Luton Borough Council has to spend the £1.2m grant from South East Midlands Local Enterprise Partnership (SEMLEP) by the end of next month (March) or risk losing the money.
The funding would go towards the £3.2m dualling of Vauxhall Way.
Liberal Democrat group leader and Barnfield councillor David Franks has said the grant should “be sacrificed to enable the plans to be thoroughly thought through”.
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Now he has tabled a question to SEMLEP at a meeting of the local authority’s scrutiny finance review group.
“Would you please explain how the scheme passed SEMLEP due diligence and audit processes and how an investment of £1.2m of taxpayers’ money has been justified?” he asked.
“The lead councillor and key officers all say the Vauxhall Way/Stopsley Way/Hitchin Road project has serious problematical implications for junctions, such as the Birchen Grove/Hitchin Road one,” said councillor Franks.
“These are issues they do not know how they will be able to solve.
“The scheme does not include a landscaping plan and was opposed by a huge majority of those who responded to the public consultation exercise.
“No evidence has ever been presented to indicate a robust business plan has been approved.”
The review group looked at the way Luton Borough Council monitors and is accountable for the activities and spending of SEMLEP, according to councillor Franks.
It gives government funded grant contributions of taxpayers’ money to major capital projects, he explained.
“As there was no SEMLEP representative present, I was unable to question them.
“But I asked the question anyway. The finance officers replied they were unable to answer questions on individual projects, but would pass the question on to SEMLEP and let us know what they say.”
The development began in August, and involves replacing the roundabouts at each junction along Vauxhall Way with traffic lights.
It was stopped after some initial preparation work when residents and local councillors complained they had not been consulted about the proposals.
Councillor Franks told the executive previously that “the serious problem here is the project for which you are borrowing the money is not complete”.
He said: “The fear is that Luton will end up with a worse scheme than if the whole programme had been thought through properly before you started it.
“If that means you lose the £1.2m grant, that’s a relatively small price to pay if end up with a properly thought through ideas which really work.”
Labour South councillor Paul Castleman said the project came about through the planned development of the east of Luton and the planning application to grow Luton Airport to 18m passengers annually.
“The full landscaping plan is not required as part of this (first) stage of the project,” he had explained to the executive.
“It is the second busiest road after New Airport Way,” added councillor Castleman, executive member for infrastructure and transport.
“It’s definitely a busy road and busy junction, and we do need to tackle congestion there.”