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Concessionary Bus Travel Bill [HL]

The real issues are being joined here by noble Lords who, I am conscious, have far greater experience of local authority finance than I have enjoyed. I am very grateful to the noble Lord, Lord Bradshaw, for his contribution. When I was struggling with the issue of how far we should extend the scheme, I automatically assumed that his preserved silence was one of assent for the government position, because I always assume silence on the part of opposition parties as assent to what the Government are doing. I know that we have got it just about right if they are quiet. I am now grateful that he has reinforced that impression. We must tread with care on the question of how extensive the scheme is to be, because it must be properly funded. That is why I resisted earlier amendments; I was anxious to guarantee that we are working within the means available. We are confident in broad terms that the £1 billion that we will be spending in total on concessionary fares will be sufficient to meet all demands in the system. The extra £250 million related to the Bill includes provision for increased pass take-up—the noble Lord, Lord Bradshaw, made the point that there are early indications of the enthusiasm with which people who are qualified will take advantage of the new opportunities—and assumptions about costs and fares. I heard what the noble Baroness, Lady Scott, had to say about the increased cost of bus fares, but we think that we have taken those adequately into account. I respect her point that the impact of free or concessionary travel may be disproportionate for some authorities, which will take much more of the strain than others because of the nature of what they provide and the advantages that concessionary travellers will see of going to those ““honey pots””—I think that that was her term. I have heard Blackpool described in many terms—generally favourable but sometimes unfavourable—but never have I heard it called a honey pot before. On behalf of the good folk of Blackpool, I shall take that as a compliment. We are working very hard to ensure proper collaboration between local government and the Treasury so that when we allocate the £250 million, it takes into account the disproportionate effects. There is no doubt that a national scheme has disproportionate effects on local authorities. I should like to put the issue of local authority funding to bed. Amendments Nos. 20 to 22 seek to ensure that local authorities are adequately funded by central government to provide reimbursement for the national concession. I am aware that issue of local authority funding goes far wider than the scope of the Bill. I bore in mind the point made by the noble Lord, Lord Hanningfield, that he was beginning to think in terms of hypothecation on this issue in relation to local authorities. We are aware that powerful voices will still argue against that for all sorts of reasons, but local authorities will certainly want to be assured that they will be adequately refunded for the costs of operating the scheme, which was the burden of the noble Lord’s remarks. Concessionary fares reimbursement is only one of many obligations that authorities must face, and we know their skill in managing matters in this area. We have made provision for the principles of the Bill to be adequately funded. There is the issue of how the funding should be distributed, but that will involve extensive discussion and collaboration with local authorities and I cannot come forward with a blueprint at this stage. No noble Lord in the Committee would expect me to do that. However, the Committee does expect reassurance over the proportions and difficult funding allocations and that funding should follow the needs. We fully take that argument on board and recognise its importance. Speaking on behalf of the Government, it is in our interests to ensure that local authorities are adequately funded for providing these statutory concessions. Amendment No. 40 drifts into the general issue of how passenger transport authorities are funded by their metropolitan districts. I see no reason why concessionary fares should be different from other aspects of transport policy that a PTA, through its executive, delivers on behalf of the districts of which it consists. The proposed change interferes with a well established and adequate system for funding the PTAs. It is also worth pointing out that under our proposals in the Bill, no PTA would be obliged to agree a joint scheme with a metropolitan district council. If the PTA felt that funding was not forthcoming, it might reasonably refuse to agree to the joint scheme. I can therefore see no reason for changing that mechanism, which has worked in the past. I recognise the challenges posed by the Bill, but they should not create difficulties in this area. On the issue of operator reimbursement, at the moment local authorities are required to reimburse bus operators only for concessionary journeys made wholly within their area. From April 2008, elderly and disabled people resident in England will be able to travel for free on off-peak local bus services anywhere in England. Therefore, the basis on which operators are reimbursed also needs to change. AmendmentNo. 19 is not the right way in which to go about that, and the concern that may have prompted it has already been addressed in the Bill. Section 149 of the Transport Act 2000, as it would be amended by the Bill, will require travel concession authorities to reimburse operators for providing the national concession on journeys beginning in their area. The national concession must, under Section 145, be provided to those holding passes issued by any travel concession authority in England, as well as those issued under the London schemes. Hence, travel concession authorities will already be obliged to reimburse operators for trips begun in their area and made by concessionaires resident outside their area. This approach renders the authority in which the eligible person resides totally irrelevant. This must be right under a national scheme. It also negates the need for unworkable billing arrangements whereby 300 local authorities could be billing each other for trips made by each other’s eligible residents. The whole Committee would react in horror to any such concept. We reacted in horror in advance of the concept being adumbrated in the Committee, which is why we are putting forward these proposals. Amendment No. 20 also calls for a standard scheme for reimbursing the bus operators for all the costs incurred in carrying concessionaires. Current legislation already requires that operators should be no better or worse off as a result of carrying concessionaires. As such, operators are entitled to be fully reimbursed for any additional costs incurred. There are acknowledged problems with the current arrangements for reimbursing operators, which are complex and open to various interpretations, but Clause 3 provides a deliberately flexible regulation-making power so that the tier at which concessionary fares are administered and for which reimbursement is provided could be changedin future years if we felt it necessary to do so. A more standard approach to reimbursement can also be achieved through existing regulation-making powers, whichthe Bill preserves. I can give the Committee that reassurance. We are working with operators and local authorities to put in place revised and more efficient arrangements for the new 2008 concession. It is important that we secure the best deal for the taxpayer and reduce the burden placed on the industry. Any decision to make a change via an order will, of course, be after proper consultation and a regulatory impact assessment. It is clearly premature to adopt the amendment at this stage. It is best to conclude this work by passing the Bill and making any changes through regulations rather than by seeking to pre-empt them, which the amendment would do. The amendments identify with total accuracy the problems of the national scheme that we have to confront and the impact of the scheme on local finances. I seek not to minimise those problems but to reassure the Committee that they have been anticipated effectively and that the Bill provides a framework in which the necessary regulations can work.