Examination of Witnesses (Questions 400-418)
MR STEPHEN
JOSEPH, MR
ANTHONY SMITH,
MR RUFUS
BARNES AND
MR GORDON
EDWARDS
12 DECEMBER 2007
Q400 Chairman: I think what worries
the Committee is how accurate is the information about this because—I
am not saying this in any sense in a pejorative way—a lot
of the information is after all anecdotal. How would we obtain
accurate research that says what is happening and how widespread
it is in the event?
Mr Edwards: If I could draw your
attention to a report which was 179 from the Scottish Executive
Development Department after they introduced free concessionary
fares, they looked at the Lothian and Strathclyde areas and said
a significant switch from rail to bus was measured by on-train
surveys before and after the introduction of free fares. The abstraction
was between 19% and 66% and it averaged 46% for those two regions.
I could give you examples where we have seen abstraction on certain
railway lines in south west England from rail to bus. We now have
a line like the Exeter to Exmouth line which is basically becoming
a commuter railway, well used in the morning peak by commuters
who come back, of course, in the evening. During the day the over-60s
who used to use that service now go by bus because it is town
centre to city centre every 12 minutes, low floor, free.
Q401 Mr Martlew: Is that a problem?
Mr Edwards: In the south west
we are worried about the financial viability of our railway lines
because many of our railway lines are community railway lines,
have been designated by the DfT and they are supposed to grow
custom. However, you have somewhere like Looe to Liskeard, Penzance
to St Ives where, in the winter, people, because of the high percentage
of concessionary fare holders in those area, are now using competing
bus services and not using trains.
Mr Smith: I think that is a good
question, does it matter? From the passengers' point of view of
course it is potentially of great benefit in the short term, but
in the longer term the railways in these areas are subsidised
by the Government for a purpose and if that purpose is not being
fulfilled you would hope there would be a bit of joined up thinking
about which mode of transport is going to be favoured by the public
subsidy, but it appears to be approached in separate parts.
Q402 Graham Stringer: Is there anything
to be learned from the experience in Wales or Scotland or Northern
Ireland in relation to the introduction of the national concessionary
fares scheme? We have had some very interesting examples, but
are there other lessons that can be learned which the Government
should be applying to England?
Mr Joseph: Specifically on the
point that has just been raised about rail, in Wales there has
been a new approach and now three community railway lines have
been added to the National Concessionary Fare Scheme and these
are ones that are regarded by the Welsh Assembly Government and
all parties in Wales as being important as lifelines for parts
of rural Wales. It seems important to keep them going so they
have been added to the National Concessionary Fare Scheme. The
written evidence of TravelWatch South West to the Committee suggests—and
we certainly support this—that initially the lines designated
as community railways in England should be added to the National
Concessionary Fare Scheme. Scotland actually went through a process
where they did try the kind of local reimbursement that is being
used in England and found that it was much, much simpler to organise
it nationally. We think that it would be appropriate to learn
from that experience from Wales and Scotland and move towards
a genuinely national scheme.
Mr Barnes: Can I add that it is
worth considering the London situation as well which of course
is entirely different in its funding regime. For many years now
senior citizens have had the opportunity to travel on the bus,
the underground and national rail, trams in Croydon and Docklands
Light Railway, and because they are able to travel on the mode
that is appropriate for the journey they wish to make people do
not have to think, "This is the free option; this is the
option I am going to use" and it has not had the worrying
impact that quite clearly my colleague in the south west is concerned
about. If you have the concession only on one mode it has an impact
on other modes.
Q403 Mr Clelland: Our colleagues
here will be aware of the fact that the introduction of the scheme
impacted particularly badly on Tyne and Wear Transport Authority
who found themselves with a £7 million shortfall and in order
to make up for that some smaller services had to be cut and in
particular the Team Travel Scheme (which was a scheme to help
young people travel on a concession) had to be cut back as well.
Are you aware of any other unintended consequences of the concessionary
travel scheme? Have other concessions been cut back in order for
authorities to be able to implement it?
Mr Joseph: One example where this
unintended consequence came to South Yorkshire was as a result
of the shortfall the Passenger Transport Executive started to
charge buses a departure tax at bus stations. Stagecoach, for
one operator, charged an extra fare if you were going to those
bus stations.
Q404 Chairman: That is a unique idea,
charging at a bus station to get on a bus.
Mr Joseph: Exactly. This does
not make any sense to passengers at all. In answer to an earlier
question about where we can get evidence from on this, what we
can get evidence on is the percentage of the average adult fare
passed over to operators in each local authority area. That evidence
is available. In the Sussex example I gave 41.9%, for instance,
of the average adult fare is being passed over compared with 73.6%
in Wales, which does give you some indication of the level of
shortfall. I think the particular argument in Sheffield or the
result in Tyne and Wear are not defensible but to go back to the
point I made, the root of this is the level and formula for reimbursement.
Q405 Mr Clelland: Do we think that
the new specific grant is likely to go anywhere at all towards
resolving any of these problems?
Mr Joseph: I think the jury is
out on that. Actually when I have heard presentations from the
relevant Department for Transport officials they have admitted
that it is fingers in the air stuff. They really do not know where
the travel is going to be; they have made a best guess. We area
concerned that particularly in things like tourist honey pot areas
or, for that matter, in London and some other big cities, that
there will be a significant shortfall which will appear in places
like Blackpool, for instance, and there will be problems with
that.
Mr Edwards: Another unintended
consequence, because the money goes down to district councils
there are of course a lot of district councils that have received
far more money for concessionary fares through the Rate Support
Grant than they actually need to pay out. They are therefore able,
because it comes as part of the EPCS element, to use that money
on other services. If we had it all done by specific grant—which
we support—a lot of district councils in the south west
of England would have a major problem in how they fund certain
services which are currently being funded by concessionary fares
money which is not being used for that purpose. We would fully
support this Committee taking district councils out as travel
concession authorities.
Q406 Chairman: Are you saying that
they are not good value for money anyway?
Mr Edwards: No, we are saying
they are excellent value for money, the concessionary fares, but
as Mr Clelland has said, he has a shortfall in Tyne and Wear and
we have a short fall in greater Bristol, but we have West Devon
which spends less than 50% of its current money for concessionary
fares actually on concessionary fares.
Q407 Mr Clelland: Mr Joseph mentioned
this rather novel idea of the bus companies charging passengers
to use certain bus stations. Are there any other consequences
for the fare paying passengers by the introduction of concessionary
fares?
Mr Joseph: As I said in my earlier
answer to Mr Stringer, I think it is very much about cuts in the
commercial services, increases in off-peak fares and other things
and Mr Edwards has also mentioned this too. It is much less high
profile than the charges at bus stations or the loss of a particular
scheme; it is incremental eating away of the bus network and incremental
increases in fares.
Q408 Mr Leech: Mr Joseph, the implication
from what you said was that you were advocating direct payment
from government to bus operators for journeys that are taken with
concessionary fares, is that right?
Mr Joseph: That is correct, as
in Wales and Scotland.
Q409 Mr Leech: Why do you think it
is that the Government will not support that? Is it anything to
do with the fact that it is going to cost an awful lot more than
they say it is?
Mr Joseph: We are not experts
on this but I think actually the evidence from Scotland and Wales
was that by the time you took in the transaction costs of actually
routing it through local authorities it was actually cheaper for
those respective devolved governments to do it directly and that
is why they ended up with a direct system. It actually ought to
be cheaper. The problem we have at the moment is that we have
the imbalances that Mr Edwards referred to, money going to places
that do not spend it so there is actually wasted money in parts
of the system and shortfalls elsewhere and a national scheme would
put that right.
Q410 Mr Leech: Why do you think the
Government is so against the idea?
Mr Joseph: I think that is very
hard to say and you are going to have to ask the Minister after
this session that question. As far as we can see it is simple
inertia and in-fighting between different government departments
in terms of routing through local authorities.
Q411 Chairman: Inertia is very seldom
simple. Mr Edwards?
Mr Edwards: It is nonsense to
have 291 travel concession authorities in England all able to
do their own arrangements for issuing cards, all with their own
rules, all with their own local arrangements, all with their own
back office, all being encouraged by the Government to sign separate
contracts for 2008 ITSO cards. Mr Joseph is quite right, we need,
like Scotland and Wales, a national scheme with national reimbursement;
we need to stop all these arguments which are destroying relationships
between local authorities and bus companies arguing about concessionary
fares reimbursement.
Q412 Mr Martlew: Various local authorities
have different schemes that go beyond. In my area there is no
time restriction. How would you deal with that if you decided
on a national scheme? Would you destroy that?
Mr Edwards: I think that to get
a national scheme, whether with the advent of smartcards you would
then be able to say a local authority would be able to top it
up—
Q413 Mr Martlew: Smartcards are not
working at the moment.
Mr Edwards: No, but with ITSO
smartcards and with bus operators being able to accept them and
read them, it would be possible to load cards issued in a certain
district with special features. I think the current system is
just so complex; 291 different travel concessionary authorities
is a nonsense.
Q414 Mr Hollobone: How bad is fare
evasion? Is enough being done to tackle it and is enough being
done to differentiate between deliberate fare evasion and passengers
who make an honest mistake?
Mr Smith: Industry estimates say
that something in the range of 5% to 8% of the revenue is lost
as it is not collected. At the moment passengers put in about
£5.5 billion into the revenue stream each year and that is
soon going to creep up to £6 billion. That equates to about
£400 million, that would pay for 400 new carriages tomorrow.
It is a lot of money; it is a tremendous loss. Passengers who
have paid deeply resent the fact that other people have not because
they are subsidising them and the industry should collect what
it is owed before it puts the fares up.
Mr Edwards: The only comment I
would make on this is that obviously we support all passengers
paying the correct fare for their journey, but the railway companies
have to make available ticket offices with sufficient windows
and ticket machines that work and issue the full range of tickets.
Q415 Chairman: I think the odd person
looking at those tickets would help too.
Mr Joseph: That is correct. We
are concerned that the emphasis on revenue protection happens
on intercity lines and that some of the local lines that actually
need that revenue most do not get the revenue protection that
they need. Lines like the Severn Beach Line in Bristol or some
other lines in that market, as we have discussed in relation to
concessionary fares, need that revenue to support them and do
not seem to have the priority that should be given to making sure
that people on those lines actually all pay up. In particular,
where you have severe crowding on parts of the network and a pay
as you travel on-train ticketing system, you often find that the
conductor or guard physically cannot make his way down the train
to collect the fares which is another loss of revenue. We are
concerned that it is the local services where the revenue protection
ought to happen most is not happening.
Mr Smith: We support the concept
of penalty fares as long as they are consistently applied and
also passengers have the ability to buy the correct ticket before
boarding. The great concern here is ticket queues.
Q416 Chairman: Yes, we have had that
point. Mr Barnes?
Mr Barnes: I think it is very
important to recognise that some of the new train operating companies
have installed a number of new gates at the stations and it is
very interesting, when talking to the managing directors of the
companies, that some of them are saying that they are raising
far more money then they ever realised they would as a result
of the gates they have put in.
Q417 Chairman: I want to ask finally
about the English National Concessionary Fare Scheme which is
estimated to cost around a billion pounds per annum. Is that good
value or not?
Mr Edwards: It certainly is, yes.
It has been a tremendous success. You only have to go out on buses
and talk to elderly people to see how it has revolutionised their
lives, their ability to access hospitals, health centres, to go
to the shops regularly and get fresh food, to go out and see their
friends. It is a great success story and it is only a pity that
it has been so overshadowed by these arguments between operators
and local authorities about reimbursement. For the customer it
is a great, great success story and it has led to phenomenal growth
in bus patronage.
Q418 Chairman: It does rather cut
out young people or anybody on a low income who might actually
benefit from a different scheme.
Mr Barnes: Yes, I think that we
have in London seen the number of concessions for young people
introduced by the Mayor of London. They have raised separate issues
which I am sure you have not time to look at at the moment, but
there are other options for concessions which over time need to
be looked at.
Chairman: You have been very tolerant,
gentlemen; thank you very much indeed.
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