Local highway authorities across England have now received their DfT RAG ratings - and the pressure to act is only increasing.
For 2026 to 2027, the government has confirmed a revised set of Incentive Fund requirements. These are the conditions authorities must meet to access their full allocation of highways maintenance funding. They are not just a reporting exercise. They reflect a broader expectation: that authorities can demonstrate not only what they are spending, but how they are planning, what outcomes they are achieving, and how they are communicating all of this to the public.
The link between transparency, planning, and funding access has never been more direct.
What are the four DfT Incentive Fund requirements for 2026–27?
The 2026 to 2027 Incentive Fund requirements set out four clear expectations:
- Publication of a highways maintenance transparency report. Authorities must publish a report for 2026 to 2027, so that residents can see how funding is being spent and what outcomes are being achieved. Transparency reporting requirements are currently under review, with updated guidance expected shortly.
- Full spend of DfT highways maintenance funding on highways maintenance. Authorities are expected to spend at least the value of their DfT allocation on highways maintenance — and this must apply consistently, not just in most cases.
- Publication of an updated highways asset management policy and strategy. Maintenance plans must consider whole-life cost and long-term outcomes, rather than focusing on reactive approaches.
- Demonstration of continued professional learning. This includes a specific focus on preventative maintenance. In 38 authorities across England, no preventative road surface treatments were planned for 2025 to 2026. Those authorities will need to demonstrate a clear commitment to changing that approach.
How much highways maintenance funding is at risk if you don't comply?
The Incentive Fund requirements do not sit in isolation. They build directly on the RAG ratings published earlier this year, which assessed authorities across a range of performance metrics including road condition, maintenance approach, spend patterns, and planning practice.
The direction of travel is clear: authorities are expected to move from reactive maintenance to planned, evidence-led asset management. Those who can demonstrate a structured approach — with strong data, clear planning, and the ability to report outcomes transparently — will be best placed to meet these requirements and protect their funding position.
The ALARM survey reinforces the scale of the challenge. With a maintenance backlog now estimated at £18.6 billion and roads being resurfaced on average once every 97 years, the case for preventative, planned investment has never been stronger. Increased spend alone will not be enough — it needs to be the right spend, targeted in the right places, and clearly evidenced.
The government has committed £7.3 billion in highways maintenance funding between 2026–27 and 2029–30. For each financial year, a portion of your allocation sits behind the Incentive Fund — and each of the four requirements unlocks a specific share of it.
| Requirement | Funding at risk |
|---|---|
| Publish a highways maintenance transparency report | 50% — and a prerequisite for all other payments |
| Spend all DfT highways maintenance funding on highways maintenance | 25% |
| Publish an updated highways asset management policy and strategy | 12.5% |
| Demonstrate continued professional learning | 12.5% |
Fail to publish a transparency report and all incentive funding is withheld — the other requirements cannot compensate. The transparency report is the gateway.
What do high-performing highway authorities do differently on asset management?
The authorities that are best positioned to meet these requirements share some common characteristics. They are not simply spending more — they are connecting planning, data, and delivery in a more structured way.
Northumberland County Council is a strong example of what this looks like in practice. By taking a more planned, data-driven approach to highways asset management, they have reduced insurance claims by 76% and secured £3.5 million in additional funding. That kind of outcome is only possible when investment decisions are properly targeted and clearly evidenced.
For other authorities, the gap is often not in the work being done — it is in how that work is planned, recorded, and communicated. Maintenance activity that is not clearly linked to strategic outcomes and documented in a structured way will struggle to meet the transparency and asset management expectations now being set.
What is the DfT RAG rating system and how does it relate to the Incentive Fund?
Every local highway authority in England has been assigned a Red, Amber or Green rating by the Department for Transport. These ratings are published publicly and are based on three scorecards:
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Road condition - the current state of your local network
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Spend levels - how much you are investing in maintenance relative to your allocation
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Best practice adoption - including whether authorities are using data, planning ahead, and applying preventative approaches.
Green is the highest rating. Red signals underperformance across one or more of those areas. Your RAG rating reflects the same areas the Incentive Fund requirements are designed to address — authorities rated Red or Amber have the most to gain from demonstrating improvement through the 2026–27 requirements.
How should local authorities prepare for the DfT Incentive Fund requirements?
Meeting the 2026 to 2027 requirements will look different for every authority, but there are three areas where most can make meaningful progress:
- Planning for the long term. Shifting from reactive to preventative maintenance requires a works programme built around network condition, whole-life cost, and targeted investment — not just responding to defects as they arise.
- Improving how outcomes are evidenced. Whether for the transparency report or the asset management strategy, authorities need to be able to clearly link spend to outcomes. Good data and structured reporting are essential.
- Spending the full allocation — and demonstrating it. The requirement to spend at least the value of DfT funding on highways maintenance is straightforward in principle, but needs to be clearly documented and evidenced in practice.
Why is £7.3 billion in highways funding a turning point for local authorities?
This is not a one-year adjustment. The government has confirmed record long-term investment — £7.3 billion across the four years to 2029–30 — specifically to allow authorities to plan ahead, shift to preventative maintenance, and improve network condition sustainably. The Incentive Fund requirements are the mechanism for ensuring that investment is used effectively. Authorities that build the right foundations now will be best placed to access and retain their full share across the entire period.
How Causeway helps local authorities meet the DfT Incentive Fund requirements
Causeway works with local authorities to help them plan more effectively, make better use of their data, and evidence their decisions clearly.
Causeway Horizons supports authorities in building forward-looking works programmes aligned to network condition and long-term outcomes — the kind of structured approach that underpins both a strong asset management strategy and a credible transparency report. Combined with CausewayOne Asset Management for operational data capture and delivery tracking, authorities have the tools to connect strategy with delivery and evidence both.
As the requirements around transparency reporting are finalised, we are working with our customers to ensure they are well prepared — with the right data, the right plans, and a clear way to communicate them.
What are the key deadlines local authorities must meet in 2026–27?
| Requirement | Deadline |
|---|---|
| Updated transparency report guidance published by DfT | Published - Spring 2026 |
| Authorities publish their 2026–27 transparency report | Within 3 months of guidance being issued |
| Full DfT spend and asset management strategy evidenced | Within the transparency report |
| Professional learning demonstrated to DfT | By 30 November 2026 |
Missing the transparency report deadline is the highest-risk failure — it triggers a full withholding of incentive funding, not just a partial reduction.
Prepare for 2026 to 2027
If you want to understand how your current approach maps against the Incentive Fund requirements — and where to focus your efforts over the coming months — we can help.
Speak to your Causeway contact
