Beneath the tarmac is often the original layer of setts or cobbles. Leaving this intact provides the fine load spreading function of a setted street. If laid properly each sett settles a small amount relative to its neighbour, and the street does not pothole or form deep sunken areas. When a utility company contractor digs down they destroy this load spreading mattress and instead of re-laying it (too expensive in the short term mentality) they dump in granular fill (Type 1).
Having destroyed the puddle clay or cold tar 'seal' that most quality setted streets are laid on the granular fill, usually dumped in without any filter membrane or geotextile reinforcement, can migrate down and outwards in to the soil of the sub grade, with ground water flows (or water introduced by the tar band seal of the repair failing) the fine material is lubricated and pumps with traffic loadings and moves away even more rapidly as a slurry, creating voids and causing progressive and continuous collapse, and never-ending revisits to top up the tar without actually fixing the problem.
Other incompetence includes relaying Cockburn Street with the wrong sort of setts in too loose a bond (the old surface was smooth top setts laid with a high quality of tight joints and a joy to ride down at speed, as I did daily when commuting by train to Glasgow, and the rapidly re-done cross-roads of High Street and Bridges where the new bond was laid parallel to the bridges and rapidly fell apart before the original and proper 45 degrees pattern was restored.