Previous Section Index Home Page

25 Mar 2008 : Column 132

25 Mar 2008 : Column 133

25 Mar 2008 : Column 134

25 Mar 2008 : Column 135

Mr. Speaker forthwith declared the main Question, as amended, to be agreed to.


25 Mar 2008 : Column 136

Local Government Finance

10.30 pm

The Minister of State, Department for Transport (Ms Rosie Winterton): I beg to move,

The report sets out the extra funding that the Government are making available to local government in England to implement the national concessionary fares scheme—a scheme that means that 11 million people over 60, and eligible disabled people, will be entitled to free bus travel wherever they are in England. Access to effective public transport makes a real difference to many people’s lives. It plays a key role in boosting the economy, reducing congestion, tackling climate change, promoting social inclusion and improving our quality of life.

Buses are the most widely used form of public transport in this country. More than two thirds of all public transport journeys are made on them, and after years of decline the number of bus journeys is now on the increase. There were more than 4 billion such journeys in the UK in 2006-07. Clearly, buses are becoming more and more attractive as a means of travel. They are more accessible for disabled passengers than ever before and there has been good progress in improving the quality of buses, with the age of vehicles decreasing over the last 10 years. The flexibility of bus networks means that they can provide a genuine alternative to the car, not only improving social inclusion, but helping to tackle congestion and contributing to meeting our goals on climate change.

The Government recognise that buses are particularly important for some of the most vulnerable people in our society. They often provide a vital lifeline to services such as shops, leisure facilities and hospitals, and they are an important connection to the community. For many older and disabled people, buses provide a vital link to the places they want to go and the people they want to see. The Government are fully aware of that, and I am proud of our record in helping more and more older and disabled people to use buses. In 2000, we acted to ensure that, for the first time, older and disabled people in England were guaranteed half-price bus travel within their local authority area.

Tom Levitt (High Peak) (Lab): I would like to put on the record my appreciation for the assistance that my right hon. Friend gave us to make sure that the community transport dial-a-ride scheme in Derbyshire would be advised that it fell within the concessionary scheme, thus ensuring that the services she described will remain available in a sparsely populated rural area. She will be pleased to know that all of the other major parts of the old Derbyshire Gold scheme have now been negotiated and will go on as part of the Derbyshire Gold card.

Ms Winterton: I know that my hon. Friend campaigned extremely hard on that issue, and that he worked closely with community transport members in his area. I know that he is interested in looking at how the Local Transport Bill, which the House will debate tomorrow, could
25 Mar 2008 : Column 137
contribute to the enhancement of community transport. I thank him for bringing that matter to my attention, and I am glad that I was able to confirm the fact that the Local Transport Bill will assist in this area. He is right; the scheme has proved extremely popular among disabled people and older people. In 2000, we ensured that older and disabled people would have guaranteed half-price bus travel. It proved extremely popular, but we did not want to stop there.

During his time as Chancellor of the Exchequer, my right hon. Friend the Prime Minister acknowledged the importance of concessionary travel and its potential for enhancing people’s quality of life. That is why, in April 2006, we improved the statutory minimum concession from half-price travel to free local travel for those eligible and we provided £350 million through the rate support grant in 2006-07, rising to £367.5 million in 2007-08 and £377 million in 2008-09. Once again, however, we wanted to go further—and we wanted people over 60 and disabled people to be able to go further, too.

Mr. Simon Burns (West Chelmsford) (Con): The Minister has given us the figures on how much the Government will give local authorities towards the cost of the scheme, but will she also share with the House the total rounded figure that the independent consultant said would be the overall cost of fully funding the scheme?

Ms Winterton: Actually, those are not the figures for the new scheme. I have provided information on the amounts of money already in the system; I shall come on later to the extra money that will be made available. To provide one example, in the hon. Gentleman’s local authority, it will mean a 30 per cent. increase over the last financial year.

Mr. Burns: When the Minister reaches that point and provides those figures, will she also provide the total amount that the Government’s independent assessor calculated as the cost of fully funding the scheme? It amuses me to hear the right hon. Lady saying that my local authority area is getting a 30 per cent. increase in funding—and we are not going to complain about that. However, what she fails to say is that her own independent assessor estimated the total cost of fully funding the scheme in my area at £1.1 million, yet the Government have given Chelmsford borough council only £413,000, which means a shortfall of £738,000.

Ms Winterton: I am not sure that the hon. Gentleman is entirely clear about the calculation of the reimbursement system costs. Consultants are employed by local authorities and work with them on estimating the reimbursement amounts that should go to the bus operators. It is quite a complicated system of assessment, which is why the consultants are employed in the first place. As I have said, however, in the hon. Gentleman’s local area, a 30 per cent. increase in funding—in comparison with the previous financial year—will be available to his local authority from April. As I shall explain more fully later, we believe that that is a very generous settlement.

Paul Holmes (Chesterfield) (LD) rose—

25 Mar 2008 : Column 138

Ms Winterton: I shall give way in a few seconds.

We wanted to go further, as I said earlier, because we recognise that the places where people need to travel often have little to do with the sometimes arbitrary boundaries of the local authority in which they live.

Paul Holmes rose—

Mr. Mark Harper (Forest of Dean) (Con) rose—

Ms Winterton: I give way first to the hon. Member for Chesterfield (Paul Holmes).

Paul Holmes: I am grateful, but may I provide the Minister with a slightly less rosy view of what is happening in Derbyshire than was given by the hon. Member for High Peak (Tom Levitt)? There is a total of 10 councils in Derbyshire and they are variously run by all three political parties. The figures I am providing are the latest ones from this morning, as discussed in the Chesterfield borough council’s cabinet. Collectively, the 10 councils say that, across Derbyshire, the cost of the scheme is £15.5 million, but because of Government underfunding, the councils collectively have to put in £2.6 million. That applies to Labour-run councils like Bolsover, which says that it is £96,000 short, as well as to the Lib Dem-run council in Chesterfield, which says that it is £164,000 short.

Ms Winterton: As the hon. Gentleman may know, I have had discussions about the situation in Derbyshire, not least because of the interest shown by my hon. Friend the Member for High Peak (Tom Levitt). I am sure the hon. Gentleman is aware that there have been enhancements to the national scheme. There is the gold card, for instance, and concessionary amounts have been paid to Community Transport. That is absolutely fine, and it will continue if it is what local authorities want. What I am discussing, however, is funding for the national concessionary scheme. For Chesterfield, it means a 32 per cent. increase over and above what it spent in the last financial year, which is about 3 per cent. more than the average that most councils are receiving.

In Derbyshire, a county-wide scheme is already operating. In other areas an additional amount will be spent in the next year to cover journeys in and out of the county, but in Derbyshire that is covered by what it has been doing over the past year, which makes the 32 per cent. increase even more generous than it would be in a different area. About 4 per cent. of people tend to travel outside their county area. Chesterfield borough council will have £416,000 extra, which means that if £1 is spent per journey, 416,000 extra journeys will have to be accounted for in the area.

Mr. Harper: The Minister used the word “national”. When the Prime Minister, then Chancellor of the Exchequer, announced the scheme, many of my constituents thought that “national” meant “the United Kingdom”. As the Minister will know, because I have questioned her on the subject before, my constituency borders Wales, and it is not possible to travel from it to Wales if it is necessary to change buses. It breaks up the journey, and for many of my constituents that makes the scheme effectively worthless. [Interruption.] Someone who wants to travel from Lydney to Chepstow and then to the hospital in Newport cannot use the scheme at all.

25 Mar 2008 : Column 139

Ms Winterton: I doubt that the hon. Gentleman’s constituents would consider a 41 per cent. grant increase worthless. I should be interested to know how much he thinks Conservative Front Benchers believe should be spent on the scheme if they do not think that 41 per cent. is enough for his constituents. He will probably want to ask them that question.

As the hon. Gentleman said, there are some cross-border buses, and there has been a local agreement on funding for them. We have had some initial discussions with the devolved Administrations, but we want to bed down the arrangements in England separately before considering the financial implications of extending them to Scotland and Wales, which would be fairly severe. The hon. Gentleman may wish to ask his Front-Bench colleagues whether they would use finances that may or may not be available to them for that purpose, but our priority is to ensure that the English system works well. Cross-border services can of course continue, but the financial implications of extending them further are, as I have said, considerable.

Several hon. Members rose

Ms Winterton: Because we are dealing with this subject, I will give way to the right hon. Member for Berwick-upon-Tweed (Mr. Beith), but then I must make some progress.

Mr. Alan Beith (Berwick-upon-Tweed) (LD): It is clear from answers already given to me by the Minister and the Secretary of State that the Government have not done much work yet on the costs of reciprocal arrangements between England and Scotland and Wales. Ought not that work to begin? It is not at all clear that such large costs are necessary. To most of our constituents, who believe in the Union of England, Scotland and Wales, this seems an arbitrary limitation on the ability that people in other parts of the country have to use their passes across borders.

Ms Winterton: I know that the right hon. Gentleman has been concerned about this, as he raised it at Transport questions a couple of months ago. As I have said, we want to ensure that the system to deliver this settlement is in place. At some point, we might want to go further than that, but the priority is to make sure that the settlements that we have announced so far are implemented and that the scheme is up and running before we go further.

Mr. Michael Jack (Fylde) (Con): I acknowledge that the borough of Fylde has received an additional £270,000 this year, but what assurances can the Minister give me about a small coastal borough such as mine, which may have this scheme used disproportionately because of tourism in our area? What can she do to monitor how the formula operates, in case under the current arrangements it does not recognise disproportionate use for tourist purposes?

Ms Winterton: I thank the right hon. Gentleman for acknowledging that there has been an increase in the allocation for his area, which ranges from 19 per cent. to 31 per cent. for the respective authorities—that is the increase Fylde has had. I shall discuss later how we made the calculations as that is an important point, but
25 Mar 2008 : Column 140
I assure the right hon. Gentleman that matters such as visitor numbers were taken into account in order to try to reflect the points that people in coastal towns have made.

In 2006, my right hon. Friend the Prime Minister announced that, for the first time, about 11 million older and disabled people would be able to use off-peak local buses free of charge anywhere in England from April 2008. That will deliver the freedom to travel across district or county boundaries to nearby shops, to access health care, and to visit friends and relatives. It will mean that there is free travel when visiting any part of England.

To refer to the point of the hon. Member for West Chelmsford (Mr. Burns), through the report before us tonight we are providing an additional £212 million to local government in 2008-09, rising to £217 million in 2009-10 and £223 million in 2010-11. Taking into account money received through the revenue support grant, including the extra added from 2006 and the special grant for this latest extension, the total value of funding for concessionary travel is now about £1 billion a year.

To date, all of the funding to travel concession authorities for reimbursing operators has been routed through the formula grant part of the wider local government finance settlement. As the report before the House makes clear, the figure of £212 million for this year—rising in the manner I have stated—is based on generous assumptions about pass take-up, fares and journey rates. This £212 million of funding is solely to cover the extra costs of the new concession. It does not cover the cost of the existing free local travel concession, the funding for which will continue to be provided through the formula grant. It also does not cover any discretionary concessions that authorities may choose to offer. Those must continue to be funded from authorities’ own resources in exactly the same way as in the past. The new concession does not prevent local authorities from continuing to fund discretionary concessionary travel if they wish to do so.

David Howarth (Cambridge) (LD): I appreciate that the new money is simply allocated to deal with the additional costs of the new scheme, but Cambridge city council believes that the scheme will cost it £400,000 a year more than the Government are granting from this new money. Does the Minister accept that although that is a small sum for the Government, for a council such as Cambridge it is the equivalent of the entire increase in this year’s council tax? The sum is calculated on the basis of a 13-element flow diagram. Surely the Government must recognise that it might be wrong in some individual cases.

Ms Winterton: The hon. Gentleman’s authority is receiving a 60 per cent. increase compared with what it spent in the past financial year. Some Labour Members would feel slightly jealous about that.

David Howarth: The right hon. Lady repeatedly talks about percentage increases in funding, yet she omits to mention the percentage increases in costs. The whole point that the Liberal Democrats are trying to make is that the percentage increases in costs for some authorities clearly outweigh the increases in grant aid
25 Mar 2008 : Column 141
being offered. If this was only a matter of increasing funding, it would not be a problem. The problem is on the cost side.

Ms Winterton: Our rough estimate is that the extra journeys would cost £1 per journey. In the hon. Gentleman’s constituency, the money would account for about 645,000 extra journeys made by over-60s and eligible disabled people who decide to use buses to come into the area.

David Howarth rose—

Ms Winterton: I am not going to let the hon. Gentleman in again, because I am sure that he might wish to contribute to the debate itself rather than through a series of interventions—he probably wants to make his own speech. May I reiterate that he must bear in mind the 60 per cent. increase on what was spent in the past financial year?

Let me deal with how we decided to distribute the extra funding. My Department worked closely with stakeholders. From our discussions, it became clear that local authorities wanted the additional funding to be provided by way of a special grant. We accepted that recommendation and listened to what local authorities had to say about it. We then consulted widely on the distribution mechanism for the special grant. Our consultation paper offered a number of different formula options for distributing the grant based on combinations of existing data likely to be linked to the eventual costs of the new concession. As I have said, we are talking about things such as visitor numbers, bus patronage and eligible population.

We then consulted further on four options, asking local authorities which they preferred. Our proposed distribution is based on the most popular of those options, changed to take account of some of the information received and views expressed during the consultation.

Annette Brooke (Mid-Dorset and North Poole) (LD): All three of the relevant authorities in my constituency are predicting a massive shortfall. For example, Purbeck district council, which is a small authority that has a total budget of only £6 million, predicts a shortfall of £123,000. That makes me wonder whether the Government’s anticipation of the extra visitor numbers to a wonderful tourist area such as the one that I am proud to represent is the same as the predictions made locally. My three councils are all predicting massive shortfalls.

Ms Winterton: Actually, a lot of the figures that we use are based on figures provided by local authorities. We do not make them up—we use the data that are available. In the hon. Lady’s constituency, the increase ranges from 31 per cent. to 40 per cent, which is considerable. In the Poole area, the special grant allocation is £596,000, which equates to approximately 596,000 extra journeys that might be expected in the area. It is important to recognise that that is a generous concession.

Next Section Index Home Page