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Financing Road Safety

Without secure and stable funding, no serious actions can be taken to improve road safety. Likewise, numerous interventions designed to improve road safety in low income countries have failed due to lack of sustainable funding. Identifying and securing sustainable funding is thus a key element underlying all road safety action plans.

Road safety interventions are normally regarded as a key responsibility of government and are financed through the budgets of concerned public sector agencies. Public sector funding for road safety should not be restricted to the road authority. The ambulance and hospital service, the police and the school system all have a part to play and their spending will often exceed that incurred by the transport ministry and road authorities. Most of these activities are funded by the public sector, although the private sector may pay for services like driver training and vehicle testing.

National and local government support

Large sums of public money are spent annually by some governments on preventing and responding to road crashes and injuries. Road safety concerns are increasing, putting further pressure on government revenues in most countries. Governments must find ways of meeting these demands.

In developing and transition countries, funds for road safety can be supplemented by donor financed grants and loans. The donor funds can be channelled through projects in the transport or the health and education sectors.

Click here to see how to apply for road safety funds under a donor financed project.

Fees for selected road safety services

Fees from services like road-worthiness testing, driver training and testing, driver licensing and heavy vehicle operator licences are often used to cover road safety costs. In many instances, these funds help reduce public sector deficits and ensure ongoing support for road safety initiatives. There is no guarantee that extra funds received by charging for services will be allocated to road safety initiatives but the principle is a good one. Some countries spend a proportion of traffic fines revenue on road safety issues.

Road funds

Some road funds put the financing of road safety initiatives as a main priority, and allocate resources accordingly. One of the best examples is Transfund in New Zealand. The first budget item of this fund, which is entirely financed by road user charges, is to support police in traffic law enforcement and the work of the Land Transport Safety Authority (LTSA).

Click here to see a summary of how Transfund finances road safety.

Levies on licences and insurance premiums

Several countries have introduced road safety levies, which are added to insurance premiums or vehicle licence fees. The proceeds of the levy are used, generally under the direction of a national road safety council (or equivalent), to finance road safety programmes. When a significant number of vehicles are uninsured and/or unlicensed, the levy can be added to the price of fuel and collected alongside fuel taxes and excise duties.

Click here to see examples of countries that finance selected road safety programmes through levies on insurance or licence fees.

Private sector contributions

The private sector in some instances provides supplementary financial support to selected road safety programmes. In general, they support school-based education programmes, public awareness campaigns - especially related to alcohol and driving, driver training and a variety of demonstration projects. Typically, corporate sponsors operate large fleets of vehicles, supply road safety equipment, or consider road safety as one of their social responsibilities. These contributions do not replace adequate government budgets, but can usefully demonstrate effective initiatives and influence government's priorities.

Click here to see examples of corporate sponsorship of road safety.

Community involvement

Community groups frequently contribute cash or in-kind resources such as volunteers to support school patrols, protect signs and markings, or promote publicity campaigns and cycle/motor cycle training.

Further reading

GRSP Road Safety Management Information Note 3 on Funding gives a number of examples of how road safety funding is raised around the world.

The German GTZ published 'The Road Safety Cent – Management and Financing of Road Safety in Low-Income Countries' in 2006. This document contains good case studies for fundraising activities in low income countries.