Suggestion would allow government to divert money earmarked for new roads to rail and other public transport

A rendering of the Lower Thames Crossing junction with the M25 in Essex, a project that campaigners have criticised. Photograph: Highways England/PA

Campaign groups have urged the government to cancel major road building schemes including the Lower Thames Crossing, amid growing speculation that ministers could divert money earmarked for new roads into rail and other public transport.

The transport secretary, Louise Haigh, is due to decide in a week whether to sign off a development consent order [DCO] for the £9bn road crossing linking Essex and Kent.

Labour has already made clear that it is looking to fill what the chancellor has described as a “£22bn black hole” in the nation’s finances.

While Rachel Reeves has said she backs building infrastructure, the road schemes are poor value for money according to Treasury calculations, and could free up funding for rail projects.

The campaign groups have both highlighted huge savings from axing parts of what the Conservative government had billed as the biggest road building scheme in a generation when it launched its road investment strategy a decade ago.

The Campaign for Better Transport said the government could save £10.5bn from cancelling the Lower Thames Crossing along with the A66 Northern TransPennine upgrade, a project championed by Rishi Sunak.

Reeves has been considering private finance options to fund the construction of the crossing. The chancellor cancelled two significant and long-planned road schemes on taking office in July: the duelling of the A303 with a new tunnel at Stonehenge, and the A27 Arundel bypass.

Haigh is also conducting a review of the Department for Transport’s (DfT) capital spending, ahead of the October budget, having announced that she had inherited almost £3bn in unfunded commitments at the DfT.

The Transport Action Network last week submitted a report to Haigh recommending 16 schemes to be axed or paused, with a total value of more than £15bn.

Comments by the rail minister, Lord Hendy, in a parliamentary debate and in a video address at the Labour party conference suggested that spending across all transport modes would be reviewed against each other – potentially diverting road funds to rail.

In a letter to Haigh, the campaigners urged her to cancel the “large and unnecessary” road projects, by not granting a DCO for the Lower Thames Crossing on 4 October, and to revoke DCOs already signed off for road building by the previous government.

They argue that rather than increasing road capacity for lorries, the government should spend money on maintaining and repairing Britain’s existing, pothole-ridden roads, and on upgrading rail freight routes – freeing up road space for a fraction of the cost.

National Highways argues that its planned 14-mile, six lane road tunnel under the Thames is needed to meet the demands of traffic east of London, where the Dartford Crossing’s tunnels and bridge are struggling to cope. It estimates that congestion on the existing crossing costs the UK more than £200m a year.

However, Michael Solomon Williams of Campaign for Better Transport, said: “Spending £9bn on a road that can’t even carry a bus is utterly nonsensical and if approved by the transport secretary would completely undermine the government’s net zero commitments. Building new roads doesn’t cut congestion, it does the opposite.

Chris Todd, the director of Transport Action Network, said: “If we are to improve productivity and kickstart growth we need to make sure we’re investing in infrastructure that delivers. Many schemes in the roads program simply don’t, they make things worse. We need to repurpose that funding to drive modal shift, accelerate decarbonisation, protect nature and improve health and wellbeing.”

Among proposed rail freight schemes are upgrades from the Channel tunnel to Wembley that would allow rail freight trains to run directly from Europe to the Midlands; and electrification of 60 miles of track that would enable electric trains to run to London Gateway, Felixstowe, and Liverpool’s Seaforth ports, and terminals in Leeds and Birmingham, which together would only costs £142m.

Maggie Simpson, the director general of Rail Freight Group, said: “Investing in rail freight is key to meeting government’s targets for economic growth and climate change … keeping HGVs off the road and reducing transport carbon emissions.”

The DfT was approached for comment.