The roll-out of new government funding [1] is an opportunity for highway authorities to accelerate the deployment of Electric Vehicle (EV) charging infrastructure. However, there are key legal, commercial and practical matters to be considered first.
Below are the top eight:
Funding approval processes
The largest funding stream is the Local Electric Vehicle Infrastructure (LEVI) fund, overseen by the Office for Zero Emission Vehicles (OZEV). The LEVI fund is to be used by councils to pay for the installation of EV charge points by Charge Point Operators (CPOs). OZEV has instigated a process that councils must follow, involving the submission of specifications, KPIS, contracts and tender documents, to ensure that LEVI funding is deployed in line with government policy outcomes.
Each council has its own unique features of geography, demographics, resources, finances and available land. Combined with the desire to make their projects appealing to the CPO market, these features must be carefully considered and balanced to ensure project proposals remain compliant with LEVI funding terms.
Procurement and contracting
OZEV's recommended structure is a long-term concession arrangement under which the LEVI funding acts to stimulate investment in EV charge points by CPOs. The risk of installing, maintaining and operating the EV charge points for a profit is therefore transferred to the CPO.
Structuring the arrangements and drafting a suitable contract document raises some key issues:
- How can the transfers of risk/reward to the CPO be coupled with a contract management regime that allows the council to monitor quality and safety?
- How should the concession fee paid by the CPO to the council be structured so that it can cover its monitoring costs while acknowledging that a revenue share will not yield significant returns in the first few years?
- What does an appropriate procurement procedure look like for a concession contract, both under the current Concession Contracts Regulations 2016 and (from 28 October 2024) the Procurement Act 2023?
Acting within the correct powers to install EV chargers on public highways
Each highway authority will face unique circumstances when installing infrastructure. Understanding the relevant powers available, and how they apply to the regional context, will be key.
Section 62(2) Highways Act 1980 provides authorities with the general power to carry out any work for the improvement of the highway, which can be interpreted to extend to the installation of EV infrastructure. Authorities are permitted to contract out the exercise of this power under Article 3(2) of the Contracting Out (Highway Functions) Order 2009 – but they remain ultimately liable for the safety of the highway. Placing clear contractual quality and monitoring obligations on a CPO is essential to balance infrastructure delivering with continuing highway safety.
Licensing for CPO’s under NRSWA: following public law principles
Notwithstanding any delegation of highway authority functions, a CPO must apply for a licence under s50 of the New Roads and Street Works Act 1991 (NRSWA). Following s51(1) it would be an offence to install EV charging infrastructure without a licence. Authorities have a discretionary power to grant the licence, which must be exercised carefully.
Non-statutory s50 guidance[2] emphasises how all applications should be considered individually before being refused. Any decision must abide by the public law principle of rationality and only consider relevant matters regarding the application.
Authorities must assess each application on its merits – relating to the potential impact on highway improvement and management. Weight given to pre-existing contractual relationships (i.e. a preference for the council's own procured CPO) may not be justifiable as reasonable in public law terms.
Relatedly, government has consulted[3] on proposals to change the way legal access for street works could be carried out by CPOs. Authorities should keep up to date on how any changes may impact their discretion to allow or prevent EV charge point installations.
Revenue generation through EV infrastructure provision
There is no express restriction on authorities exercising their general powers to generate income from highway installations, including the provision of EV infrastructure. However, each authority should consider the broader principles related to generating revenue:
- Currently, providing EV infrastructure is not a statutory duty. If this changes, then such provisions cannot be charged for unless stated in the relevant legislation.
- Are the EV charge point installations a discretionary service? An authority may charge for this provided the charge does not exceed the cost of providing the service[4].
- Is the authority providing EV charge point installations for a commercial purpose? If acting in this way, it must do so through a company[5].
- Is a revenue share or concession fee secured following a procurement process an incidental by-product of a best value procurement process, or has making money been the authority's primary intent?
Subsidy control
When procuring CPOs to install infrastructure using government funding to stimulate investment, authorities must ensure they comply with applicable subsidiary control requirements. Pursuant to the Commercial Market Operator principle, no subsidy arises where a provider would receive the same remuneration as they would reasonably expect to obtain from the open market. This is because these transactions do not confer an economic advantage. Therefore, conducting a compliant concession procurement process, with a suitably market-tested level of funding support and revenue share, is essential to subsidy control compliance. Providing direct grant funding will require further subsidy contract analysis and advice.
Homeowner-installed EV charging solutions
Government funding is also available to residents to pay for the installation of a cross-pavement gully, or an overhanging "chargearm", allowing cable access from a property to the street. Their condition is the concern of the highway authority which remains responsible for the safety of the highway, including the pavement.
Residents wishing to install such a charging solution must apply for a suitable licence and authorities must ensure they have appropriate licence terms in place. For example, Schedule 3 of NRSWA, sets out licence conditions that could be put in place between the authority and residents including indemnities for "claims in respect of injury, damage or loss’ which may arise from a pavement gully. Section 178 Highways Act 1980 provides for similar licences to govern overhanging charge arms.
Control over the land needed for EV charging infrastructure and engagement with relevant stakeholders.
As more authorities look to roll out EV infrastructure land ownership considerations will become increasingly pertinent. For example, land needed for charger installation may belong to a third party, which may require leasing arrangements. Clear engagement across all relevant stakeholders, including landowners, will be paramount to avoid delays and to deliver successful EV infrastructure projects.
Conclusion
Highway authorities face various legal, commercial and practical considerations as they use increased government funding to promote EV infrastructure. For more information and advice, please contact Louis Sebastian.
