Balfour Beatty, Kier and Keltbray have been cleared to start work dualling the remaining 18 miles of single carriageway on the A66 between the M6 in Penrith and the A1 at Scotch Corner.
The development consent order for the project was signed in March 2024 by the former Conservative government despite the scheme showing a benefit-cost ratio (BCR) of just 0.90, which being below 1 makes it negative. Transport Action Network (TAN) has launched a legal challenge but lost.
The scheme was then subject to review when the Labour government came in last year, and with the axing of other major controversial road building projects, including the A303 Stonehenge tunnel and the A27 Arundel bypass, the A66 upgrade was placed in doubt.
Part of the justification for the government in keeping the A66 project is that it will support the development of more than 10,000 new homes, it said.

However, TAN founder and director Chris Todd questioned this analysis. 鈥淭he only thing this will grow is more traffic and more HGVs on our roads, making them less safe. The government is also being rather coy about its true cost.鈥
The project was last costed at 拢1.5bn in 2022 but the absence of any funding figures in the announcement suggests costs have risen further, he said.
Transport Secretary Heidi Alexander said: 鈥淭ransport is the backbone of our economy, which is why we are giving them the record funding boost they need, putting taxpayers鈥 money where it matters most and making everyday journeys easier.
鈥淲e鈥檙e forging ahead with the vital new transport infrastructure Britain needs, and improving what we鈥檝e already got, to deliver a new era of renewal and opportunity.鈥
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