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Concessionary Bus Travel Bill [HL]

moved Amendment No. 19: 19: Clause 3, page 3, line 19, after ““journeys”” insert ““, including journeys by residents of other travel concession authorities in England,”” The noble Baroness said: In moving Amendment No. 19 I shall speak also to Amendments Nos. 20, 21 and 40, all of which are tabled in my name and those of my noble friends. These amendments each concern in a different way the issue of how the scheme will be funded, and it is this aspect of the Bill which is giving local authorities most concern. We therefore see this as an opportunity to explore some of the issues they have raised. There are two broad aspects to the question of funding, the first of which asks whether enough money will be available; that is, is the quantum sum to be made available for the scheme large enough? This is vital because there is evidence to show that when you alter the concessionary fares scheme, as happened last year in England and before that in Wales and Scotland, demand increases. In fact it would be ridiculous if demand did not increase. One of the reasons for providing this sort of scheme is in order to facilitate bus travel by pensioners and the disabled. Clearly there will be higher costs and one can only estimate how they are going to work out. We know that more people are now taking up passes than was the case previously and that those who hold passes make more journeys. Further, bus fares are rising above the level of the retail prices index, partly because of industry costs which are rising above the inflation rate. However, we must also recognise that in bringing in a group of people who will not be paying their bus fares, it will alter the way in which bus operators look at fare increases. No longer will they feel so worried about increasing fares because they will not have to deal with irate passengers. That has an inflationary effect. Given this, can the Minister explain how the Government will keep under review the actual costs being met by local government generally, which relates closely to what is happening in the bus industry? Secondly, and probably more important, is the impact of the scheme in specific locations and on specific local authorities. The proposed system for reimbursement is to be via local authority block grant to district and unitary councils. There are two problems with this. First, district and unitary authorities are not usually the transport authorities. In metropolitan councils passenger transport authorities provide bus services, while in two-tier areas they are provided by county councils. There is therefore no requirement for district councils to pass on the sums they receive to the authority providing the service. Secondly, I think it is accepted that the block grant is a fairly crude instrument based on variable inputs such as population and demographics. What it does not measure is the main output; that is, the number of bus journeys made. For the reasons I have given, it is likely that they will increase. The danger is that in areas where high and improving quality bus services are well promoted and provided, demand will increase still further and in a sense those authorities are going to be financially penalised for increasing demand for bus journeys. We know that this happened in the past when the scheme was introduced on a local authority basis. I gave some examples at Second Reading such as in Tyne and Wear, and in Bath and North East Somerset which is currently facing a shortfall of around £680,000—a lot of money for a relatively small local authority. Devon County Council faced a shortfall of around £2 million. We have to recognise that the impact of the scheme in certain areas will be greater and cannot be dealt with in the average way. So while we welcome the fact that the scheme is to be extended into a national one, something wehave called for, there will be difficulties in some areas which can only be described as honey pots, those in which extra journeys will be created. I know that authorities such as Blackpool are rather worried about this issue. Local authorities have only two ways in which they can deal with a shortfall in their funding. Either they can raise council tax—which is clearly not entirely desirable, and of course they face capping to prevent them from raising it too much—or they can make cuts in services. What usually happens is that a local authority will not cut other areas of service provision in order to pay for concessionary bus fares. They are more likely to make cuts in spending on public transport. That means cutting highly subsidised services in rural areas, Sunday services or evening provision. Ironically, concessionary fares are provided for a higher number of people but they will have fewer bus services on which to use them, while of course those without concessions are heavily penalised because there are fewer services available. Broadly these are the financial concerns which local authorities are raising, and one way or another they are all covered in the amendments in this group. While technically the amendments may not be perfect, I am sure the noble Lord understands that they are a mechanism to use in Grand Committee to air these concerns. I beg to move.