By Daniel Hunter

Government could be getting 2.5 times the return on transport investment if it gave local authorities more freedoms and funding flexibility to transform Britain's ailing network and drive forward economic growth, ministers will be told at a summit today (Wednesday).

A new report by Localis, commissioned by the Local Government Association, recommends the abolition of the Highways Agency, which sometimes over-prices schemes or vetos them based on overly-simplistic projections of increased congestion.

It argues it should be replaced with sub-regional bodies which better know their areas, a model which has been successfully rolled out in Germany and Spain.

Another issue is the existing wasteful plethora of transport funding streams. Ahead of next month's Budget, the LGA is calling on the Chancellor to roll these into one 'pot' to which councils can apply to invest in transport and infrastructure projects.

Of the many billions of pounds invested in transport each year, the vast majority is currently held and allocated centrally, with councils only receiving about 10 per cent.

However, locally-developed schemes have demonstrated the ability to provide a much better return on investment. Typical ‘value for money' business cases for transport investment provide a return ratio of at least 2:1 — £2 back in economic benefits for every £1 spent. However, a National Audit Office analysis of local schemes found that more than a quarter had a ratio of 5:1.

Pioneering projects in Barcelona and Munich have seen national governments devolve funding to local authorities and give them greater autonomy to make decisions. This has reaped huge benefits, including greatly increased quality, integration and use of public transport, local economic growth and reduced pollution.

On top of the UK's central funding is a wide range of other transport-related funding streams to which councils can apply, with the associated bureaucracy. Last year, Lord Heseltine recommended the creation of a single pot of local government funding to bring together the myriad of existing streams to avoid duplication and waste.

The report — The road to growth: The case for greater local influence over transport — is being launched today at an LGA Town Hall Summit on transport devolution which is being attended by Transport Minister Norman Baker.

Cllr Peter Box, Chair of the LGA's Economy and Transport Board, said: "The Government's taken some positive steps in devolving decision making on transport to local areas, but to harness the full potential of our national and local networks it needs to fully release the reins. At the moment, investment and innovation is being stifled by a burdensome top-down approach by the Department of Transport and Highways Agency and a confusing and wasteful myriad of different funding.

"Local authorities are already showing they can get far more bang for their buck with transport spending. They're best placed to manage and invest in roads and integrate buses, trains, trams, cycling schemes and so on to suit the diverse needs of businesses and communities.

"As well as reducing congestion and pollution, good transport networks are essential to growth. They link people to jobs, supply businesses with what they need and are the lifeblood of domestic and international trade. In the short-term, investment also creates construction and supply jobs which would give a real shot in the arm to our flagging economy."

Alex Thomson, Chief Executive of Localis, said: "The report highlights some of the alternatives to a centralised transport system, with Europe far in advance of the UK in this respect. On the continent, transport devolution is seen as a given. The current Government has been very positive in pursuing a localism agenda across a number of policy areas, and it is time they extended this approach to transport.

"With transport being an essential part of stimulating and maintaining thriving local economies, greater local influence over commissioning and new flexibilities around infrastructure finance are needed if the Government wants to empower local authorities to get Britain growing again."

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