economics and Business Research (CEBR).

The think-tank has for the first time calculated the overall cost to the economy of pothole-related vehicle damage as well as accidents and emission levels.

The report said: “The RAC’s annual pothole report was released last week and confirmed that their ‘Pothole Index’ – the risk of a driver breaking down as a result of a pothole compared with the 2006 base – had risen from 1.60 in 2022 to 1.69 in 2023

“The crisis seems to be mainly caused by reduced spending on road maintenance. English local authorities’ spending on ‘routine maintenance’ fell in real terms from £1,756 million in the financial year ending in 2006 to £1,276 million in that ending in 2023, a fall of 27.3%. Interestingly, consistent with a trend in many parts of the public services, so-called spending on ‘Highways Maintenance Policy, Planning & Strategy’ (ie local authority staff) rose by 28.2% over the same period.”

Despite the increased number of potholes, the number of them mended in England and Wales has fallen from 1.7 million in 2022 to 1.4 million in 2023.

The economic damage done by potholes is in three areas: damage to vehicles, accidents and reduced speeds, due to road users having to drive more slowly or due to congestion that is pothole related, said CEBR.

“KwikFit prepare an annual Pothole Impact Tracker which estimates the annual cost in damage to vehicles in 2023 as £1.49 billion in the latest report released in the past week. This estimate seems consistent with data from AA and RAC on pothole related damage for their service users,” said CEBR.

According to its evidence, there is also data showing that between 2018 and 2022 451 people were killed or seriously injured because of potholes, of whom just under half were cyclists.

Data from India shows an even bigger impact on accidents suggesting that as the UK’s road conditions get closer to those in emerging economies, the impact on accidents will rise.

Applying official valuations to the damage from accidents and scaling up from the 2020 estimate suggests a likely human cost of £0.2 billion per annum from pothole related accidents, deaths and injuries, said CEBR.

In addition local authorities in England have paid out £22.7 million in compensation for pothole related damage to vehicles, said its research.

The RAC data says that there are six potholes per mile for the million estimated potholes in England. As potholes tend to be clustered rather than evenly distributed, our estimates assume that this means  20% of segments of non-motorway road are impacted by potholes. Using the DfT webtag values of time, this implies that nearly 1.3 billion hours are added to travel time because of potholes costing £12.7 billion using a weighted average cost of time. This estimate excludes time lost from added congestion and from delayed freight, said CEBR.

In addition, emissions are boosted by cars slowing down and speeding up. In total this study suggests that emissions are about 0.5 tonnes of CO2 higher because of potholes. Using a shadow price for CO2 emissions of £50 this gives a cost range of these higher emissions of £25 million.


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