The new Bill, which was announced as part of the Queen's speech, backs current legislation which enables local authorities to fine utility companies up to £2,000. This is expected to increase.
Edmund King, executive director at the RAC Foundation, said: 'For too long utility companies have been given a free hand to dig holes in the road and have given little consideration to extensive and expensive traffic delays that result.
'This new legislation will hopefully redress the balance in favour of road users and pedestrians who suffer unnecessary delays because of over-running road works.'
Under the new Bill, utility companies will have to obtain written permission before they complete any disruptive road work and, if deemed necessary, the Government could prevent them from going ahead.
Companies could also be charged if property such as skips or scaffolding obstructs the road, preventing traffic from flowing.
Recent studies from the Department for Transport looked at the effectiveness of current legislation, section 74 of the New Roads and Street Works Act, in reducing disruption. It found that utility companies were in some cases exaggerating the duration of road works by up to 50% in a bid to avoid fines. Some companies were also found to be completed sub-standard work.
King said: 'The latest research shows that the current system is not working efficiently. This tougher legislation will act as a catalyst for better co-ordination.'