House of Lords - Concessionary Bus Travel Bill (Report Stage)

Lord Bradshaw and Baroness Scott address problems of funding and execution in the legislation to provide free bus travel for the over 60's.

Use of other modes of transport (Amendment 2 etc.)

Lord Bradshaw, Spokesperson for Transport

On the amendment which limits application to bus, tram and tube travel, Lord Bradshaw said: "Amendment No. 3 is grouped with Amendment No. 2. I recognise that the Government will be extremely hard pressed to extend free travel by other means at the moment. I further recognise that there is a serious funding problem, about which my noble friend Lady Scott of Needham Market will speak when we come to the appropriate amendment.

"Amendment No. 3 does not seek immediately to extend the facility to anyone. It allows the Secretary of State, through regulations, to make provision for an eligible journey to be extended on to another mode where he considers it appropriate to do so. I raised in Grand Committee the question of the Croydon Tramlink, which for part of its journey?from New Addington to Croydon?is a substitute for a bus service that was withdrawn. People in those circumstances may have a legitimate complaint, which the Secretary of State may wish to alleviate. Similarly, if we go to Merseyside, a ferry journey from Birkenhead to Liverpool is part of the journey in many cases."

Use of smart cards (Amendment No. 7)

Lord Bradshaw responded by saying "this is one of the two important issues in the Bill. In Grand Committee, the Minister said that the Government are sympathetic to the introduction of smart cards. However, I reiterate that not only are they a method by which people can buy their tickets, but, more importantly, they would be a measure of bus use. Admittedly, in this case that would relate to smart card holders only, but it is a considerable advance on what we have now and a much better way of distributing the £1 billion, to which the Minister referred, and the substantial sums that are paid to operators in bus-service-operator grant. That grant is paid for the mileage run rather than the passengers carried, which is the output that we are seeking to cover."

He continued: "We want to see momentum stepped up to get a fully fledged national scheme based on smart cards. There may be some problems; I am aware that there is a need for up-front investment by operators to have machines which read smart cards on buses and to have the back-office facilities to take the information off the machines and use it. I would like to hear what the Government are going to do about smart cards because it is tempting to table an amendment at Third Reading setting a timescale for an ITSO-compliant smart card. Perhaps the Minister has some good news for us and will tell us that we need not bother because he has information that will cheer us on our way."

Cost of the scheme (Amendment No. 8)

Baroness Scott of Needham Market, Local Government Spokesperson

Outlining her amendment, Baroness Scott said: "The first question at issue was whether the government have allowed enough money in total to fund the concessionary fares scheme. I accept that it is notoriously difficult to make precise estimates of how much a scheme like this will cost. We have evidence from the introduction of the scheme in Scotland and Wales and also when the full fare scheme was brought in locally. We know that the tendency always was to underestimate the costs. That is not intended as a criticism of anyone, but we need to take into account that all the evidence is that the take-up of concessionary passes has always exceeded expectations."

She continued: "The second set of problems is rather more intractable. I hope that the noble Lord has had some time to think about them because the difficulties faced by individual councils can be quite profound. That is fundamentally because of the Government's decision to link the funding of the concessionary fares scheme with the overall local government financial settlement. Funding is related to all sorts of strange demographic equations and the complexities of local government finance but is not linked to how many people are actually using the buses. That will cause difficulties for certain councils. Some authorities will receive much less money than they need. That may be because their eligible population is higher than the average that has been allowed for, or it may be because they have more bus-friendly policies, which have created a higher than average demand."

She went on to say: "The real problem for local authorities is that, if there is a shortfall in this scheme, where will they get the money? Most of them will not want to put up the council tax to meet these costs and some will not be able to because they will be capped. They can have a look at other areas of spending, but they cannot touch education because that is ring-fenced and the social care budget is under huge pressure. What is likely to happen is that, if there is a shortfall in this scheme, local authorities will go back to their transport revenue budget and make their savings there. The biggest single item of spending in those budgets is buses. Therefore, the chances are that we will see a reduction in bus services. Consequently, pensioners will have free fares on buses that do not exist. That is what happened in Tyne and Wear last year, and we do not want to see that situation replicated across the country."

Effect on London (Amendment No.9)

Lord Bradshaw, Spokesperson for Transport

To summarise his amendment, Lord Bradshaw said, "the statutory requirement for concessionary fares in London differs from the rest of England. Uniquely in London, the powers for local authorities to negotiate concessionary fares are underpinned by a reserve scheme, should the local authorities fail to reach agreement with Transport for London by 31 December each year for the following financial year. If a reserve scheme were invoked, Transport for London would determine the cost of the scheme. We have to bear in mind that Transport for London is the bus operator. London boroughs are therefore at a disadvantage when negotiating with Transport for London. In no other part of the country does the bus provider have so much power. In effect, Transport for London is able to call the shots, when elsewhere in the country concessionary fare schemes are determined by local authorities, subject to appeal to the Secretary of State."

He concluded: "I understand that there is some publicity from the Mayor today, saying that this would put the whole of free travel in London in jeopardy. That is a view with which I most profoundly disagree. There is every likelihood that the authorities will continue to negotiate in favour of the scheme. I am trying to draw the Minister's attention to the existence of the reserve scheme which I believe puts too much power in the hands of the providers of the transport service. I beg to move."