Update on Birmingham's highways PFI contract
The Department for Transport (DfT) is ending the long-standing Private Finance Initiative (PFI) contract it has in place with us, along with the associated funding.
Following the DfT's decision to end the PFI contract, Birmingham Highways Limited (BHL) has communicated its intention to withdraw from our highway maintenance arrangements as part of a managed transition.
The project agreement between us and BHL will terminate. Responsibility for the Interim Services Contract (ISC) transferred to us from BHL on 31 July 2026.
Impact on our highways services
We do not expect an immediate impact on the maintenance and management of Birmingham's highways network.
We are developing a long-term replacement for the highways PFI project.
To support this process, highway maintenance services will continue through an extended ISC with Kier until 31 July 2028. There is an option to extend the agreement until 30 April 2029.
This will help maintain the delivery of highway maintenance services and support our statutory duties.
Background
Birmingham's highways maintenance and management services have been delivered through a PFI contract since 2010.
On Thursday 30 November 2023, we received confirmation from the Department for Transport (DfT) that the Government would not continue the existing funding arrangement.
We successfully challenged the decision through judicial review. The judgment, published on Monday 17 June 2024, found that the DfT's decision was unlawful and quashed it.
The DfT then reviewed its decision and informed us on 20 March 2026 that it would maintain its original position and would not continue to fund the PFI contract. The funding arrangement ended on 30 March 2026.
The judgment can be read in full online.
Related documents
Highway Maintenance and Management PFI Contract (Cabinet report, 5 September 2023)
Page last updated: 4 August 2026
