Firms must pay £500 a day to dig up roads

Utility firms will bear heavy financial penalties for a habit that infuriates motorists and residents alike: digging holes in the road.

Utility firms will bear heavy financial penalties for a habit that infuriates motorists and residents alike: digging holes in the road.

Pilot schemes were launched yesterday to penalise the companies from the day they start digging, in an attempt to ease congestion and the £2bn cost to business each year. Companies excavating roads will be charged a "lane rental" of £500 a day from the moment they begin work. Revenue generated will go to local councils for use on roads.

Motoring organisations welcomed the move but utility companies described it as a "grossly unfair" method of scapegoating them, and hinted that customers would end up footing the bill. They said local councils, another culprit in the disruption, would not suffer proposed levies.

The recent proliferation of cable television companies has aggravated a perennial problem with 500,000 holes dug by utility companies in London alone. For some the position has reached extremes, as the people of Aldgate High Street in the City – dug up 47 times in 12 months – can testify.

John Spellar, minister for Transport, said: "Our decision to mount these trials clearly demonstrates our determination to deal with this blight because frankly the public has had enough." The pilots will be run in Middlesbrough and in Camden, north London.

Under regulations introduced in April, highway authorities can impose a £2,000 daily fine on companies overshooting deadlines. Yesterday, the Government said the pilot "lane rental" could be introduced nationally if disruption continued.

Eight gas companies, 14 electricity firms, 30 water and sewage suppliers and 80 telecoms and cable companies are allowed to dig up roads. An independent report this year estimated the cost of roadworks to business was about £2bn a year, based on traffic delays, damage to roads and accidents.

Mr Spellar said: "As you go around London you can see a whole number of roadworks with nobody working on them. Now that's just bad planning and bad scheduling. The big issue here is making sure we get the roadworks, which are often performing a necessary role, we get them in quickly and we get them out quickly."

Edmund King, executive director of the RAC Foundation, said: "Making utility companies pay for the massive amount of inconvenience they cause will encourage them to complete their work promptly and co-ordinate with other companies."

The angry utilities companies said one of their surveys showed that most people identified local authorities as the guilty parties in road congestion. Other causes were the excessive number of cars, badly designed roads and a lack of affordable public transport.

Bill Linskey, chairman of the National Joint Utilities Group, said: "These figures show that to tax utilities, and utilities alone, for contributing to congestion would not only be grossly unfair, it would do nothing to address the main causes of congestion."