Council chiefs said the £100m contract is expected to save the local authority £10.2m – or around £1m a year – which will be spent on further road improvements.
Also the deal to run Southampton City Council’s highways division is expected to create 60 local jobs for graduates and apprentices. Between 100 and 120 council staff will transfer to Balfour.
Southampton Highways Service Partnership will start on 1 October 2010 and run until 2020 with the option of a five-year extension.
Council highways chiefs admit the deal will not provide enough additional funding to reverse the decline of the roads, although it will “significantly slow” it down.
The cost of resurfacing all of the city’s 353 miles of road has been estimated at £85m.