holeAs much as £1.2 billion of last year’s designated transport funding from the Department for Transport (DFT) is being spent by local authorities without any oversight, a report from the Public Accounts Committee (PAC) says today.

Of the £2.2billion provided to local authorities for the upkeep of local transport and highway services in 2011-2012, more than half has not been ring-fenced or subsequently monitored, the PAC report says.

According to the report, the DFT does not observe whether the assigned money is spent on transport, and there are concerns surrounding whether or not it ‘achieves its intended purpose.’ Barking and Dagenham MP and Chair of the PAC, The Rt. Hon. Margaret Hodge said: “It is unclear how the Department would identify a failure or unacceptable deterioration in services, or when and how it would intervene.

“The risk is that local transport bodies, under severe financial pressure, will not take sufficiently strategic and joined-up decisions, threatening national or regional transport funding objectives.”

The DFT has allowed local authorities to spend the money on any capital project of their choice, however, with no clear way of controlling cash flow, there is little evidence to support the Department’s contribution to any objectives or spending decisions.

The Department also plans to hand over a higher percentage of financial control to local authorities, increasing from 60 to 80% This has prompted suggestions from the PAC that more ‘transparent’ mechanisms should be put in place to ensure that funds raised from local people is spent on local transport.

Sir Merrick Cockell, Chairman of the Local Government Association (LGA), said:

“The report paints a picture of increasing financial risk and uncertainty for councils which are already dealing with some of the deepest cuts in the public sector.”

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