Reimbursement system for operators
82. Bus operators and PTAs disagreed about whether
the reimbursement system for operators from the concessionary
scheme financially benefits them or not. The Passenger Transport
Executive Group told us that the 'no better off, no worse off'
principle for operator reimbursement "has become meaningless
We do not know what fares and ticketing offers
operators would choose to introduce in the absence of a statutory
scheme, but we would strongly contest the assumption
[operators] would charge full adult single fares for this highly
price-sensitive group of passengers.
83. The operators are insistent that they do not
make money from concessions. For example, Mr Huntley, Go Ahead,
insisted that "the local authority absolutely discounts the
amount it gives us
They are already reclaiming from us
more than half of the fare to allow for the growth in pensioners,
so that is not a subsidy".
National Express told us that in the West Midlands:
the concessionary fare payment made by
Centro is a subsidy to the passenger and not to the operator.
The operator receives payment for the fare the OAP would have
made less a discount factor. Thus [Travel West Midlands] actually
receive approximately 66p for every £1.20 ticket that would
have been sold to a concessionary fare passenger.
84. The concessionary fares system in England
is a mess. The Government requires local authorities to provide
a minimum concession without providing, in the view of many authorities,
sufficient funds to do so. The Government plans to put concessions
for the over 60s and disabled people on a national footing in
2008. This does not however mean that concessionary national travel
will be permitted, just that there will be a uniform minimum standard
for all local schemes. It is not clear how this will be administered
or even if the amount of funding the Government has announced
for the scheme will be adequate. We seek reassurance from the
Department that they have begun work on determining how this important
policy will be introduced and administered.
85. There is clearly a problem with the way concessionary
fare monies are distributed to local authorities. Neighbouring
authorities can be at the opposite end of the spectrum - one having
plentiful resources to provide a full concessionary service; the
other having to cut back other services to pay for concessions.
This needs to be fixed, perhaps by the Department or the Treasury
administering the proposed national scheme from 2008.
86. Concessions for pensioners clearly promote
bus use. Indeed, ridership in many areas may have increased by
the end of 2006 thanks to the extension of this scheme.
87. It is right that minimum statutory concessions
are currently targeted at disabled persons and the over 60s. There
is however a case, made by many witnesses, for an extension of
the mandatory concession scheme to the under-16s and others in
full-time education. Concessions for children to use buses to
and from school would cut down on the school run and for those
in full-time education might cut the numbers of 17-25 year olds
who learn to drive and buy a car as soon as possible. A good experience
using buses when young could also influence travel choices later
in life. Local Authorities must always have discretion to provide
higher than minimum standards.