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Freedom Pass

Volume 503: debated on Monday 11 January 2010

The Petition of residents of Sutton, Cheam, Worcester Park and others,

Declares that the decision of the Secretary of State for Transport to cut the financial support for concessionary travel for older and disabled people in London is unfair to the 1.2 million people who use the Freedom Pass. Further declares that London Councils currently contribute a third of the cost compared to the parts of the country where concessionary travel is fully funded by the Government and that the cut in the grant would result in London Councils covering half of the cost of the scheme.

The Petitioners therefore request that the House of Commons calls upon Her Majesty’s Government to drop the plans to cut the funding for the Freedom Pass for elderly and disabled people.

And the Petitioners remain, etc.—[Presented by Mr. Paul Burstow, Official Report, 9 December 2009; Vol. 502, c. 469 .]


Observations from the Secretary of State for Transport:

The current statutory minimum bus concession provides free off-peak bus travel anywhere in England to older and eligible disabled people in England.

The Freedom Pass scheme is operated by London Councils on behalf of all 33 London Boroughs and is the largest and most generous concessionary travel scheme in the country. Some of the scheme’s characteristics are at the discretion of the London Boroughs and London Councils is able to change these providing there is unanimous agreement amongst the boroughs and the changes do not contravene the statutory minimum required by legislation. However, as a minimum, the scheme in London must provide free travel on the London local transport network between 9.30 am and midnight and the period from midnight to 4.30 am on weekdays, and at any time at weekends and on Bank Holidays.

The bulk of the funding for concessionary travel is provided to local authorities, including those in London, via the overall local government formula grant system administered by the Department for Communities and Local Government (CLG). Since April 2008 the Department for Transport has also been providing special grant funding to local authorities solely to meet the additional cost of the extended concession introduced at that time, which provides free off-peak local bus travel to older and disabled people throughout England.

Special grant funding was £212 million in 2008-09, has increased to £217 million this year, and will rise further to £223 million in 2010-11. This brings total spending on concessionary travel to around £1 billion a year. The grant has been distributed on a formula basis since its introduction in 2008. The formula used was devised in advance of the introduction of the new concession and was designed to direct money towards those authority areas likely to see the biggest increase in costs as a result of the move to all-England travel: tourist areas, regional hubs, shopping centres.

There is no evidence that the totality of the grant is insufficient but there is evidence that some authorities, including London, may have received significantly more than required to meet the extra cost imposed by the change in the statutory minimum bus concession.

We have been considering whether there is a need to reopen the grant distribution for 2010-11 in the light of reports that some authorities are experiencing shortfalls in funding from the current distribution.

The consultation, Local Authority special grant funding in 2010-11 for the national bus concession in England closed on 30 December. The consultation proposed a redistribution of the special grant allocations based on actual outturn data following the first full year of the new concession. This is the fairest way of objectively assessing the impact on all authorities across the country.

The only increase in costs London faced as a result of the improved England-wide concession was for the cost of non-London residents now travelling free on the London bus network. London’s precise need for additional grant was not knowable in advance but it was expected that a sizeable grant would be necessary to meet the cost of concessionary passengers from the surrounding counties now travelling for free on the extensive London Bus Network. It is clear that there have been far fewer of these trips than was anticipated.

Although the new distribution, if taken forward following the consultation, will reduce London’s grant for the coming year, there will not be a retrospective adjustment of allocations already made for 2008-09 and 2009-10 to recoup surplus grant funding received in those years. Therefore authorities that see a reduction in their grant as a result of the revised distribution in 2010-11 will have already benefited from two years of receiving more funding than was required.

London boroughs would still be left with significantly more funding than the actual burden the concession has imposed–around £30 million of grant against a likely cost in 2010-11 of around £10 million.

London Councils’ own documents confirm that the actual cost impact of the new concession on London was only around £5 million in 2008-09 compared to a grant of £55 million. It is likely that the level of grant will outweigh the costs of the concession by a similar amount (around £50m) in 2009-10.

Following the consultation, if it is decided to proceed with a revised grant distribution for 2010-11, it will be the subject of a new Special Grant Report setting out the revised allocations. The distribution that is debated in Parliament will take into account responses received to the consultation and therefore may differ to the one proposed in the consultation paper.