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Concessionary Bus Fares

Volume 472: debated on Tuesday 4 March 2008

4. What assessment she has made of the budgetary implications of the national concessionary bus fare scheme for local authorities. (190975)

We have allocated an additional £212 million to travel concession authorities from 1 April, on top of the £350 million allocated in 2006-07—enough to fund around an extra 200 million bus journeys across England. Our assessment of the likely cost impact of the new concession is based on generous assumptions about pass take-up, fares and increased patronage.

Is not the reality that the scheme has been underfunded nationally by at least £60 million? In Chesterfield alone it will cost a minimum of £1.3 million, and the Government have provided only £1 million. That leaves a small council such as Chesterfield borough council to find £300,000, which is the equivalent of a 7.5 per cent. increase in council tax. When will the Government stop forcing councils throughout the country to cut services and raise council tax to make up for Government underfunding of Government schemes?

The hon. Gentleman is quite wrong. In 2006-07 Chesterfield local authority was already spending £1.3 million on concessionary fares. We are providing a 32 per cent. increase: on top of that, we are giving £416,000 extra. In his authority, 23,000 people will be eligible for concessionary fares under the new scheme, and it will provide them with the freedom to use their bus pass wherever they are in the country. He should be encouraging them to take up the pass, not scaremongering about the effect on other services.

Can we just ensure that local authorities are not left with a funding gap that has to be covered by a reduction in non-statutory services? Some authorities, such as mine in Nottingham, are having to consider closing swimming pools, leisure centres and libraries to pay for a transport service—which, ironically, pensioners would end up using to go in search of pools that were not open, libraries that were closed and leisure centres that no longer existed.

I assure my hon. Friend that the settlement is generous. As I said, two years ago, we put £350 million extra through the revenue support grant to fund the current concession. On top of that, from April, a further £212 million will go to funding concessionary fares. That is the equivalent of 200 million extra journeys. The proportion of journeys made outside local county areas is about 4 per cent. whereas the average increase in funding is 30 per cent. I emphasise that the settlement is generous.

The Minister says that few journeys are made outside county boundaries, but the Government news network release issued today advocates, for example, Broadstairs in Kent as an ideal destination for visitors from London. I am sure that Broadstairs would welcome those visitors, but my correspondence with Kent county council, Thanet district council and Canterbury city council shows genuine concern. Will the Minister make certain that resort destinations do not bear an unfair proportion of the burden of cost?

Yes, I can assure the hon. Gentleman on that count. The formula that we drew up for the specific grant—it is a specific grant, at the request of local authorities—was based on the number of tourist visits as well as eligible population data. For example, Thanet council will receive a 45 per cent. increase this year on top of what it spent in 2006-07 on concessionary fares. Again, that increase in the hon. Gentleman’s constituency is much greater than average. In Thanet, 35,000 people over 60 will be eligible for the scheme, and I encourage him to advertise its benefits to his constituents. In total, 11 million people around the country will benefit. Hon. Members should welcome that scheme for older and disabled people.

Is the Minister aware that the pleasure that pensioners and the disabled in Hove and Portslade take in their bus passes is tempered by being harried and bullied by accusations that the bus pass is responsible for the cuts in the local authority budget announced last week? What measures will my right hon. Friend take to ensure that local authority mismanagement will not stop the implementation of the free bus pass scheme?

My hon. Friend makes a good point. In her area the increase is some 33 per cent. It is quite wrong to scaremonger among older and disabled people about services being withdrawn, when the settlement is in fact incredibly generous. I hope that she will encourage her constituents to take up the pass and use the new freedoms that go with it.

“A budget disaster”, “Financial meltdown” and “Our local authority is receiving inadequate compensation” are but three of the reactions of Labour and Conservative councils up and down the country to the introduction of the national concessionary bus scheme. The Government’s reaction this afternoon has shown their complacency. They must accept that the funding that they are providing for their scheme is inadequate. That funding is leading to councils either cutting services or increasing council tax. The Government happily claim credit for the scheme, yet they are allowing the local council tax payer to pick up the bill. When are they going to stop being complacent and provide proper funding for the introduction of their scheme?

Again, the increase in the hon. Gentleman’s constituency will be 31 per cent. of what was being spent in 2006-07. Let me emphasise that we consulted widely with local authorities on the funding formula for the scheme. We agreed to make a specific grant and we gave four options for how that grant should be distributed. The way in which we are distributing the grant is the one that the local authorities asked for. The hon. Gentleman might want to ask the hon. Member for South Cambridgeshire (Mr. Lansley) whether he is proposing to cut concessionary fare funding in order to put forward his policies.