An extra £100 million is being spent to fix damage to roads caused by the harsh winter. But the AA tells Channel 4 News "this is the chickens coming home to roost".
The funding is in addition to the basic £831 million that the department is spending on road maintenance this year and £3 billion committed over the next four years.
Transport Secretary Phillip Hammond said in a statement: "Millions of motorists have their daily drives ruined by potholes and the awful winter weather we had this year is only going to make that problem worse. This money should make a real difference to the millions of drivers who are fed up having to continually battle against dangerous potholes."
A recent poll of AA members showed that 81 per cent thought that the condition of the country's roads had deteriorated significantly over the last three years, with 57 per cent of respondents saying they were "significantly" worse.
At the AA, a spokesman told Channel 4 News: "This is the second year the Government has bailed out local authorities. This is the chicken coming home to roost because there hasn't been sufficient investment in road upkeep and going back and filling in holes isn't the best use of money."
He said local authorities have responsibility for keeping the highways in good condition: "A number of authorities have used potholes as a reason to push up parking fees. It's unfair on lower income families who have to pay for parking permits while richer people have off-road parking. Roads have been the cinderella of local authority spending."
Graeme Hay, Wiltshire Council's highways engineer said: "We spent a lot of the summer resurfacing the county's roads so they were in a much better condition to cope with this winter's weather."
During January of this year there were 379 potholes counted each week, but over the same month in 2010, highway crews were filling between 400 and 500 holes a day.
Duncan McClure Fisher is managing director at insurance company Warranty Direct and runs a website, Potholes.co.uk
The website encourages people to claim for damages to their cars caused by potholes. He says that potholes are becoming increasingly costly for local councils, as motorists understand how to file a claim. He told Channel 4 News: "We have seen an increase in the number of potholes reported on the website - up 40 per cent over the year of 2010. We are not trying to encourage litigation, the timeframe for legal responsibility is set from when the a pothole is reported to the council."
He said that unless potholes are reported, the Council can't be blamed if they cause an accident: "Drivers are not reporting potholes to the council and really people need to take responsibility. A lot of the problem areas are residential or country roads that don't get inspected more than once a year."