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Concessionary Bus Fares

I assure you that I shall take up no more than my allocated time, Mr. Cook. I, too, congratulate the hon. Member for Manchester, Blackley (Graham Stringer) on securing a debate on this important subject. As he rightly said, the measures have almost universal support across political parties and the general public. The hon. Members for Sheffield, Attercliffe (Mr. Betts) and for Tyne Bridge (Mr. Clelland) and my hon. Friend the Member for Cheadle (Mark Hunter) all mentioned the serious issue of the potential shortfall in funding, and I shall concentrate my remarks on that. However, I also urge the Minister to respond to the concerns of my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) about cross-border arrangements, which are clearly important for Members near the borders with Scotland and Wales. In his 2006 Budget speech, the Chancellor announced that, from 1 April 2008, 11 million over-60s and disabled people in England would be entitled to free off-peak local bus travel in every area of the country, and the Concessionary Bus Travel Bill will legislate for those changes. Free bus travel will be available to those who are eligible from 9.30 in the morning until 11 at night on week days and all day at weekends and bank holidays across the whole of England. Local authorities will still be able to offer residents additional benefits, such as travel before 9.30 am, concessions on other modes of transport such as trams and tokens for use on taxis and community transport. The Liberal Democrats welcome the proposed extension of the national fares concession, but we are concerned that the Bill as it stands simply contains enabling provisions, rather than details of how the funding mechanism will work. Questions remain over whether councils and passenger transport authorities will face any financial risk in administering the programme. The issue is as much about how funding is distributed as it is about the total amount of funding. For example, under the earlier scheme for local free travel, which came into force on 1 April, a number of councils, including in Tyne and Wear, experienced severe financial impacts as a result of the administration of the funding distribution regime, and those problems have still not been fully resolved. The hon. Member for Tyne Bridge noted that his local PTA is about £5 million down, and any PTA or local authority would have serious problems with the cuts to services to which that might lead. The worry is that while problems remain unresolved from the first time round, the more complicated national scheme may bring even more. Council tax payers should not have to pick up the tab for a poorly managed and administered national scheme. The present scheme is funded through the local authority block grant system, which is very crude and bears no relation to the numbers of concessionary fare bus travellers. That is why the Liberal Democrats support the inclusion in the Bill of the opportunity to introduce a smart card system, along the lines of what has been introduced in Scotland. That system would provide not only a method of buying tickets, but, more importantly, a measure of bus use. It would therefore facilitate a much better method of distributing money to operators by ensuring an accurate link to the number of passengers carried. Some local authority areas are already introducing smart cards, so it is vital that all should adhere to a national standard that will make integrated ticketing and funding possible. Unfortunately, there are potential problems with the current proposals. In areas with large numbers of visitors aged over 60, there will be additional pressures, as current funding arrangements do not take into account journeys made by visitors—only those taken by residents. Where there are high numbers of visitors, the level of bus use by the over-60s will be higher than average. If the funding formula does not reflect that, local taxpayers may pay for holidaymakers aged over 60 to use buses free. The problem is that no one really knows how many additional journeys will be created, or where. There is a notable lack of research or data held by the Government on visitor numbers and, consequently, on the likely impact on bus use in areas more likely to be visited by the elderly. Figures on the age of visitors and on the likelihood that elderly visitors will use local bus services are not readily available. However, the raw figures on visitor numbers are a useful pointer to the areas that might experience significant increases in bus travel. For instance, London is clearly at the top of the table, but interestingly Blackpool is second and my own authority, Manchester, is in third place. It is not only seaside resorts that will feel the impact. Research needs to be done to find out the number of visitors, by age, in each local authority, their current bus use and the likelihood that those people will use bus services once they are free. There should also be provision in the Bill for an eligible journey to be extended on to another mode of transport, where that is considered appropriate. My Liberal Democrat colleagues in the House of Lords have raised the matter of Croydon Tramlink, which for part of its journey from New Addington to Croydon is a substitute for a bus service that was withdrawn. That substitution will prove to have been very unfair, if the journeys are not included in the free scheme. Similarly, on Merseyside a number of journeys from Birkenhead to Liverpool will include a ferry journey, but at the moment such journeys will not be included in the scheme. The original 2006 scheme received £350 million of funding, but the distribution system to councils, through the revenue support grants, has not covered costs, and some councils have lost out. Those councils have had to cut subsidised bus services, increase children’s bus fares, use reserves or increase council tax to fill the funding gap between the Government grant and the actual cost of free bus travel. Serious annual shortfalls have affected, for example, Tyne and Wear, Devon county council and Bath and North East Somerset council. The extended scheme for 2008 will receive an additional £250 million in Government funding, but the Government again propose to distribute that by a revenue support grant formula. Recently, in January, the Local Government Association regeneration and transport board discussed that serious issue of funding. It has argued for a more transparent system of distribution of funds, preferably by way of a direct ring-fenced grant to local authorities that are transport authorities. It has also suggested a safety net of money top-sliced from the Government’s £250 million to prevent local authorities from incurring unintended deficits and extending the fares-free concession to tram and light rail, local heavy rail, local ferry services and community transport. Unfortunately, the Government rejected all those proposals in the House of Lords Grand Committee debate. There is a danger that unless a system is devised to ensure that each journey is paid for, some local authorities and passenger transport authorities will be short-changed. No one really knows what impact the national extension of the concessionary scheme will have on the take-up of free journeys. We do not really know how many people will decide to go on a day trip from Manchester to Blackpool by bus, which is why it is vital that resources should be directed to the areas where journeys are created. The sensible solution is a smart card system that will log every journey and allow direct payment to be made to the bus operators, ensuring that no local authority will be left out of pocket and have to make up a shortfall.