Why Local Authorities Require Road and Sewer Bonds?
According to government data, housing programmes delivered by Homes England resulted in 15,682 new houses starting on site and 14,295 new homes completed between April and September 2024. With tens of thousands of homes being built across public and private developments, local authorities have the monumental task of integrating these buildings into existing infrastructure.
But how can they guarantee these developments are up to standard?
Road bonds, highway bonds, and sewer bonds offer financial protection, which is integral to a local authority’s ability to ensure the infrastructure is built to last and requires minimal maintenance in the years to come.
What Are Road Bonds?
Road bonds, also known as highway bonds, are financial guarantees required by local authorities to ensure that developers complete new road construction projects to the appropriate standards and specifications, and that the roads are ready for adoption.
They act as a safeguard, protecting the local authority from potential costs associated with unfinished or substandard work.
Who Needs Road, Highway, and Sewer Bonds?
When a developer wants to build a new residential housing development, they must construct new roads and install a sewer system to connect the houses to the central infrastructure.
However, local authorities, such as city councils, and water companies have strict requirements for these projects to maintain quality, safe, and well-maintained roads and sewers. If a developer wishes for the road or sewer to be adopted by the local authority or water company, they must obtain a road or sewer bond as a financial guarantee.
Road Bonds – Site Infrastructure Guarantee
Road bonds are crucial in ensuring that developers complete construction projects to the highest standards.
When developers are obligated to fulfil the terms of a bond, they are incentivised to adhere to strict construction standards and timelines. Should a developer fail to meet these obligations, the bond provides local authorities with the financial resources to rectify deficiencies or complete the unfinished work.
The financial guarantee also provides councils with the assurance that the risk of encountering unfinished or substandard work is minimised
Public investment is often made in infrastructure projects, so these bonds protect that money and guarantee the community benefits from high-quality, long-lasting infrastructure.
Ensuring Adoption and Maintenance with Road Bonds
Road and highway bonds play a crucial role in ensuring that new infrastructure meets the necessary standards for adoption by the local authority.
Adoption is a critical step in the lifecycle of a road or sewer as it is the final box left to be ticked before the local authority green lights the infrastructure as up to standard and assumes responsibility for ongoing maintenance.
By incentivising developers to prioritise quality construction that meets the adoption requirements, bonds help ensure that the community benefits from high-quality, long-lasting infrastructure.
Without these incentives, the council is vulnerable to adopting infrastructure subject to failures, safety hazards, and immediate repair costs.
Rely on the Experts at RS Bonds for Your Road Bonds
RS Bonds are the only company in the UK that specialises exclusively in the procurement of road and sewer bonds on behalf of housebuilders. We have a 100% track record of securing bonds for our clients, regardless of their financial strength.
Why choose RS Bonds?
- Expert Guidance: As the UK’s market leader, we provide all clients with ongoing technical and legal advice.
- Comprehensive Bond Management: Our Bond Management service offers continuous support, including key milestone dates and adoption/bond cancellation assistance.
- Simplified Application: Our streamlined application form makes the process easy and efficient.
- Dedicated Support: You’ll have a dedicated client account manager to guide you every step of the way.
- FCA Regulated: RS Bonds Surety is authorised and regulated by the Financial Conduct Authority (FCA), ensuring your peace of mind.
- Comprehensive Solutions: We can also assist you with other surety bonds, such as performance bonds, through our sister website.
Get in touch with one of our dedicated account managers today, or fill in our quote request form, and we will secure your road or sewer bond in a way that works for you.
