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Concessionary Bus Fares

No, I have given way twice and I am mindful of your strictures, Mr. Cook. We could rehearse our Second Reading speeches and raise questions of cost, definition and reimbursement, but I intend to save much of that for Second Reading and Committee stage of the Concessionary Bus Travel Bill. It is clear that concessionary schemes are not simply a subsidy to bus operators. As the Government have said, and as the evidence from a number of passenger transport executives and bus companies shows, reimbursement is made to work on a no better-off, no worse-off basis, which inevitably means that the scheme is revenue neutral in most areas. The level of reimbursement that is offered can be imposed by local authorities, so the ultimate power in terms of reimbursement resides with local authorities. The funding of local government and of free local concessionary bus travel, which will soon be a national scheme, has caused considerable problems. The Liberal Democrat spokesman said that how funding is distributed is more important than how much is spent, but both questions are relevant. Several operators have written to me about the Bill to say that local concessionary and reimbursement schemes have resulted in many of them not receiving the appropriate level of reimbursement for carrying passengers who travel free, or for the investment required to introduce new vehicles or increased frequencies as a direct result of that concessionary travel being offered. Equally, many local authorities have complained that the mechanism for allocating Government resources to cover the cost of local concessionary and free bus travel has resulted in a fairly major shortfall. When local concessionary fares were first offered, my office phoned 15 local councils to inquire whether the proposed extra Government funding would cover the schemes that they would have to introduce in their areas. Only one said that it would. I understand that there were 60 initial appeals, of which 44 are still outstanding, against the level of funding given to local concessionary schemes. It is instructive to look at an example of how some local authorities have been hit. I shall use Christchurch as an example because it has one of the highest percentages of citizens aged over 60—36 per cent. Before the mandatory free scheme, it ran a half-fare scheme that allowed some cross-border travel and travel outside the district, which cost £138,000 in 2005-06. The new scheme cost substantially more, and the Government adjusted the grant to Christchurch by £237,000 from 1 April 2006, but the amount that was needed to enact the new local scheme to meet Government stipulations was £395,000, leaving a deficit of £20,000 for the local authority to pick up. The following year, take-up and usage exceeded expectations by 69 per cent., partly because of local usage and partly because of other people coming in. As a result of the scheme, Christchurch faced a £345,000 hole in its account. Therefore, the issue of how the money is being distributed is of concern. The hon. Member for Manchester, Blackley (Graham Stringer) told us that Greater Manchester has pointed out that although the national allocation was £250 million, only £212 million actually reached local authorities. The history of the scheme is that the Government are clearly putting money in, but not all of that money is covering the full cost of implementing schemes in local areas. The Minister has already claimed that, with the additional moneys that the Government are providing to make the local concessionary schemes and now the national concessionary scheme work, they will provide an extra £1 billion of funding. The £350 million that was made available last year and the £250 million for the national scheme add up to £600 million. I am told that the £1 billion is made up by extra movements in grant funding to local transport authorities. I hope that the Minister will clarify how that money will be delivered and how local authorities will recognise that. Today, we have briefly discussed the hotspot scheme. A number of local authorities are clearly concerned that if the funding for the concessionary scheme does not follow the passenger, there will be a fairly dramatic impact on local council tax payers. It would be worth the Government giving us a clear statement, perhaps before Second Reading, about their thinking on one or two matters associated with the Bill. The hon. Member for Sheffield, Attercliffe (Mr. Betts) talked about his local residents’ desire for trams to be included, but in several rural areas, although community transport or dial-a-ride is the only form of public service transport available, they appear to be excluded from the national scheme. For many disabled people, the ability to travel or to use the scheme will be real only if it applies to their carers as well. I am sure that, like me, the Minister will have had representations from various charities on that point. Does she intend to amend the Bill to allow that to happen? The Government’s policy is relatively rare internationally, in that most countries do not offer 100 per cent. concessionary travel. We should be pleased that we do. We are almost unique in that regard. One reason why other countries do not offer 100 per cent. concessionary fares is because they contain a dead weight loss initially unless the funding is sensitive to journeys. I hope that the Minister will give us further guidance as to whether the pass that will be issued to citizens aged over 60 or to disabled people will have smartcard technology. If such passes will not be available at the start of the scheme, when will they be? In future years, will the subsidy be entirely allied to usage and entirely follow the passenger?