Councils accused over car schemes.
Congestion charging has won many over.
The government's transport advisers are accusing local councils of avoiding schemes which put public transport before cars.
The Commission for Integrated Transport says councils often lack the political will to push through policies that might be regarded as anti-car.
It also claims that money earmarked for improving public transport is often spent elsewhere.
The commission suggests some councils are opting for smaller, less-effective transport schemes rather than opting for more controversial but potentially more successful plans.
Local authorities are pessimistic about traffic levels with 84% expecting them to be worse in their areas in a decade.
The commission found council transport chiefs believed enough money was available but it was sometimes diverted to other troubled departments.
Local politicians need to be brave and decisive - they need to drive forward new projects
Although 78% of transport heads were satisfied with the level of capital funding, 62% were worried money was being diverted to education and social service budgets.
Other concerns were a shortage of staff, lack of the necessary political backing, and the harmful effect of performance indicators.
The commission found half of all councils were falling behind in their local transport plans.
Commission chairman Professor David Begg, said: "This is the largest survey of its type carried out with local authorities and it paints a picture of the harsh realities they face on the ground.
"Local authority budgets are now being set so this early warning comes at a crucial time - they should use the money for transport or they should lose it."
He went on: "Transport schemes that are going to make a difference to our communities can be contentious.
"The public - in particular motorists and shopkeepers - do not like giving up road space to cyclists, pedestrians or to bus priority measures.
"Local politicians need to be brave and decisive. They need to drive forward new projects.
"The early success of London's congestion charging scheme after months of media hostility shows how opinion can change.
"The government needs to develop a robust monitoring system to ensure that local authorities are not only spending their transport allocation where they should but are using it for maximum impact."
A total of 72 local authority officers and 67 council members were questioned for the survey.