Spending watchdogs have warned that cuts to local authority budgets could lead to a drop in highway maintenance standards.
The National Audit Office (NAO) said obligations on councils, such as paying for subsidised bus fares, meant spending on highway maintenance was "likely to fall".
In a report on the funding of local transport services, the NAO recognised that funding from the Department for Transport had "remained stable" following the 2010 spending review.
It added: "However, there is a 28% real-terms fall in grants from the Department for Communities and Local Government over the spending review period (up to 2014-15).
"In transport, this includes payments to bus operators to reimburse them for statutory concessionary fares, a cost largely beyond the control of local authorities.
"This means that funding available for other areas of local government spend, including routine highways maintenance, is likely to fall."
The report added: "Against the background of reduced and sometimes uncertain central government funding, the local authorities that we spoke to said that they are having to prioritise and reduce their expenditure on transport."
This risked worsening the quality of roads, the watchdog said.
John Wilkinson, Managing Director, Public Sector Services at May Gurney said: “Councils are under severe pressure to cut costs, but our work with Surrey proves that by working in partnership with private sector specialists, local authorities can achieve significant savings without compromising on quality of service.
“If the quality of frontline services is to be maintained councils need to devise more efficient ways of working.
“May Gurney has achieved great success working with our partners Surrey County Council in helping secure more than seven million pounds worth of savings in its highways contract.
“The significant savings have been achieved by simplifying the road repair processes through more efficient work planning and doing work right first time. May Gurney has also helped to develop a new fault reporting system, that allows road users to report and track problems, providing transparency and accountability for Surrey County Council, local residents and businesses.
“We have also embraced new working patterns including reducing the administration around road repairs and empowering crews to use a common sense approach to making minor repairs, through ‘seek-and-fix’, allowing crews to fill pot holes as they find them, rather than having to report the problem and then wait for a works order.”
