UK axes £900m road projects to fund defence spending

The UK government has proposed cancelling two major road improvement schemes in Derby and Nottinghamshire. The move diverts £700m from the Department for Transport to help fund a £15bn increase in defence spending.

The targeted projects are the £600m A38 scheme in Derby and the A46 Newark Bypass. Both were designed to significantly widen roads and construct new flyovers to cut congestion where local traffic meets the route between Birmingham and the M1. Together, they represent £900m of lost investment for the East Midlands.

The financial fallout is already materialising. On Monday, construction firm Skanska confirmed that a £297m contract with National Highways for the A46 project had been cancelled. National Highways stated the next step would be to re-procure the main construction works, though the government's funding explainer lists the schemes for potential cancellation.

Claire Ward, the Labour mayor of the East Midlands, called the decision "completely unacceptable," arguing it undermines the regional economy. "We will not serve our defence sector well if we underinvest into its enabling infrastructure," she said. "People working in defence need good roads so that their staff can get to work, access their supply chains, and trade."

The backlash highlights a persistent regional funding imbalance. In the 2023-24 financial year, transport spending in the East Midlands stood at just 54% of the UK average, the lowest of any UK region or nation. Ward noted she was only informed of the cut while Prime Minister Sir Keir Starmer was delivering his defence speech.

"What I cannot understand is why the only region being asked to lose £900m of investment into its roads is the East Midlands," Ward said. "That is not equitable and fails to recognise the decades of underinvestment." She urged ministers to seek contributions from other regions and spending areas.

The proposal has drawn cross-party criticism from local MPs. Labour's Jonathan Davies warned the cancellation acts as a "brake on economic growth in the region," noting that growth is needed to fund defence. Reform MP Robert Jenrick said the project had been "thrown into disarray" and accused the government of sneaking the decision out without debate.

The government has stated that neither scheme had entered the contract phase. Formal stakeholder consultations will take place before any final decision is made.