Kier Secures £120 Million Birmingham Highways Contract Extension Until 2028

City council awards interim highways maintenance deal to ensure continuity of frontline services while long-term procurement continues following the end of the PFI era.

Kier has secured a £120 million contract extension to continue maintaining Birmingham's highways network after Birmingham City Council approved a new interim agreement running until July 2028.

The award ensures essential highway maintenance services will continue uninterrupted following changes to the city's long-running highways Private Finance Initiative (PFI), with the council citing the need to maintain statutory highway safety responsibilities while it develops a longer-term delivery model.

The new contract has been awarded through a direct award procedure and includes the option to extend the arrangement for a further nine months until April 2029.

Ensuring continuity after PFI funding changes

Kier currently delivers highways maintenance services through Birmingham Highways Limited, which has operated as the council's contractor under the city's highways PFI programme.

Under the new arrangements, the existing contract will be transferred from Birmingham Highways Limited directly to Birmingham City Council shortly before the current agreement expires on 31 July 2026.

The authority will then formally vary the contract, allowing Kier to continue providing highways maintenance and associated operational services from 1 August 2026.

£120 million interim agreement

The extension is valued at £120 million excluding VAT, rising to £144 million including VAT, and will cover routine highway maintenance and operational services across Birmingham's extensive road network.

The council has also secured the option to extend the contract by up to nine months, taking the maximum contract duration through to 30 April 2029.

Any extension will be subject to both available funding and Kier meeting agreed performance requirements throughout the contract period.

Bridge to a long-term highways contract

Birmingham City Council said the interim arrangement is necessary following the Department for Transport's decision to withdraw support for continued funding of the city's highways PFI programme.

Although the authority had intended to procure a new long-term highways maintenance contract, additional time is required to complete that process while ensuring services continue without interruption.

The council said the extension would provide stability during the transition and protect its ability to meet statutory duties relating to highway safety and network maintenance.

Maintaining one of Britain's largest local road networks

Birmingham manages one of the largest local authority highway networks in the UK, with responsibility for thousands of kilometres of roads, footways, bridges, traffic signals and associated highway infrastructure.

Maintaining continuity of service is considered essential to ensuring road users continue to receive routine maintenance, defect repairs, winter service operations and emergency highway response throughout the procurement period.

Procurement decision finalised

The award decision was approved on 21 July 2026, with the contract expected to be formally signed no earlier than 31 July, immediately ahead of the commencement of the new agreement.

The extension provides Birmingham City Council with breathing space to complete procurement of its future highways maintenance arrangements while ensuring frontline services continue to operate without disruption across the city's transport network.