Devolution of transport funding to Local Transport Bodies (LTBs) could put national and regional investment objectives at risk, the Public Accounts Committee (PAC) has warned.

In a report examining Department for Transport funding for local transport it says: “We are not convinced Government has thought through the risks of devolving more control over the funding of major transport projects to a local level. For example, the DfT is confident that local bodies will naturally cooperate to fund and implement projects. We believe this confidence may well be misplaced.”

DfT’s local transport budget will be devolved to 38 LTB areas outside of London from 2015 and will mark an end to funding of local major transport schemes under a central bidding process. Distribution of money between different areas will instead be on a per capita basis and major schemes will rely on cross area cooperation and developer and business rate contributions.

“But there is a risk LTBs, in a period of substantial funding pressure, will not take sufficiently strategic and joined up decisions, putting national or regional investment at risk,” the committee warned.

The committee said it expected the department “to work with local bodies to identify risk areas, design ways to encourage collaboration and to pilot its proposed approach before it is implemented”.

The committee also highlighted that the £1.2Bn allocated to local authorities for highway maintenance and transport projects was not ring fenced and that DfT does not monitor whether it is actually spent on transport or achieving its intended purpose.

“Local authorities are facing significant budget cuts but the department does not have the information to assess the impact on transport services or to make comparisons between local areas to identify councils that are underperforming,” said PAC chair Margaret Hodge.

“It is also unclear how the department would identify a failure or unacceptable deterioration in services or when and how it would intervene,” she said.

(Photo: Alan Murray-Rust)

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