Potholes, Power, and Progress: The Roadmap to Smarter Deals

Potholes are back in the headlines—again. With councils taking up to 18 months to fix them and a £16.3 billion repair backlog, the public is understandably losing patience. But beyond being a physical nuisance, potholes are also a perfect metaphor for how not to handle conflict.

In any conflict, there must be reasons why all the parties involved want to reach an agreement. If the costs of doing nothing outweigh the costs of doing something, then guess what… not much happens.

Moreover, the desire to do a deal is driven by the cumulative weight of factors affecting interests:

• Incentives (things people want) or

• Sanctions (things people want to avoid)

Or carrot or stick, if you prefer.

Now in the case of potholes, the UK road maintenance pot is to be boosted by £500 million from mid-April, but the sanction is that councils must publish annual reports detailing progress—or risk losing 25% of that extra funding. Of course, the other way to look at this is that a council could receive an additional 75% funding for doing absolutely nothing—some might see this as quite an attractive incentive in its own right.

Negotiated agreements should be both workable and attractive to many to succeed. In this case, whilst some have championed the idea of improving potential pothole areas before they become a problem (allegedly a cheaper fix), what gets measured gets done. I strongly suspect that councils are more sensitive to addressing an existing problem in plain sight than to preventing one no one’s currently complaining about. People seem to be frustrated not just by the amount of time it takes to fix them, but also the quality of repair—with a number noting that potholes reappear in the same area again and again shortly after the improvements have been made.

In past construction and infrastructure projects, some proactive governments have decided to cut through protracted debates with contractors about work details by proposing a pitchfork proposal (2-option) approach. In this early completion bonus arrangement, contractors are offered a graduated financial incentive to complete the work early, tied to an increasing penalty system for late completion.

This, in effect, is a bet against future events—the secret is to stack the cards in favour of the incentive. The contractor calculates it’s cheaper to pay the overtime and finish early than to pay the fine and finish late.

A similar methodology could be applied to pothole repairs. Councils could develop a scorecard of specific targets on cost, time, volume and quality (yes, there may need to be a retrospective element for this last variable), with payment against incremental results. And why stop there? Add a further bonus if all the metrics are hit.

Ultimately, potholes aren’t just a test of asphalt—they’re a test of alignment. If councils, contractors, and the public are all pulling in the same direction, with incentives designed to drive timely, high-quality outcomes, then progress becomes not just possible, but inevitable.

Because if everyone’s on the same road, the smart move is to make it a smooth one.

25th March 2025

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