Research and Press

The pothole crisis is costing £14.7 billion a year in economic damage in England alone and £500 million in Kent alone

Updated full economic analysis of the impact of potholes in the UK evaluates the full cost in damage, accidents (especially to cyclists), time wasted and higher emissions says a study by Douglas McWilliams for FairFuel UK

Introduction

I first estimated the economic damage from the cost of potholes for Cebr, the economics consultancy which I founded, in April 2024. Because the crisis shows no signs of going away and interest continues to increase, I have updated the estimates I prepared a year ago for my regular blog and podcast, View from the Tent.

The estimated annual cost in 2023 was £14.4 billion; despite an increase in the number of potholes mended, the cost in 2024 has still managed to rise to £14.7 billion.

Anyone who drives or cycles will be aware that Britain’s pothole crisis is serious. Having completed the 2019 ‘Peking to Paris’ car rally from Beijing to Paris, my take is that our roads are now worse for potholes than anywhere on that rally apart from the Far West of China and Mongolia (where we had to drive across the Gobi desert where the unsurfaced tracks are even more boneshaking than British roads) and notably worse than in both Russia and Kazakhstan, let alone Western Europe.

Current progress with potholes

The RAC’s annual pothole report was released on 15 January 2025 and confirmed that their ‘Pothole Index’ – the risk of a driver breaking down as a result of a pothole compared with the 2006 base – fallen back from 1.69 in 2023 to 1.39 in 2024. But the fall appears to be only temporary. RAC also observed a 17% jump in pothole related breakdowns in the final quarter of 2024 over the previous quarter.

Although there is now a £1.6 billion fund for additional local spending on potholes announced in the October 2024 budget, this follows a period where 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. It appears that the amount spent rose in 2023/24 to £1,727 million but this figure remains an estimate.

Anecdotal evidence, however, suggests that part of the problem seems to be the use of cheap fillers by private contractors to fill potholes which ‘gets ripped out the first time a bus or a heavy lorry drives over it’. The private contractors can then get paid a second time to fill the pothole their own filler has created.

Despite the increased number of potholes, the number of potholes mended in England and Wales has fallen from 1.7 million in 2022 to 1.4 million in 2023. Tarmac have claim to have mended 2 million in 2024, which if consistent with previous figures suggests an improvement and (see below) is backed up by the ALARM survey.

The ALARM survey is an annual survey of potholes carried out by the Asphalt Industry Alliance.

The most recent ALARM survey makes two points: the money spent on filling potholes and the number of potholes filled have largely recovered on an annual basis from the huge cuts in spending during the Covid and post Covid era.

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Figure 1 from Page 9 of the ALARM survey shows that spending on potholes is back (in nominal terms) to its 2015 level. In real terms, using the ONS’s Construction Output Price Index for non housing repair and maintenance to deflate the figures, this equates to a fall of 20.9% over the period. The figure also shows the number of potholes filled, which has fallen 27.0% from the 2.7 million filled in 2014/15 to the 1.985 million filled in 2023/24.

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Figure 2 from the ALARM survey estimates the one off total catch up costs. Which continues to grow – this is partly inflation but more a reflection of the backlog over previous years and the additional damage that emerges when road surface problems are neglected.

What creates potholes?

Which vehicles cause damage to road surfaces? A recent article in the Daily Telegraph suggested that the Dutch tax on heavier cars was the main explanation of their less potholed roads Sadly this is fake news. While heavier vehicles do cause more road damage, the bulk of road damage is, not surprisingly, caused by buses and lorries, with vans making an increasing contribution.

The standard short cut for estimating the road damage done by a vehicle is to take the axle load (weight divided by number of axles on which it is spread) to the power of four.  This is called ‘the fourth power law’. In practice the extent of stops and starts is also important which is why buses and vans ‘punch above their weight’ in road damage.

A recent study has applied this theory to calculate the road impact factors for various categories of vehicles, multiplying the damage per vehicle by the number of vehicles. The study looks at the whole of Scotland and compares different methods of propulsion, noting the additional damage done by heavier vehicles, especially those using batteries. What is clear from Figure 3, though, is that for all methods of propulsion cars and motorcycles do not, even if powered by batteries, have a significant or even noticeable impact on road damage.

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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.

Economic costs of potholes

KwikFit prepare an annual Pothole Impact Tracker which estimates the annual cost in damage to vehicles in 2024 as £1.48 billions. This estimate seems consistent with data from AA and RAC on pothole related damage for their service users.

Evidence on pothole related accidents is less easy to find. An oft quoted estimate from the National Accident Helpline is that between April and June 2020 1,766 accidents were caused by potholes. But this quarter was when the whole country was locked down because of Covid so the number would not be representative. 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. The National Accident Helpline claims 15% of cycling accidents are due to potholes

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.

In addition local authorities in England have paid out £22.7 million in compensation for pothole related damage to vehicles in 2023. But most claims for pothole related damage are refused. The RAC points out that ‘the chances of making a successful claim for pothole compensation are very limited, as 76% (13) of the 17 councils that paid drivers any compensation for pothole damage refused more than three-quarters of the claims they received in 2023’.

There appear to be no UK based studies on the impact of potholes on driver behaviour. But there are some international studies, notably a dissertation in the civil engineering department of the University of Southern Queensland and an article in Applied Sciences. There is also an article that directly estimates the impact on speed for potholed segments. Translating engineering into economics is even harder than translating economics into English but what these studies appear to be saying is: that speeds are reduced by 55% over a 100 metre segment of potholed roads compared with a road with no potholes and environmental emissions are boosted by 2.9% over the segment.

The RAC data claims 6 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 DTp webtag values of time, this implies that nearly 1.3 billion hours are added to travel time because of potholes costing £13.1 billion using a weighted average cost of time. This estimate excludes time lost from added congestion and from delayed freight.

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.

Impact in Kent

Because View from the Tent has a special focus on the Kent economy, this study also looks at the impact in Kent.

There are unusually high levels of pothole damage claims in Kent. FoI requests for the RAC indicate that in 2023 there were 1,884 claims in the area covered by Kent County Council; only Surrey, Hampshire and Essex have more claims. The Council refused 92% of the claims.

In 2022/23 there were 35,000 reports of potholes in Kent according to Kent County Council. An earlier FoI request suggested that Kent was the UK’s ‘pothole capital’ with more reports of potholes in the county than in any other area. But it is worth noting that Kent (the local authority area which excludes Medway) has one of the highest levels of traffic in the UK – with 9.4 billion vehicle miles, only just below Hampshire and Essex. This is 2.8% of the national total.

Kent’s pothole problems are exacerbated by the unusually high amount of building activity in the county – as pointed out above heavy vehicles are the main cause of road damage.

Scaling for the number of potholes and Kent’s share of total traffic Kent’s share of the annual economic damage caused by potholes is somewhere between £400 million and £500 million but these figures exclude Medway. Adding in Medway would raise the estimate by about 11%. For the Kent County Council area the potholes cost £310 per person a year.

Conclusions – what should we do?

So the total annual cost of potholes in England amount to £14.7 billion. As it happens, the cost of rebuilding the roads to abolish all the current potholes and make it harder for new ones to appear is estimated by the Annual Local Authority Road Maintenance and Repair Survey to be £16.3 billion.

This means that every road in the country could be rebuilt for the cost of the economic damage in roughly thirteen months from potholes.

It looks like a no brainer to do this. But no brainer cost benefit analysis rarely guides policy decisions in government…..

Douglas McWilliams

View From The Tent

February 2024

 

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