Councils could lose up to a third of their pothole funding if they fail to prove they are fixing roads under new Government rules.

Local highway authorities must now show they are maintaining roads effectively or risk losing part of their share of £1.6 billion next year.

The Government said the changes, announced on Monday, April 14, are designed to ensure taxpayers’ money is spent on road repairs and not diverted elsewhere.

Under the measures, £525m of funding will be withheld unless councils publish reports showing how money is being spent, alongside long-term maintenance plans and evidence of staff training.

Pothole damage costs drivers around £500 on average in avoidable repairs, ministers said, as they pledged to ensure funding delivers “smoother, safer roads”.

Roads and buses minister Simon Lightwood said: “Drivers deserve smooth, safe journeys, and we’re making sure every pound goes straight into fixing roads and tackling potholes, not being spent elsewhere.

“We’ve made it crystal clear that councils which fail to maintain their roads will now risk losing up to a third of their funding.”

For the first time, councils will also receive multi-year funding to help plan long-term maintenance and “reverse a decade of decline”.

RAC head of policy Simon Williams said the measures should help tackle poor road conditions, adding: “Ensuring money that is given to councils to improve their roads is actually spent on roads is critical.”

The AA president Edmund King said: “Fixing potholes remains the number one motoring issue for drivers, so it is right that councils are being scrutinised over their repair plans.”

The Government has also introduced a red, amber and green rating system for 154 local highway authorities based on road conditions and performance.

Thirteen “red-rated” councils will receive additional support worth £300,000 over two years to help improve standards and deliver better results for road users.

Surrey County Council and Hampshire County Council both received an Amber rating in the January 2026 government assessment of local road maintenance