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Tim Loughton (East Worthing and Shoreham) (Con): I had not intended to speak in this debate, but I have been goadednot least by the lack of mention of my constituents, particularly those in Worthing. I thought it might enlighten the House if I discussed the experiences of my local councils and my constituency. I repeat the welcome given to the hon. Member for Liverpool, Riverside (Mrs. Ellman) and commend her Committees report, although it was produced under the chairmanship of the late former hon. Member for Crewe and Nantwich.
I take issue slightly with my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski), who tried to claim that his constituency had the highest number of pensioners. Although not now No. 1 in the pensioner stakes, Worthing still has, proportionately, the highest number of over-85-year-olds, who form 4.6 per cent. of the population. We greatly appreciate the contribution that they make to our town. They seem to travel on buses disproportionately more than other members of the community, so our getting this issue right is of particular relevance to them.
Although I greatly welcome the scheme and supported the Concessionary Bus Travel Bill that brought it in, there are clearly winners and losers. The Government have increased the funding to £1 billion. I am not trying to detract from the generous funding that they have made available, but whatever one thinks about the funding, the issue is whether it is going to the places it is needed most and whether it reflects the usage of buses by local populations. I have a problem in that regard.
Worthing borough council and Adur district council, the two local authorities in my constituency, have been working in ever closer partnership. That has been greatly encouraged by the Government and it is to be applauded; it has produced many efficiency savings. However, those savings and more have gone out of the window because of the necessity of subsidising a scheme that the former Transport Minister, the hon. Member for Lincoln (Gillian Merron), made absolutely clear on 28 June 2007 would
be fully funded. Overall, that may be soit is too early to tellbut in Adur and Worthing it is anything but fully funded.
The Minister knows that full well because, in her absence over Christmas, I took a delegation to see the Minister for Local Government, the hon. Member for Wentworth (John Healey), and I had a follow-up meeting with her later. She has had a number of detailed representations from council leaders, council officers and the two Members of Parliament representing the Adur and Worthing authorities. She is in no doubt about the problems that the scheme is causing us.
I will cite the figures: the estimate is that there will be a shortfall of between £600,000 and £650,000, possibly in Worthing alone. In Adur district next door, the shortfall for this year has been estimated at £238,000, which is equivalent to 4.3 per cent. on the council tax. The council leader has estimated that if we had not had to subsidise this supposedly fully funded Government scheme, we virtually need not have increased council tax this year at all. All the other savings that have been made have been wiped out by the additional costs of the scheme, which have fallen on Adur council tax payers; the scheme has not been fully funded as the Government had claimed.
There are winners and losers among the 324 authorities that are operating the scheme. There are particular losers among authorities that include resorts, particularly seaside resorts, that rightly attract people on day trips or short-stay holidays. That is why Sussex, which has a number of seaside resorts, has been disproportionately hit. I repeat that the scheme is good, but it has already become subject to the law of unintended consequences, and that is having a detrimental financial effect on my councils and therefore my council tax payers. Sarah Gobey, the assistant director of financial services at Worthing council, has provided me with a brief. She writes that Worthing borough council
is extremely disappointed to see that the Department for Transport is only willing to consult on proposals to distribute the grant on a formula basis. At this early stage in the scheme it is almost impossible to derive a formula which will match the pattern of actual coststhe empirical information is simply not there.
I should remind the House that the Government adopted a reimbursement formula based on a combination of eligible population, bus passenger journeys, overnight visitors and retail floor spacea very difficult calculation to make.
This Council would prefer to see the grant paid to reimburse the actual additional costs experienced at a local level. This would ensure that there are no gainers or losers in the new system. The preliminary forecast received from the Councils consultants would indicate that whilst Worthing will be a loser under the proposed arrangements, other Councils within West Sussex would appear to gain. We fail to see how this can be justified, yet the Department for Transport refuses to see why using a formula to distribute the funding is flawed. The Government has told local government that there is sufficient funding available for the new scheme, consequently there is absolutely no rationale in allocating grant on any other basis than actual expenditure.
For the past few years, again to their credit, the Government have been operating a free local bus pass scheme, but its operation and funding have been to the detriment of my councils. The note continues:
However, all of this masks another problem which is that the Council believes that the current statutory scheme is also underfunded. By 2008-09, the Council estimates that the cost of the current scheme will have increased by £860,000 since the introduction of the free bus pass. In 2006-07, the Council received additional funding of £610,000 via Revenue Support Grant. As a floor Authority, this funding has barely kept pace with inflation, whilst over the same period the Council has seen costs increase by over 20 per cent. per year. Consequently, the Council estimates that the current scheme is underfunded by at least £200,000.
On top of the additional underfunding element of the national bus pass scheme, we have been accumulating losses on the existing local scheme. So there has been an accumulation of losses over some years, to which the national bus scheme is a further addition. It is a double whammy. As Sarah Gobey concludes:
There is the distinct possibility of financial meltdown for Worthing Borough Council for the sake of a formula and it is particularly galling to think that all of our hard work on achieving savings from partnership working
could be wiped out at a stroke.
The Government announced this scheme to great acclaim and we all support it and want to see it flourish because it is good for transport, good for the environment and, most of all, good for elderly and disabled people who can travel more, but it is clearly having a very detrimental effect as certain councils, particularly mine, are suffering from a large shortfall.
That explains why certain councils, including mine, have chosen to time their scheme so that it starts at 9.30 am rather than at 9 oclock, as 9.30 is the latest allowable time for authorities to commence the scheme. Some neighbouring councils, which are not suffering from the same shortfall, have been able to start their scheme from 9 oclock, so further confusion is ensuing. My local councils are, quite understandably, trying to limit the impact that the shortfall in funding is having by just about the only mechanism available, which is to start the scheme at 9.30 rather than earlier.
Now, however, we have people travelling between local authorities whose start time is different, which is causing a good deal of confusion and no little resentment by some people who think that certain councils are pulling a fast one. Well, if anyone is pulling a fast one, it is the person who invented this funding formula, which is leading to serious underfunding for my councils, which are then quite unreasonably getting the flak for what is happening.
As my hon. Friend the Member for Scarborough and Whitby (Mr. Goodwill) said, the scheme has also been a victim of its own success, as there has been a big increase in the number of bus journeys. On the face of it, that is absolutely right, and I see many people around Worthing getting on buses, so the buses are being well used. I have to say, however, that many of the people who get on those buses do not get off them [Interruption.] The Minister might say Not ever, but there have been a number of cases involving people who, knowing that they can travel for free, get on the bus and travel all the way down the coast to Chichester or Lewes or perhaps on to Hastings or wherever without getting off. They go for the trip. That is terribly nice and lovely, but they do
it again the following day and the one after that and the one after that. Bus drivers now have regular customers who travel on the bus for the sake of it. That may not be typical, but some people are making use of the system, travelling up and down the coast and having a lovely ride. To be honest, that is not the purpose for which the scheme was intended.
I have another extraordinary situation in my constituency. There is a residential building of about 90 sheltered flats where a number of pensioners live. It is very well run by the local housing association. It is on a busy road just on the outskirts of Worthing. The bus going into town picks up pensioners from that building so that they can do whatever they want to do in Worthing. When they come back, however, the bus stop is on the other side of the road, but the road is so busy that many of these pensioners are too scared to cross it, so they stay on the bus, travel several more miles into the next town until the bus turns around and comes all the way back in order to deposit them on the right side of the road. That seems absurd, but it is happening. It provides another example of excessive bus journeys, which have to be accounted for by the local bus company. I am trying to address the problem by getting the local authority to put a pedestrian crossing of some description on that part of the road, which should help. [Interruption.] The serious point I am making is that many more people than were ever anticipated are using the buses; and I have to say that it seems to be happening to a greater extent in Worthing and Adur than in other parts of the country, which exacerbates the problem of the number of journeys and the underfunding.
Norman Baker: Well, Lewes is a nice place to get off. Has the hon. Gentleman seen a copy of Scotlands Sunday Post, which drew attention to a different sort of problem with bus journeys? Operators were said to have given out tickets to passengers for the entire length of a journey, knowing that they would be getting off after a couple of stops in order to claim back a higher rebate.
Tim Loughton: I am afraid that I have not seen this weeks Sunday Post, which is very remiss of me, but again, that is not an isolated incident, as there are many concerns about the accuracy of ticketing.
Finally, the other problem looming is the cost of the scheme, inflated by additional passengers, to bus operators themselves, as they face the double whammy of increased petrol costs and so forthirrespective of whether the buses are run on recycled chip fat or whatever other wonderful environmentally friendly schemes are happeningbecause local bus companies are increasingly appealing against local authorities on the amount they can claim for bus fares.
The scheme is very good and well intentioned, but it is facing real problems. That is why, when my local authorities went to see the Minister, they basically said, Great scheme, but we don't want to run it. We want all our council tax payers to have the benefit of it, but we don't want our council tax payers to have to pay for it as well, given that this is supposed to be fully funded. My
local council leaders would prefer the scheme to be taken out of their hands and to be run nationally or by some other body [Interruption.] This may well appear to be Stalinist to the hon. Member for Telford (David Wright), but I do not often hear him or members of his party speaking up against Stalinism.
The problem is this: why should my council tax payers in Worthing and Adur have to pay for a scheme that is supposed to be fully funded by the Government? As I have explained, the councils are saying that the scheme is great, but they do not want to have to run it and pick up the tab. The Government have to acknowledge that however well intentioned the scheme, and whether or not £1 billion is or is not sufficient to run it nationally, in certain parts of the countryAdur and Worthing are not untypicalcouncils are having to pay a substantial amount to run it. I urge the Government to look again at the formula and see whether they can better reflect journey usage. They need to refine the formula and ensure that a good scheme does not become a victim of its own success, leading to the law of unintended consequences, whereby my council tax payers effectively have to pay twice. I am not saying that I want the scheme reduced in any way. I want to ensure that it achieves its intended purpose of enabling more pensioners and disabled people to get out of their houses, use essential services or go out for pleasure journeys or whatever; at the same time, however, it should not be unfair to other council tax payers who have to foot a billin the case of Adur, a bill of 4.5 per cent., which could have wiped out the council tax increase this year.
I urge the Minister to think again about enacting a review of the formula, in no more than the two years suggested by my colleagues when the Bill went through the House last year. Will she consider doing so more urgently, to ensure that moneys are being fairly distributed where they are needed for the scheme, and that councils are not pursuing a profit-making venture, which was not the Government's intention?
The Minister of State, Department for Transport (Ms Rosie Winterton): This has been an excellent debate on a good and interesting report. I pay tribute to the Transport Committee for considering integrated ticketing and concessionary travel. The report was carried out when Mrs. Dunwoody was the Committees Chairman, and it is a great tribute to her that she wanted to consider the subject, which might not appear to be at the heart of transport debates. Such issues are incredibly important, however, especially if we wish to increase the use of public transport. I also congratulate my hon. Friend the Member for Liverpool, Riverside (Mrs. Ellman) on taking over the chairmanship of the Committee. She is already making great strides, as we all expected that she would, in ensuring that the Governments transport policies are properly scrutinised.
I hope that right hon. and hon. Members will feel that the Governments response to the Committee has been helpful and constructive. As I shall outline, we have taken on board the Committees recommendations in a number of areas and, in some instances, have agreed with the Committee where it said that we are taking the right approach. We should not overlook ticketing, which is an important aspect of public transport.
As Members have said, the Oyster card in London has shown the potential of smartcards both to speed up and simplify journeys. In addition, the sale of rail tickets over the internet and the introduction of advance ticket machines have freed up railway staff to do other jobs, particularly helping out passengers on the concourse or platform. My hon. Friend the Member for Telford (David Wright) said how important it was that staff were able to help people with disabilities. Many of the new technologies available in the world of transport have the potential to revolutionise public transport.
Mrs. Ellman: Although I endorse my right hon. Friends statements about the benefits of technology, does she agree that technology should not be an absolute substitute for people, who are there to help passengers?
Ms Winterton: I certainly agree with that. We have discussed today the need to ensure that people can navigate their way around the system using new technology. Of course, people need assistance to do that, but at the same time staff can be freed up to undertake other duties.
The Government are committed to ensuring that ticketing choices are fair, transparent and convenient, as my hon. Friend said. Last years White Paper, Delivering a Sustainable Railway, set out our vision of simpler fares, modernised ticketing and information, and how best to meet the needs of disabled passengers. In April, we welcomed the announcement by train operators of the new, simplified and more transparent fares structure to be introduced next year. In May, the operators introduced standard names and conditions for advance fares, increasing the availability of railcard discounts. From September, the names of the main walk-up fares will be common across the whole network, so they will be easier for passengers, and Members of Parliament, to understand.
The Government recognise, however, that the arrangements for bus ticketing are not so well advanced. We want integration not only on the railways, but on buses. We understand the importance of a simple and flexible integrated approach. We should remember, however, that bus operators often work in a commercial world, and are free to set their own fares and determine conditions on ticket validity.
I was pleased that my hon. Friend the Member for Liverpool, Riverside spoke about the importance of the price promise for rail. I shall refer later to the Local Transport Bill. With the agreement of the Association of Train Operating Companies, we plan to introduce a price promise, whereby anyone who buys a train ticket in person from a ticket office and who subsequently discovers that they could have bought a cheaper ticket for the same journey will be entitled to a refund of the difference. That was a concern of the Committee.
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