How Potholes Are Costing The UK Economy Billions

Whether you drive, cycle or skateboard along UK roads, you’ll probably notice that Britain has a serious pothole problem.

But aside from being annoying for drivers, potholes are actually a huge economic issue – as they can result in serious accidents, high congestion and vehicle damage.

In fact, just last year, the Asphalt Industry Alliance (AIA) reported that the cost of fixing all the potholes in England and Wales would be £17 billion. According to the Centre for Economics and Business Research (CEBR), this could be a good investment, as potholes cost £14.4 billion per year in economic damage.

Whilst the government is trying to keep up with this, the situation is only getting worse. In fact, The AIA reported that 1 in 6 UK roads will need re-laying within 5 years.

But why is it such a huge economic drain?

 

The Cost To Drivers

 

According to a report by Kwik Fit, the cost of fixing pothole induced vehicle damage costs an average of £144 per repair. This amounts to a huge cost of £1.7 billion for UK drivers.

And whilst some drivers are able to claim compensation from their local authorities, this cost councils around £22.7 million. Therefore, potholes don’t only cost drivers, they cost public services too.

And unfortunately, the cost isn’t getting any lower. With wage inflation and the increased cost of materials, the price of potholes is only set to increase over the coming years.

 

Wider Economic Costs

 

But the costs aren’t just direct. In fact, the RAC estimated that 1.3 billion hours are added to travel time because of potholes, costing £12.7 billion on average. This cost includes everything from the longer journey time to the delayed delivery of goods – meaning it hits on both ends.

And it’s not just business that suffers. When vehicles continuously speed up and slow down, emissions increase dramatically – which means the country has to battle even harder to offset them.

 

The Cost To Human Safety

 

Aside from productivity and vehicle damage, potholes can also cause serious injuries to people. Between 2018-2022, 451 people were killed or seriously injured in pothole-related accidents – and most of them were cyclists.

If you think about the additional cost of this for the NHS, combined with all the other factors mentioned, it quickly becomes clear how much of an economic problem potholes really are.

 

 

Why The Pothole Crisis Is Getting Worse

 

Despite the obvious issues that potholes bring – and the government’s plans to improve them – the situation is only getting worse.

According to LocalGov.co.uk, local spending on routine road maintenance dropped by 27% since 2006, falling from £1.76billion to £1.28 billion. And the backlog is only getting bigger, with only 47% of local roads now believed to be in ‘good condition’.

And councils aren’t helping things. According to a Telegraph report in January 2025, 1 in 8 highway authorities are refusing to fix potholes in the UK that are less than a foot wide.

Given that 15 people every month are killed or left with serious injuries due to potholes, this policy runs the risk of making roads even more dangerous.

 

Conservatives Wanted To Invest, But Was It Too Little Too Late?

 

Despite consistently pledging to put an end to potholes on British roads, according to Kiely, 2023 was the 3rd worst year on record for pothole related breakdowns.

In their 2023 manifesto, the Conservatives proposed investing £8.3 billion to fill potholes and resurface roads, funded by cancelling the second phase of HS2. This was part of a wider proposed £36 billion investment in roads to help stimulate growth.

However this pledge was too little too late, as they lost the 2024 election, with Labour citing that UK roads were in “a decade of decline”.

 

 

How Do The Current Government Plan To Fix It?

 

The government have repeatedly pledged money to help lower the economic cost of potholes. In the December 2024 budget, £1.6 billion of funds were released to help councils “reverse a decade of decline”.

According to Gov.uk, this could help councils fill in 7 million extra potholes next year, saving drivers hundreds in repairs.

Transport Secretary, Heidi Alexander commented: “This government is firmly on the side of drivers. Every area of England will get extra cash to tackle this problem once and for all. We have gone beyond our manifesto commitment to back motorists and help raise living standards in every part of the country.”

But is it enough and do overdue repairs constitute investment, or simply playing catch up? Should investment truly be investing in improving the road quality for road users rather than righting wrongs with the roads?

 

Should Potholes Be Higher On The Government Agenda?

 

The UK’s pothole problem isn’t just a headache, it’s costing the economy billions of pounds every year.

Between the cost of repairing broken vehicles, lost working hours, emissions and accidents, it’s amazing how much impact holes in the road can have. Instead of trying to quick fix the problem, many experts have recommended that the government invests properly in Britain’s roads, in order to help the economy grow in the long-run.

As we approach the October budget, it will be interesting to see what public funds the government invests in for long-term growth. We will wait to see if potholes are part of the equation…