Hospital-funded traffic improvements in Headington are being held up by council red tape.
The John Radcliffe, Churchill and Nuffield Orthopaedic Centre have handed over nearly £370,000 for public transport and roads, as part of planning agreements.
But NHS managers are frustrated that administration problems between Oxford City Council and Oxfordshire County Council have halted the work, including new bus routes, bus and cycle lanes, a park and ride service, better pedestrian footpaths and road crossings, and residential parking zones.
The Oxford Radcliffe Hospitals NHS Trust, responsible for the JR and Churchill, is due to expand both hospitals, and to gain planning permission it agreed to pay £3m for traffic improvements over the next five years.
About £200,000 has already been handed to Oxford City Council because building work has started on the Churchill diabetes centre.
The NOC has also paid £166,000 after winning permission to build a new hospital at its Windmill Road site.
But, in November last year, Oxfordshire County Council took back responsibility for Oxford's roads and the city council became unable to use the money.
It is now discussing ways to transfer the funding to county highways officers.
Local elections also held up the Headington and Marston Area Transport Strategy (HAMATS) because councillors could not sit on committees to discuss the proposals.
ORH transport manager David Edwards said: "We have a very good relationship with highways officers at both councils, but it's being hampered and frustrated by these delays.
"Money we have already handed over went to the city. But now, it's the county which needs to spend it.
"It's caused some problems and general legal issues, because councils have to act properly and can't spend money they don't have."
Susie Williams, Oxford City Council's principal planner, said: "We have secured funds for traffic improvements in the past which we're always trying to implement.
"Since November, when the county council took over highways, we no longer have authority to make improvements to the highways.
"We're in discussions with the county and working towards a joint programme of works."
Peter Mann, county council group manager for transport planning, said a number of projects could be finished this year, including a Headington bus service from the new Water Eaton park and ride site, near Kidlington."
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