Byers warned over '£1bn' underspend

Transport Secretary Stephen Byers was in fresh trouble today after it emerged that millions of pounds earmarked for new road and rail projects are still lying idle in Whitehall.

There are fears the amount unspent this year could hit a billion pounds and will damage the department's bid for extra funds from Gordon Brown's Treasury.

A memo from Mr Byers before Christmas warned his officials he expects them "to make a very significant improvement" in spending in 2002. It points out that the Department for Transport, Local Government and the Regions is programmed to spend around £7.4 billion in the coming year and continues: "I am therefore concerned to ensure that we should be doing all we can to keep under-spending to a minimum."

According to today's Financial Times, Mr Byers has been warned by the Chancellor that he cannot expect any sizeable increase in the next spending round unless he tackles the problem.