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Pensioner Travel (Tyne and Wear)

I should start by paying the usual tribute to my right hon. Friend the Member for Newcastle upon Tyne, East and Wallsend (Mr. Brown) for securing the debate and raising a matter that is extremely important to his constituents and those of other hon. Members in the Chamber. I have a useful opportunity to explain how we support services via the formula grant. My right hon. Friend is obviously especially concerned about the distribution of funding for free bus travel for pensioners in Tyne and Wear. Before looking in detail at the process, it is worth reminding ourselves of the substantial social benefits that will be delivered by the Government initiative on concessionary travel. The need to meet the transport requirements of a growing population of older people is vital to the success of the Government’s commitment to sustainable mobility and to people’s ability to retain a high quality of life as their income, health and mobility levels change. Despite the rising number of older driving licence holders, declining driving ability and financial constraints mean that many motorists will have to adjust their driving practices, and probably ultimately give up their car. A high proportion of the older population will be dependent on public transport. However, evidence suggests that many will experience difficulties in using bus and rail services. For the first time, in 2006–07, we have announced two-year grant allocations for every local authority in England. We have put a premium on the stability and predictability of funding, so that councils can plan ahead for better service delivery. The first three-year settlement will be introduced alongside the next spending review round commencing in 2008–09. In the interests of further stability, we have made grant floors a permanent part of the grant distribution system. Floors guarantee a minimum year-on-year grant increase for all authorities and increase local authority confidence in planning for the medium to long term. Tyne and Wear, to which my right hon. Friend referred, has benefited from the extra money that we have provided in recent years to the local authorities, which have invested in improving local services—for example, reducing antisocial behaviour and providing more support for vulnerable people in Newcastle, developing healthy communities in Gateshead, and supporting carers in Sunderland. For the 10-year period to 2007–08, we have been able to provide Tyne and Wear metropolitan district councils with an average annual increase in general grant of 4 per cent. in cash terms. For 2006–07 and 2007–08, the grant increases going to Tyne and Wear district councils are £14.7 million and £14.8 million respectively, or 2.8 per cent. in each year, running ahead of current inflation. Additional transport funding for Tyne and Wear has also come through the local transport plan and Challenge funding routes. We have provided £12.9 million for concessionary fares above last year’s grant, and £1.7 million for the Metro transport system. Capital funding to enable implementation of its local transport plan is allocated by my right hon. Friend the Secretary of State for Transport to the Tyne and Wear authorities, mostly in the form of supported capital expenditure—revenue—or SCER, as my right hon. Friend the Member for Newcastle upon Tyne, East and Wallsend knows. The allocations are determined primarily by formulas reflecting transport need and adjusted to reflect the quality of the local transport plan and the progress made in implementing the plan. A single allocation is made for Tyne and Wear, which is distributed among the authorities in accordance with their wishes. The allocation for 2005–06 is 68 per cent. higher than for 1999–2000. As this is capital funding, it cannot be used directly to support the cost of concessionary fares. However, this high level of central Government capital support releases local authorities’ own funding to support other initiatives in accordance with local priorities. Since 1998 Government have provided Nexus, the Tyne and Wear transport executive, with more than £7.7 million funding specifically to support the operation of a number of bus services through the urban and rural bus Challenge and Kickstart programmes. Funding for concessionary fares is supported through formula grant.