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Drivers claimed more than £3m compensation for pothole damage in Britain last year, with the number of applications to councils going up, a survey by the RAC Foundation suggests.

Nearly all local authorities responded to the poll, which found the most claims were in Surrey, Essex and Kent.

But less than a quarter of the 48,664 applications resulted in a payment.

Ministers highlight the £4.7bn provided for roads in England since 2010 but the RAC says more funding is needed.

The Freedom of Information requests by the RAC Foundation into the claims made in the 2013-14 financial year generated responses from 200 out of 207 local highways authorities in England, Scotland and Wales

According to the RAC Foundation, there was an increase of 2,525 claims on the previous year.

The total value of successful claims was £3.2m, with an average payout of £286, down from £357 in 2012-2013. The RAC Foundation also said that each claim, even those which were not successful, cost £147 in administration charges.

Source: RAC Foundation

Prof Stephen Glaister, director of the RAC Foundation, said: "Many drivers will be put off by the time involved in claiming against a council, and many councils do their best to deter claimants coming forward."

He suggested roads - not the high-speed train project HS2 - should be top of the government's transport spending list, because they were a "vital infrastructure network" where the majority of journeys took place.

Prof Glaister added: "The fundamental problem lies not at the doors of our town halls but with central government. Despite occasional one-off grants related to periods of harsh weather, they are simply not giving councils enough money to keep their road networks up to scratch."

The RAC said government cuts had led to a real-terms fall in spending on roads.

Labour's shadow transport secretary Michael Dugher said the RAC Foundation survey showed the "desperate state our local roads have got to under David Cameron".

"Hard-pressed road users and businesses are justifiably sick and tired of having their vehicles damaged because of Britain's pothole crisis," he said.

A Department for Transport spokeswoman said: "Good local roads are vital for our transport network and it is for local councils to maintain them properly...

"As part of our long-term economic plan, we will also spend a further £6bn between 2015 to 2021 providing councils the certainty they require to plan how they will keep their roads well maintained."