We Pay £35 Billion a Year… So Why Are Our Roads Still Broken?

UK motorists contribute around £35 billion annually through fuel duty, VED and charges – yet we’re still dodging craters. Where does the money actually go?

Our roads right now look like grey apple crumble. I’m not exaggerating. There are more craters on a typical UK high street than on the entire surface of the moon, and yet we – the long-suffering, tax-paying, suspension-replacing motorists of this sceptred isle – are shelling out a small nation’s GDP just for the privilege of driving across them.

Fuel duty at the pump. Vehicle Excise Duty every year. The so-called “luxury car” supplement if your pride and joy cost over £40,000. Parking charges. Congestion charges. ULEZ charges. And, of course, those little yellow love letters fluttering under your wiper blade like a passive-aggressive Valentine from the council.

Add it all up and UK motorists contribute in the region of £35 billion per year.

Thirty-five. Billion. Pounds.

And yet somehow, your front-left still disappears into a pit of doom on a dark, wet Tuesday night. So where does all that money actually go? Let’s follow it.

The £35 Billion Question

Fuel duty alone raises around £24 billion per year for the Treasury. VED brought in £7.4 billion in 2023/24 and is forecast to climb past £9 billion within the next couple of years. Add billions more from parking charges, penalty notices and road-user schemes, and the annual motoring contribution comfortably sits around that £35 billion mark. That’s not loose change down the back of the national sofa – or the nearest pothole!

Historically, there was something called the Road Fund, created in 1909. It was meant to ring-fence motoring taxes specifically for roads. A fair deal, you might think. You pay for the road, the road gets fixed. Except that didn’t last.

Hypothecation – the fancy word for ring-fencing tax revenue – was ended by the Finance Act 1936. From April 1937 onwards, motor vehicle taxes were paid straight into the government’s Consolidated Fund. The Road Fund itself was formally abolished in 1956.

In modern terms? Your fuel duty and VED go into the same pot as everything else – schools, hospitals, defence, debt interest, the lot. There is no automatic link between what you pay at the pump and the pothole outside your house.

Is Any Of It Ring-Fenced For Roads?

At the national level? No. At the local level? Partly.

Under Section 55 of the Road Traffic Regulation Act 1984, councils must use parking surpluses for transport-related projects. In England alone, 295 councils generated £2.163 billion from parking in 2024–25, spent just over £1 billion, and recorded a surplus of around £1.094 billion.

In London, Transport for London’s Congestion Charge, ULEZ and LEZ brought in roughly £956.7 million in 2024/25, and that net revenue must legally be reinvested into London’s transport network.

But that doesn’t mean it all goes to potholes. It funds buses, cycle lanes, concessionary fares, infrastructure upgrades and public transport schemes. Meanwhile, the big-ticket national taxes – fuel duty and VED – remain in the general Treasury pot.

The State of the Roads

According to the Asphalt Industry Alliance’s latest ALARM survey, the backlog of carriageway repairs in England and Wales is approaching £17 billion. Local authorities estimate they need a one-off £16.8 billion injection just to bring roads back up to a reasonable standard, plus around £7.4 million per authority every year to stop further deterioration.

Last year, only 1.5% of the network was resurfaced. Councils filled around nine million potholes, costing £137.4 million. Planned preventative surface treatments cost between £3.50 and £8 per square metre. However, reactive pothole repairs cost around £81 per hole.

In motoring terms, that’s like refusing to service your car for years and then acting surprised when the engine seizes.

The Government’s £24 Billion Plan

To be fair, the government isn’t ignoring the pothole problem. There’s a £24 billion package over four years for road maintenance and improvement. A £7.3 billion local roads package. A £500 million uplift tied to transparency requirements. A £1.6 billion pothole fund. Plus £1.4 billion for EV support and £400 million for charging infrastructure.

Sounds big. But spread across multiple years, across the entire network, and across competing priorities, it’s less of a tidal wave and more of a cautious hosepipe. And remember: the backlog alone is nudging £17 billion already.

Meanwhile, fuel duty revenues are expected to decline as EV uptake increases – which raises another awkward future funding question that no one seems eager to answer publicly.

The Real Cost To Motorists

Here’s the part that doesn’t quite make it into Treasury spreadsheets. The true cost of potholes isn’t just a line item in a council budget.

It’s estimated that pothole damage costs motorists around £1.7 billion annually in repair bills. Suspension components. Bent alloys. Blown tyres. Cracked springs. Damaged steering racks. Sometimes far worse.

And that’s before you factor in the lost hours waiting for recovery trucks, the missed deliveries when vans are off the road, the lost business when tradespeople can’t get to jobs, or the burden placed on emergency services when accidents occur.

Every crater has a ripple effect: time lost, income lost, and confidence lost. And there’s also the simple mental strain of driving defensively not because of other drivers, but because you’re scanning the tarmac for geological hazards.

So… Are We Paying Enough?

Motorists are undeniably paying vast sums into the system. But because most of it flows into the Consolidated Fund, there’s no direct accountability link between “tax paid” and “road repaired.”

You are contributing. But you are not guaranteed smooth tarmac in return. And that disconnect is what fuels frustration.

The Bottom Line

Good roads are not a luxury. They are economic infrastructure. They keep travel times predictable, reduce vehicle wear, support logistics, and underpin local economies. They matter.

So next time you jolt over a crater, it’s worth remembering that the issue isn’t necessarily that no money exists. It’s where that money goes.

The debate isn’t about whether motorists contribute. It’s about whether the system still reflects the reality of how dependent modern Britain is on the car.

What do you think? Is the government doing enough? Or are we just funding everything else while dodging craters like it’s Dakar?

Let me know in the comments.

---

If you found this useful, interesting or fun, consider supporting me via Patreon, Ko-Fi, or even grabbing a copy of one of my books on Amazon. Every bit helps me keep creating independent automotive content that actually helps people.

BrownCarGuy Books!

Support independent car journalism 🙏🏽☺️ grab my books on Amazon, take up membership to BrownCarGuy on YouTube, or join me on Ko-Fi or Patreon.

👉🏽 Channel membership: https://www.youtube.com/browncarguy/join
👉🏽 Buy me a Coffee! https://ko-fi.com/browncarguy
👉🏽 Patreon – https://www.patreon.com/BrownCarGuy

MY BOOKS ON AMAZON!
📖 Want to become an automotive journalist, content creator, or car influencer? Check out my book: How to be an Automotive Content Creator 👉🏽 https://amzn.eu/d/7VTs0ii
📖 Quantum Races – A collection of my best automotive sci-fi short stories! 👉🏽 https://amzn.eu/d/0Y93s9g
📖 The ULEZ Files – Debut novel – all-action thriller! 👉🏽 https://amzn.eu/d/d1GXZkO