Select Committee on Transport Eleventh Report

9  Concessionary fares

77. The Transport Act 2000 amended the legislation covering concessionary fares in England and Wales from 1 June 2001 outside London and 1 April 2001 in London. Local authorities must provide pensioners[87] and disabled persons with at least a half-fare concession on local bus travel. Free off-peak local area bus travel was introduced in England from April 2006 for those over 60 and the disabled. In his 2006 Budget speech on 22 March the Chancellor announced that, from 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.

78. The legislation provided a minimum concession but did not preclude local authorities from being more generous. Local authorities have discretion to offer further concessions on bus and other public passenger transport services if they wish under the Transport Act 1985 and the Greater London Authority Act 1999. As a result the nature and extent of such concessions vary from region to region depending on the local authority.

79. The Department estimates that the complexity of the arrangements in England brings authorities' total costs for administering the scheme to some £16 million (equivalent to around five per cent of spending on concessionary fares), compared with an estimated cost of £0.5 million in 2004 for the national administration of the Bus Service Operators Grant (equivalent to less than 0.2 per cent of expenditure on these grants). Operators will also bear considerable costs from separately negotiating reimbursement reflecting their fare levels and passenger numbers with the authorities in each area in which they operate.[88]

Target groups: pensioners and children/students

80. There was consensus amongst witnesses that concessionary fares had encouraged more pensioners to use the bus and had increased ridership, by between 20 and 100 percent on some routes.[89] Mr Joe Lynch, Bus Users UK, told us of the benefits:

    My colleague in Wales, who obviously had the scheme two or three years before England, said this happened [there] at an early stage and there is evidence that is happening but there are social benefits from that as well. It is not just filling up buses, it is getting older people out and about, possibly putting fewer demands on the health service, on social services.[90]

81. This clear success prompted many of our witnesses to put the case for extending concessionary fares to children under 16 and under 18s in full time education, particularly in light of the possible benefits in terms of reducing congestion and car usage during the 'school run'.[91] Bus Users UK made a typical case for extending concessions to the young to 'catch them early':

    How will we encourage young people to continue travelling by bus if we continue to enable them to get a driving licence at 17, but then charge them a full adult fare on the bus? The message is clear - buy a car. If we lose this end of the market, the age of the bus travelling population will inevitably increase and the volume diminish, contrary to the stated government objective to grow bus use.[92]

The PTAs told us that they would welcome the ability to extend concessions to children and students, as well as other groups - such as the unemployed - to promote social inclusion at their discretion.[93] The proposal also received support from Transport 2000 and the Community Transport Association. Mr Tom Wylie, National Youth Agency, told us:

    …the case is essentially a case of social cohesion, economic development, social stability, because this is enabling groups to travel and to use leisure, education and employment; everybody wins. It seems to us just a touch unfair that it should be applied to older people and not be applied to younger people.[94]

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 in practice":

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".[96] 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.[97]

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.

87   The Travel Concessions (Eligibility) Act 2002 equalised the age of eligibility for travel concessions for men and women at 60 from April 2003. The age for entitlement will increase for both sexes between 2010 and 2020 with the phased increase in women's state pension age Back

88   National Audit Office, Delivery Chain Analysis for Bus Services in England, HC 677, Session 2005-06, para 27 Back

89   Mr Warneford, Stagecoach, Q240 Back

90   Q192 Back

91   The Public Accounts Committee came to a similar conclusion in its May 2006 report, para 3 Back

92   Ev 65; similar comments made by ATCO and others Back

93   Qq129-134 Back

94   Q420 Back

95   Ev 240 Back

96   Q335 Back

97   Ev 84 Back

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