How do local authorities set their LTP targets?

In their guidance for the second local transport plans (LTP2) the Department for Transport introduced an incentive system based in part on the targets set in the LTP2 plans and the local authority’s subsequent performance against these targets. Through this assessment the indicative integrated transport block funding for each LTP authority could be modified by between -25% and +25%. This raises a number of questions including how have the authorities approached the setting of targets? Do authorities benchmark targets against their peers? And what types of strategies are employed by authorities in playing the LTP2 game? This paper presents the results of a series of interviews with selected LTP authorities that investigated how transport targets were determined for LTP2. A series of interviews were conducted with a range of people ranging from those responsible for individual targets, heads of LTP, regional government officers, and consultants to those with political control (e.g. councillors). These interviews were used to help provide a perspective on the above questions among others and to develop the questionnaire that was sent to all LTP submitting authorities in March 2006 investigating how they chose their targets for LTP2. The results from this questionnaire are presented and an analysis is provided on the processes used in setting targets in LTP2 alongside discussion of the authorities’ perceptions of how the funding adjustments will affect their authority. The introduction of performance related settlements linked to targets alongside improved guidance for LTP2 has had a marked impact on the behaviour of local authorities in setting targets and far greater thought and sophistication has been employed in setting the targets compared with LTP1. A number of concerns have been raised about the next stages of the game when DfT passes judgement on the plans and targets. It therefore remains t0 be seen whether the reward and penalty scheme actually incentivises authorities to achieve or overachieve against their targets.