In Dorset, Liberal Democrat councillors, who now control the council after a century of Conservative rule, are considering scrapping several schemes in order to transfer money to education and social services.
Under the rules, the Government allocates a transport supplementary grant (TSG), which is principally for road schemes, on the basis that it covers half the cost, with the rest coming from council funds. Counties now seem prepared to cut back on road building, even if it means losing these grants.
In Oxfordshire, a scheme to build a pounds 7m bypass around Woodstock has been rejected by the county, amid accusations that the Department of Transport is trying to blackmail the council into building it.
When the Dorset Liberal Democrats were in opposition last February, they put forward an amendment to the budget asking for half a dozen road schemes to be dropped in order to boost the education budget, but this was defeated by the then Tory majority. Now that they are in power, they are suggesting cuts to the road building programme in order to channel more money to education and social services, even though only half the cost of a road scheme becomes available for allocating to other departments.
Trevor Jones, the chairman of the county's policy and resources committee, said: 'Some of the schools in Dorset are dropping to bits. They are a disgrace in a civilised society. You can defer road schemes, but not a child's education.'
But there is resistance from the county's engineers. Mike Chaney, Dorset's press officer, said: 'Our engineers are not happy about it. What do engineers do except to spread concrete over everything? That's what we pay them for.'
In Oxfordshire, which is now evenly balanced between the three major parties, earlier this month Liberal Democrat and Labour councillors combined to vote down the Woodstock scheme. Now the council faces the risk of losing grant for other schemes.
The Department of Transport has written to the council saying 'if Oxfordshire reinstated a modified Woodstock bypass in their programme, the Department would look with greater confidence on their proposals for future TSG schemes'.
In Woodstock, the council wants to build traffic calming measures instead of the bypass and because of capping limits on its budget imposed by the Government, it wants to avoid having to spend the pounds 500,000 a year it would cost to maintain the road and pay off the debt. This implies that a scheme to remove cars from Oxford's congested city centre, while improving public transport, cycling and pedestrian access for which the council hopes to obtain TSG, may be jeopardised.
The Department of Transport has begun to recognise that its emphasis on roads is not always welcomed by local authorities. TSG used to be payable only for road schemes but, from next year, following pressure from councils, it will be possible to use it for other transport projects.
However, only schemes that cost pounds 2m or more will be eligible for grant. Liam Tiller, Oxfordshire's chief planning officer, says: 'This limit means it will be difficult to get money for anything other than road schemes.'
He said there had been a 'sea change' in attitudes among local authorities about transport.
'Everybody used to be keen on road building, but the experience of the M25 has changed that. We were told that the M25 would solve all our problems, yet no sooner is it finished than they are trying to double the number of lanes. Now counties are looking at trying to manage the traffic growth, rather than building more roads.'