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Rural Bus Services

Volume 533: debated on Tuesday 11 October 2011

I appreciate the opportunity to speak under your chairmanship, Mr Caton. It is clear that we all understand the importance of bus services to our constituents across the country, especially in rural areas, but the coalition Government’s necessary deficit reduction programme is having a marked effect on the ability to maintain a viable rural transport network.

Almost half of all bus operator revenue comes from public funding, making bus services particularly vulnerable to the pressure on public finances that we inherited from the previous Government after the recent economic crisis. Three main funding streams are available to public transport authorities, all of which were affected by the 2010 comprehensive spending review. Taken alone, those tough financial measures might have been bearable for the rural shire counties and the transport network, and two together would have made life difficult, but the three combined have created a triple whammy that threatens the existence of many subsidised routes in some areas.

The first funding stream is local authority revenue expenditure, which was cut this year by 28%. Local authorities use that pot of money to subsidise some transport routes. Changes were also made to the Department for Transport’s formula for concessionary fare reimbursements. The special grant that accounted for approximately 40% of funding for concessionary travel in Norfolk has been rolled into the formula grant due to the comprehensive spending review. In 2010-11, the funding available to Norfolk districts was £11 million. In 2011-12, the funding attributed through the formula grant was just £7.228 million. The impact is that Norfolk county council’s statutory payment will substantially exceed the allocation, by about £3.5 million. In total, Norfolk is £4.2 million worse off, or £4.4 million on some figures. After negotiations, the county council has done an excellent job of working with bus operators and other transport providers to find another £1.2 million, reducing the gap to just over £3 million.

The funding allocation method from April 2011 uses a standard formula to distribute all funding related to the statutory scheme via the revenue support grant. The formula considers factors such as population density, the number of people over 60 without a car and the proportion of residents on incapacity benefit. Under that formula, Norfolk does not fare well in the funding distribution; it has the second highest shortfall of all county councils for 2011-12. That is on top of figures published yesterday by the BBC showing that public expenditure for the eastern region is the second lowest in the United Kingdom, at £7,300 a head. The north-west receives £9,500, and Scotland receives £10,500. Norfolk suffers for being cast as part of the prosperous eastern region, but figures for the region are skewed by the wealth and prosperity of areas such as Essex and Cambridgeshire. Norfolk has pockets of rural deprivation and, in areas such as Great Yarmouth, severe urban deprivation as well.

My hon. Friend is making a good point. Even relatively affluent regions have pockets of deprivation, particularly rural deprivation, that need to be taken into account. A lot of people who live in more deprived rural environments, particularly older people suffering from fuel poverty, must travel a long way for key services. Is that not a point that he is trying to convey?

My hon. Friend is absolutely right. His county of Suffolk has a shortfall of about £1 million. Rural areas are hardest hit, because people have the least opportunity to use public transport and the most need for access to it. I will come to that point in a moment.

Another funding stream is the bus service operators’ grant, which has been cut by 20% from 2012. That will have a huge direct impact on bus operators. The Select Committee on Transport report “Bus services after the spending review”, published in August, stated that bus operating revenue in England could be reduced by £200 million to £300 million. The impact of that reduction in rural areas must be understood in context: rural authorities already receive less Government grant per head of population than others. The Rural Services Network report by Local Government Futures found that urban authorities receive an average of £487 per head, compared with £324 in predominantly rural areas.

Councils are also exposed to more general increases in costs. Local transport authorities are exposed to the increased costs of providing the statutory concessionary fare scheme. To make up the shortfall, councils are diverting resources from elsewhere, such as previously available discretionary services. Interestingly, since this debate was granted, public discussion on the issue has widened to include concessionary travel more generally. I have been involved with that debate, as have the press in Norfolk. EDP 24 has covered it superbly and supported the Fair Fares campaign, and the BBC and Anglia TV have covered it as well. I will turn to concessionary travel in a moment.

The Transport Committee’s recent report noted that by June 2011 more than 70% of English local authorities had decided to reduce funding for supported bus services, and that the extent of the reductions varied considerably, although, in general, rural, evening and Sunday bus services were most affected, as is the case in Norfolk.

I can certainly confirm what my hon. Friend says. In Devon, 70 bus routes have been cut or rescheduled. I am concerned that the social necessity justifying the provision of bus services by local government is still subject to considerable interpretation.

Absolutely. I thank my hon. Friend, who represents a constituency that illustrates how difficult the issue has been for rural areas. Norfolk is the third worst hit, but Devon has been the worst hit, with a 42% cut of £4.5 million.

The Campaign for Better Transport figures to be published later this week analyse figures requested from local authorities under freedom of information legislation and indicate that 74% of local authorities across England have decided to cut their bus budgets over the period 2011-12 to 2013-14. In Norfolk, to ensure that the cost of the scheme remains within the available budget, the county council has had to announce that it will discontinue most of the discretionary elements that it previously provided, including travel before 9.30 in the morning, the provision of companion passes, and travel all day, every day, for registered blind pass holders.

Norfolk county council’s need to meet the shortfall in future years puts subsidised routes, predominantly in rural areas, at risk. Campaign for Better Transport figures show that £36 million has already been cut from local authority funding for subsidised bus services, reducing funding across England from 2010-11 to 2011-12. In addition, more than 1,000 subsidised bus services have already been cut in the English regions. Rural communities will be the ones most affected by the loss of those services, as their Sunday or evening buses will disappear, bus frequency will be reduced and routes could disappear.

I congratulate my hon. Friend on securing the debate; it is telling how many Members have turned up to participate. Does he recognise that the deprivation around former coalfields and the challenge of getting people in those areas to and from employment makes Nottinghamshire a special case?

I thank my hon. Friend for his intervention. Nottinghamshire’s funding has fallen by £1.7 million, or about 18%, so it, too, will feel the effect of the changes. He is absolutely right that people in rural areas of all sorts have problems with access to transport, whether they are young people looking for work or older people. Bus services can be their only way of leaving their rural community and accessing an urban area for shopping and everyday needs. That is why things are so difficult for rural areas, particularly in Norfolk. Some villages have low bus usage due to low population, yet buses can be a lifeline for people there who are without access to vehicles. They provide their only mode of transport and access to other areas.

In Northern Ireland, rural transport has been provided by community and voluntary initiatives. Does the hon. Gentleman feel that such initiatives could happen across constituencies on the UK mainland? If so, how would that happen?

I thank the hon. Gentleman for his intervention. I agree that we can do more to look at alternative forms of transport and how they can be funded. If he bears with me, I will come to that in a few minutes, but I absolutely agree with the principle of what he says.

In rural areas, public transport is a lifeline. Equally, however, the problem for local authorities and bus companies is that they have to make an economic case; they have to do the best they can with taxpayers’ money to ensure that it is properly invested. As private companies, bus companies also have to look after their financial interests.

My hon. Friend makes some compelling points, and my county of Lincolnshire, which is very rural, also suffers from the circumstances he describes. However, does he agree that bus companies—there are exceptions—too often follow Government or council grants, rather than try to stimulate their own services or provide services based on commercial needs?

On that point, if one is doing statistics, I have the largest constituency represented in the Chamber. I very much support my hon. Friend’s point, but do not the Government need to change the legislation to ensure that local councils control the bus companies, rather than the bus companies being in control? A bus company can drop a route at the drop of a hat, and the local council has no control over the way the company runs that route. That is the origin of the problems we all face.

I thank both my hon. Friends for their interventions. To take them one at a time, I agree that we need to look at more progressive and more flexible options for rural communities, and local authorities need to look at how we drive those forward. There are things the Government can do to encourage that, and I will touch on those in a moment, but we should certainly be nudging people and leading the way in pushing local authorities to look at different options.

There are options in rural areas where a bus route is simply not economically viable for a bus company and where the rural authority might not have the funding to subsidise that route for very low usage. It would be advantageous if people could use a concessionary pass more flexibly, whether in taxis or other forms of community transport. The Government could make such an option available; I will touch on that in a moment. My hon. Friend the Member for Hexham (Guy Opperman) is right about creating the flexibility to allow local authorities to push things forward.

The cuts in funding to rural authorities, which already receive less than urban authorities, combined with the additional cost of providing bus services in rural areas, mean that rural residents are at an even greater disadvantage than urban residents. A 2009 Leeds university study on the use of passes showed that—in Lancashire, for example—76% of passengers live in large urban areas. It also highlighted the difference in the use of passes, with 53% of pass holders in urban areas not using their passes during a five-year period, compared with 71% in village areas. That might be because of lack of bus availability in those rural areas or higher car ownership, but it is clear that the bus scheme pushes higher usage in urban areas. The point is that although rural areas might have lower usage, buses are vital to those who use them. If we are not careful, we will create a vicious circle.

The Commission for Rural Communities and others, including the Countryside Alliance, have highlighted the lack of transport as a key to social exclusion in the countryside, which is already particularly prevalent among young, elderly and disabled members of rural communities, and it can only get worse against a background of rising fuel costs.

Does my hon. Friend recognise—perhaps he will implore the Minister to take this on board—that there is rural and there is rural, and we should not generalise too much? The point about social exclusion is far more relevant in isolated rural areas than in reasonably well populated rural areas. In places such as Meirionnydd in north Wales, we are talking about isolation, which is a very different matter, so I hope we can make a distinction between rurality and isolated rurality.

I thank my hon. Friend for his intervention and support his comments. One important issue on which we need to move forward, and one thing I will ask the Minister to work on with colleagues, is flexibility. In the spirit of true localism, we need to ensure that we achieve solutions that are suitable for an area, rather than just one size fits all, because what suits one place will not necessarily be perfect in another.

I appreciate the opportunity to say that some very good rural bus schemes have been set up by villages in my constituency, and I would highlight Broughton. Local communities, which know their areas best and know the demand, need that flexibility and the ability to come together to form solutions that will be responsive to their needs, rather than one-size-fits-all solutions.

I wholeheartedly agree.

Reduced or withdrawn bus services, which are quite likely in areas such as Norfolk, will make people more socially isolated, and make it harder for them to access employment, education and vital services, such as health care and retail facilities. Casework in my constituency shows that some of those issues are already prevalent. Any further loss of, or reduction in, rural bus services can only exacerbate the problem faced by rural communities, which have already been hit by rising fuel costs, increased reliance on cars and increasingly long and frequent car journeys.

We need to look at options for the future. The Government need to encourage and enable local authorities to provide alternative rural transport models. Where necessary, they should provide additional funding to kick-start that process, and there are exciting examples of that innovative approach across the country. Hon. Members have mentioned some, but let me give a few specific examples.

This September, Isle of Wight council joined bus operator Southern Vectis to form a community bus partnership that is the first of its kind in the country. That follows the scrapping of the council-owned Wightbus to save £175,000 a year. Working in conjunction with town and parish councils, voluntary drivers run some rural services. Southern Vectis provides off-peak school minibuses and driver training. The council has also allocated additional funding for community bus services. That arrangement avoids the problem of capital costs, which confronts many other community transport schemes, removing the risk from the voluntary sector. Before any union representatives complain, I should say that the service is not taking jobs away from existing drivers because it is an additional service, which ensures that existing services remain. As a result of that partnership working, Southern Vectis has won this year’s transport operator of the year award. That is a great example of what can be done.

I echo what my hon. Friend says. Will he admit, however, that there are problems that the council must tackle? There is the problem of people from off the island getting free transport on the island. People come into the area—I am sure this is true of most areas—for a holiday or for some other reason, but there is no income, or insufficient income, to the bus companies.

I thank my hon. Friend, who has first-hand experience of that development. Like him, I represent an area that is heavily used by tourists; in fact, it is the second most popular seaside tourist resort in the country. The system means that areas used by tourists can be further adversely affected. That is partly the result of the complicated arrangement in place for funding bus systems. One of the best things the Government have done—I pay credit to them for what they have done so far—is to simplify the system. Some organisations claim that at one point under the previous Government there were 22 different forms of funding for the bus system. We have got that down to three or four, and it would be a great success if the Government simplified things further over the next couple of years and introduced one funding system that was transparent and understandable to everybody and that sat with one Department.

Another new scheme serves rural Northamptonshire with a fleet of new low-floor minibuses. It allows passengers to book a seat by telephone or text or on the internet so that elderly or frail people can be picked up from home, while others are collected at village bus stops at a set time. That is Northamptonshire county council’s excellent response to the need to save millions by reforming subsidised services. It is much better and more cost-effective, and it reacts much more to the needs of the user than a large, heavily subsidised bus going round villages when it is often empty or close to empty.

I congratulate my hon. Friend on initiating the debate. He has just touched on a point we should all be aware of. We are in a coalition Government, and there are cuts taking place, which we support. In my experience as a Norfolk MP, however, the crucial thing about the local bus service, rather like the local post office, is that people use it or lose it. I am not here to defend the bus companies, but there is all too often public pressure to maintain a service, but when it is maintained, nobody uses it. We need to look at how these services are publicised and ensure that the public are made aware that it is not in the interests of either the Government or individual bus companies to maintain the kind of services that my hon. Friend mentioned. Such services merely go round and round the rural areas and are lucky if they get two or three people using them.

I thank my hon. Friend for his intervention. I fully support what he says. It is important to find a way of ensuring that local authorities can be more flexible in how they work with the bus operators and other forms of community transport, so that they can allow for more cost-effective usage and be more responsive to local needs.

I congratulate the hon. Gentleman on his points. A pilot scheme similar to that operated by Translink in Northern Ireland could be considered as an option. It identifies what services are needed through the community; for example, there may be a run on a Tuesday and a Thursday. Elected representatives work with communities, Translink and the bus companies. We are looking for flexibility. Does he agree that having flexibility within bus companies is the type of initiative needed to ensure that rural communities—isolated ones and others—can have the advantage of rural transport?

I thank the hon. Gentleman for his intervention. We certainly need more flexibility in the system. Whether that is purely in relation to bus operators or we have a system that allows for community transport to be authorised, run and organised by local authorities, we need an approach that is more flexible than simply looking at the traditional system of buses. As my hon. Friend the Member for Broadland (Mr Simpson) has mentioned, buses are not necessarily the most cost-effective solution or, indeed, the best answer for users. We need transport that can be used in rural areas by those with concessionary passes. As I was saying, demand-led services are vital if a rural network of transport is to exist. It is perhaps time to start talking about transport in the rural sense, rather then simply focusing on buses, which might not necessarily give the best service and use.

I am delighted that my county council in Norfolk has agreed to provide additional funding to look at and develop exactly that style of service. At the moment, more than 1,700 community transport organisations operate in England alone and offer transport services for people who are unable to access traditional public transport. It is vital that local authorities and organisations are empowered to provide alternative provision for residents.

An additional £10 million funding for community transport in rural areas is very, very welcome. However, the concessionary fares scheme does not apply to most community transport schemes because they operate under section 19 of the Transport Act 1985. Currently, only registered services run by community transport operators under a section 22 permit are eligible for the scheme. I was disappointed that, when I received a reply from the Minister to a recent written question, it indicated that the Government refuse to consider altering the legislation to widen the eligibility further and that they are leaving the matter at the discretion of local authorities. I ask the Government to look at that issue because dealing with it would be a positive step forward that could further encourage, develop and empower local decisions to be made by local councils and bus and other transport operators based on local need. I agree with the Select Committee on Transport’s recommendation made in August this year:

“If the Government genuinely wants to encourage the growth of the community transport sector, it should legislate to permit the use of the concessionary pass on a wider range of community transport services.”

Would it not be worth while in some way restricting the viability of the scheme, so that someone could arrive on the Isle of Wight from Northumberland and wave a flag? Some local use of these things is fine, but we do not want a national scheme.

My hon. Friend makes a good point in the sense that the national scheme as it has been structured is effectively a bear trap left for this Government by the previous Government. Such a scheme is difficult to sustain and the issues surrounding it have opened up this debate, so that it has become a discussion about how concessionary passes operate. If we accept that a large contributory factor to the rural bus funding crisis is the increased cost of providing a concessionary fare scheme, we have to consider how that can be reformed.

It is absolutely right—I fully support this—that the coalition agreement insists that the Government will continue to keep the scheme. However, we need to find a way to fund it realistically for the long term. That means allowing councils to have enough flexibility to cover administration costs or offer innovative alternatives, some of which I, and colleagues, have touched on this morning.

Residents in Nottinghamshire, for example, may live close to the border of another county and may want to shop in Derbyshire, visit relatives in Yorkshire or travel to Leicestershire to gain employment. It is important that the scheme has the flexibility to allow such residents to move across county borders, so that they can gain access to relatives, employment or health services.

My hon. Friend makes a very good point. In Great Yarmouth, residents from Lowestoft and across the Waveney constituency use the James Paget hospital and need transport to get there. However, there is a difference between that and the use of public transport for tourism. Legislation does give some protection in relation to that, but the system is so complicated that it is difficult to differentiate in some cases between tourism use and required local use. Were we to pursue that in the legislation, it might force the Government to become too deeply involved in the detail of a local system’s provision.

We need to consider, or at least discuss, the potential for reform of the system, so that it is targeted on our poorest or most vulnerable pensioners. We also need to discuss whether the concessionary fare pass should be issued at 60 or according to the retirement age. If we do not have reform, concessionary passes could end up being worthless. For many pensioners in rural areas, having a concessionary pass is useful, but only if there is transport to use it on. Some bus operators have already made suggestions, such as having a flat-rate 50p charge. In some areas, concessionary pass holders are already being asked to pay a voluntary fee and a flat-rate charge per journey.

I accept my hon. Friend’s point about the bus operators. Does he not also agree that the onus is on them to look at their services and proactively engage with local communities, particularly in rural areas, to make sure that they are more responsive to local needs? Far too often, certainly in Suffolk, the bus operators are not responsive to local needs. When a service is non-profitable, they cut the service and it is the frail elderly who lose out.

There is an absolute need for operators to be looking locally and for local authorities to work with local communities and put further pressure on those companies. In Great Yarmouth, we have had examples of routes that have been considered for cancellation and, by working with the local authorities and the bus company, we have been able to restore a usable route that services residents. If a route is simply not economically viable, when money is scarce we need to consider alternative forms of transport that can provide the service that local residents need. That might not necessarily be a bus. We are talking about providing the transport service that is needed in a cost-effective way and that allows people to live their lives productively.

When I recently did an interview on BBC Radio Norfolk, I discussed the possibility raised by bus companies of having a 50p flat rate and an admin charge for getting a concessionary pass in the first place, and whether we should change the age of eligibility to retirement age rather than 60. I was pleasantly surprised because, despite expecting a barrage of criticism, we received some very positive responses. One resident said:

“In regard to the recent news of the deficit we are facing with the bus pass I heard you on Radio Norfolk and thought your opinions echoed mine and I am sure many more. I would be more than happy to pay 50p each trip which would more than cover the debt.”

Cornwall county council, for example, has called for legislative changes to allow pass holders to make a small payment for each journey. It has written to all the county’s MPs to ask them to lobby for such a change.

I congratulate my hon. Friend, who makes exactly the point that I want to make, on securing the debate. During the summer, in meetings in village halls around my constituency, there was universal support for the idea that some people could contribute a flat fee of 50p or £1. I accept that, for people living in poverty and on mean-tested benefits, that would be too much, but there is strong support for consideration to be given to the introduction of a flat fee. In the spirit of localism, the Minister should enable councils to be pathfinders if they want to do so. In this age of austerity, we are enabling many councils to be pathfinders and to work with residents and stakeholders to find sustainable ways of funding vital public services. What better example and lead could the Government provide than to enable certain local authorities to pilot flat fees where there is overwhelming support from residents?

My hon. Friend is right, particularly in relation to overwhelming desire from local residents to see a service continue. We need to be more flexible.

I congratulate my hon. Friend on securing what is undoubtedly an important debate. Following on from that point, in the past local authorities put in seed funding to get rural transport services and rural bus services up and running. If they were successful they carried on, on a commercial level. We must give local authorities extra powers to put some of the money from a flat fee back into the service and, working with the community, to ensure full access to services. It is down to local authorities to work with the community, but they need the power to be able to do so.

My hon. Friend’s contribution again highlights the need for flexibility and true localism. My colleagues and I across Norfolk work together on a range of issues. We know that there are vast differences across our county. Even in my constituency of Great Yarmouth, I have areas of dense population and urban areas in Great Yarmouth town itself, as well as sparsely populated rural areas in some villages. Norfolk, from the centre of Norwich to extreme rural areas, is a good example of how needs, desires and requirements differ. Flexibility is needed.

As a fellow Norfolk MP, it seems appropriate to pick up on that point. I congratulate my hon. Friend on raising this issue, and the attendance in the Chamber indicates the support that he has. Does he agree that we are witnessing a perfect storm? The combination of our elderly population, the marginality in rural areas and energy prices goes to the heart of how Governments through the ages have under-recognised rural deprivation, as the indices they use tend to under-measure rural deprivation. The last time I looked, I discovered that ethnicity was a major driver for Government measurement of deprivation. Norfolk has a very low incidence of ethnicity and a very high incidence of rural deprivation. Perhaps the Minister will comment on that. Does he feel, as I do, a huge public yearning to solve this issue with a bit more flexibility, perhaps with a voucher model in some areas? In general, Government schemes are not very good at delivering what the customer wants. If we empower people by giving them the money that we currently spend, we might find that the public, through the big society model, find their own solutions.

My hon. Friend makes a strong point. To highlight his point about the elderly population, in the next 15 years in Great Yarmouth alone it is estimated that the number of residents of pensionable age will increase by 35%. Given the rural community across Norfolk, that figure highlights how important access to transport is for people of that generation. As I touched on earlier, access is also important for young people in rural areas, where there are issues around deprivation and where we are trying to stimulate and grow the economy and increase youth employment.

A flat-rate charge, which was mentioned, would raise approximately £5 million a year in Norfolk alone. That would safeguard all rural services and the wider network across the county. However, the Department for Transport thus far seems to have adopted quite a negative response to that suggestion. The Department has written to all councils saying that

“requesting voluntary donations to protect a particular route,”

is illegal, and doubts whether they are, in reality, voluntary. The basis of that is that the claim of a threat of removal of a service, without a donation, is tantamount to coercion. There is a very fine line to be drawn.

Other options include making the bus pass liable to an annual fee. A study by Leeds university found that 56% of pass holders did not use it over a five-week period. I have met numerous people recently who have raised the fact that, although they are of an age to have a bus pass and do have one, they never actually use it. The administration cost of issuing passes that are not required, therefore, could be saved. Should the taxpayer provide concessionary passes to those who are still in full-time employment? I made the point earlier about whether the pass is issued at the correct age. I urge the Minister to extend the validity of cards from five years to 10, so that county councils such as Norfolk, whose renewals are due in 2013, do not face the cost of renewing the concessionary passes. For Norfolk county council, that cost is approximately £250,000. That could be better spent on providing rural transport services.

The coalition Government were left with a formal bear trap—a system of transport that is simply not sustainable. The Department for Communities and Local Government and the Department for Transport have both had to deal with a complicated and convoluted form of funding that many organisations have struggled to understand fully. I have a request for Norfolk in particular, but for rural areas in general. We appreciate that money is scarce. As much as we would like to call for the money—the £6 million shortfall in Lancashire, and approximately £4 million in Kent, Norfolk, Devon, Hampshire and other counties this year—we appreciate that the Department for Transport, or the Treasury, does not have the ability to wave a magic wand and deliver such a response. Although county councils might not appreciate this, I suspect that if they felt there was some certainty in the years ahead, they would be able to find ways of dealing with the situation in the short term.

There was a feeling in some county councils, such as Norfolk, that there must simply have been a mistake in the funding formula this year, to lead to such variations from previous years. Sorting out funding in the future does not just require a magic wand. It is vital to ensure access for rural areas and to prevent further rural deprivation and poverty. We need to find a better balance of funding. At present, the system is overly beneficial to urban areas and hugely detrimental to rural areas. Will the Minister find a better balance next year to ensure that rural areas, as I and a range of hon. Members have mentioned, are not so adversely affected in the years ahead? With an ageing population in particular, this cannot be tolerated. It will be detrimental to youth employment in rural areas, to economic growth in such areas, to families and to our country.

I congratulate my hon. Friend on securing this important debate. This is a huge issue in my post bag, as I am sure it is for hon. Members across Norfolk. I agree completely with his point about flexibility. It is not just about the amount of money that we are spending; it is also about how that money is spent. How will flexibility help to deliver more on-demand bus services and better integration with rail services? Two rail services go through the South West Norfolk constituency—the Fen line and the Norwich-Cambridge line. There is an opportunity to integrate those services better with local transport.

I thank my hon. Friend for her intervention. As I said earlier, we need to ask the Department to find ways of allowing local authorities to be more flexible, having a national structure through which local authorities can allow people to use their concessionary pass on other forms of transport. More forms of public transport, more community transport options, allowing local authorities to be more flexible and—I appreciate that I am moving beyond the subject of the debate—even moving beyond focusing only on buses, may go a long way to solve this problem. As we have heard, in some very remote areas of low population, bus usage may not be the most cost-effective way of providing transport. We need to allow local authorities to be able to use funding to allow people to use concessionary travel passes, and have access to other forms of transport that may deliver a better demand-driven service that is also more cost-effective for the taxpayer.

The Eastern Daily Press and the Great Yarmouth Mercury, two excellent bastions of journalism in Norfolk, have been superb in supporting the fair fares campaign, which in just a few days has already garnered more than 2,500 signatures. I call on everybody across Norfolk, who has access to the internet or who can get hold of a copy of either of these excellent newspapers, to join the petition and let us have their support in moving forward to get fairer funding for transport services across Norfolk. I know colleagues have similar views about their own rural areas.

Will the Minister, for next year’s funding round, find more ways to simplify the system? It would be ideal for the system to be planted in one Department in a clear, transparent system that people can understand, to allow concessionary passes to be used beyond the traditional methods, and for local authorities to have more flexibility to provide better, different and more progressive forms of transport that can be more demand-driven and cost-effective for the taxpayer. That would protect rural transport services for the future, and for the use of everybody.

It is a pleasure to speak under your chairmanship, Mr Caton. I congratulate my hon. Friend the Member for Great Yarmouth (Brandon Lewis), who, in the 17 months that he has been in this Parliament, has put the “great” back into Great Yarmouth.

Rural bus services were an issue before the general election and have continued to be so in my constituency of wonderful South Derbyshire—I have put the “south” into South Derbyshire. The difficulty we find in our rural areas is that we can take a bus out on a Tuesday but we have to wait until Thursday to get the bus back. That is not conducive to family life, I find.

I ask the Minister to take on board many of the points made by my hon. Friend and, in particular, the issues of flexibility and whether we can expand opportunities. Shropshire has brought in community buses to act as feeders to the main bus routes. In one village on my patch, Scropton, we have had round-table meetings with three different commercial bus providers. None of them can make that route work but we could find a way for the county council to put the money into feeder, community transport buses if the section 19 arrangement could be changed to allow for that. Will the Minister be kind enough to look at the pilots around the country, because rural, isolated parts of Derbyshire provide an opportunity for the money to be used better, which is what the coalition Government ought to be all about? The coalition should be about freedom, accessibility and using public money wisely.

I congratulate my hon. Friend on securing this important debate and I sincerely hope that the Minister will be able to come up with some excellent answers. I shall stay through to the bitter end of 12.30 to listen to those brilliant answers. If he can sort out the bus issue in Scropton, he would make my life so much happier.

I am pleased to be able to speak on rural bus services. The issue is apposite because on 26 September Northumberland county council issued the report of its bus subsidy working group. I endorse the all-party work, led by Councillor Gordon Castle, to bring together a proper and legitimate way forward for the bus services of Northumberland. The problems of Great Yarmouth presented by my hon. Friend the Member for Great Yarmouth (Brandon Lewis) are common to us all and endemic in all our counties and constituencies. We have a common will and desire to change the policies of the past, which have seen a gradual decline in bus services, to the detriment of people in rural areas. I hope and pray that the Minister will take on board and progress the excellent suggestions arising from today’s timely and proper debate.

I represent the second largest constituency in this country, and rural bus services are clearly an important factor. Without question, the Hadrian’s wall bus service provided by the Hadrian’s Wall Heritage company and Northumberland county council provides a great service for tourism. Not only rural bus services are at stake, however, and I do not want us to fall into the trap of being champions solely of those suffering from rural fuel poverty and poor rural bus services, because those matters are also common to the market towns and villages in our constituencies. Those areas are not fundamentally rural, but include 5,000 or 3,000-people towns that are absolutely dependent on bus services. All of us could highlight individual areas of rural bus poverty—if that is the proper expression—that we could describe, note and champion, but the little towns and villages also need support. That is what I particularly want to discuss.

I have the great fortune—I express that passionately—to have three particular bus champions in my constituency who regularly fill my postbag. In Prudhoe, I wish to cite Robert Forsyth and Amanda Carr, who promote the cause of buses and are, quite rightly, on the case of bus companies such as the euphemistically named Go North East, which does not seem to go very far or to continue to go very often—it would be well named, if only it fulfilled its name. They champion the desire of local people to have buses that support them in local villages. The Hexham Courant, my local paper, has supported Mrs Carr. Her mother and mother-in-law try to take the children to and pick them up from school using the local bus service but, if it goes, they will not be able to do so, so continuing to work will be impossible and there will be huge difficulties on the way ahead.

My hon. Friend is making some good points. People often think that rural bus services are a bit of a luxury—some have cars sitting in their drives but choose to use bus passes because they have them—but they underestimate the poverty and the number of those struggling on low incomes who use the buses to go to work, school or hospital. In Cornwall, we have only one acute hospital for the whole county, which is more than 100 miles long. CAB Cornwall, the citizens advice bureaux, has done some excellent work showing the cost to society of the lack of affordable access to transport. High numbers of people miss doctor or hospital appointments, which is detrimental not only to personal health but to the whole of society because of the costs of them not accessing such vital services.

As always, my hon. Friend makes a telling point, and I endorse entirely what she said.

Certain organisations are stepping into the breach, and I would like to support the work of Adapt, which has stepped in to provide an essential public service but has gone further than traditional countryside bus provision. It targets those who need the service by operating a dial-a-ride scheme, picking up local residents from their home. The service has proved extremely successful and invaluable to those with young children and to the elderly, who felt that their access to buses was limited under the old, more traditional provision. I totally endorse the dial-a-ride system as the way forward for traditional rural bus services that are failing to provide.

I want to finish with two particular points, which relate to what the Government can do for us, touching first on integration and secondly on the degree of control that Government and local councils have over bus services. I represent a constituency that is entirely in Northumberland, but Durham is below me—it is good to see my neighbour in the Chamber, the hon. Member for North West Durham (Pat Glass)—Cumbria is to the west, Newcastle is to the east, and the bus services have to integrate. I also have Scotland to the north and, although we do not have an awful lot of bus services to Scotland, there should still be a degree of integration.

The sadness is that there is no integration between individual bus services operating in one county and the next—that must come from the Government giving guidance. We have the bizarre situation of the bus companies literally not talking to each other, let alone planning individual services with each other.

To go further, we rightly have a degree of competition, with bus companies able to provide local bus services, but we can have the bizarre situation of two bus companies competing for the same journey, with the result that neither can make a profit or provide a service and we end up with no bus company in that area. The Government must be able to find some way to enforce a degree of integration when the ultimate contract is awarded to a bus company, so that the parties and partners work together and not against each other.

To reinforce that point, I have an example for the Minister. If I am a concessionary pass holder in Wales, I cannot use my pass in England, but if I am one in England, I can use my pass in Wales—there are one or two exceptions in north Wales and the border counties. That situation displays a ludicrous lack of foresight. If the Minister can square that with the Welsh Assembly, he would be doing an even better job than he is doing at the moment.

I am grateful for the example. We could all provide examples of our bus companies and the respective counties in charge of bus services not working together. There are good examples: we have a partnership in Northumberland with the Newcastle system, which works very well, but it is an isolated example, sadly. I urge that degree of integration. Surely that is localism in its purest form—the degree to which local organisations talk to each other, rather than existing in a silo, which has been the case for so long.

I finish on the point I made to my hon. Friend the Member for Great Yarmouth. The Local Government Association is in broad terms seeking greater control of bus companies. We have the Government as the ultimate provider, which is passed down to county councils, and the county council then abrogates the responsibility to individual bus companies. The bus company then runs the show. It can stop a service, or do whatever it likes with it. The Government must give guidance to the local authority so that it works with the bus company, and the company does not stop a service just because it does not like it after the contract has been awarded.

Will my hon. Friend consider a problem that applies to the Isle of Wight? I do not accuse Northumberlanders of this, but in some areas—mine is one—there is a bus monopoly. In my constituency there is a complete monopoly, and one bus company covers the whole island. There is no entry, and that should be considered.

The point that my hon. Friend made about the Government communicating with councils is key. Whether on integration or the funding formula, one of the biggest issues for North Yorkshire county council was that it was landed with a £5 million deficit with no communication from the Department for Communities and Local Government. I urge him to press his point, and to press the Minister to bring county councils that have been particularly affected down to London now, to ensure that the next settlement is better organised.

It is hard for me to improve on the last two points. Both hon. Friends made good and telling contributions. Greater localism, which surely brings all parties together, is a way forward. The individual silo system, with individual counties and companies working alone, has existed for far too long. It is for the common good and ultimately that of the Government to bring everyone together, bash their heads together, and get a better system.

It is a pleasure to serve under your chairmanship, Mr Caton. I warmly congratulate the hon. Member for Great Yarmouth (Brandon Lewis) on securing the debate, which is so important to so many of us. As my colleague, the hon. Member for Hexham (Guy Opperman), said, we have exactly the same problems, although there is a border between us. The problem is huge in North West Durham, and in a huge rural area, which many hon. Members here represent.

When I talked to my local authority about the problem, it said that it took a £400 million hit in cuts, with a 28% cut in local transport. It has simply passed that 28% cut across to local bus services and subsidies. I am sure that some hon. Members here will be in a worse situation, but some communities in my constituency have no buses on Sundays, some have none after 6 pm, and some have only one bus a week. Some communities have no buses at all. That has hit the elderly, the disabled and, particularly in my constituency, the young. We have not heard much about young people, but they tell me that my county has cut all home-to-school transport to the absolute legal limit. It has cut all home-to-school transport to faith schools, which has had a massive impact in my constituency, and all home-to-school or home-to-college transport for those aged 16 and above.

I am glad that the hon. Lady raised school transport. Derbyshire county council is holding massive consultation on the issue. Some of my villages are astride roads such as the A50 and the A38, which are major roads, and the thought of 11, 12 and 13-year-olds trying to cross them because they are on a route as the crow flies is bizarre. I thank her for bringing up education transport.

I agree with everything that the hon. Lady says. In parts of my constituency, as the nights are getting darker, young people from age 11 must walk home along roads that are unsafe because they do not have footpaths or street lighting.

The problem also affects love. Cat Walker came to my surgery a few weeks ago and said that it had taken her four hours to get to see her boyfriend. He lives in Harrogate, she in Skipton. The problem is having a detrimental effect on young people’s love interest.

I was coming to that—not exactly love, but young people’s prospects. They tell me that they are being forced to take courses at local schools and colleges, when that is not the right choice for their future. The problem is having a long-term impact on young people’s relationships and their future, which also has an impact on society generally and the economy.

As with everything, some people are never pleased. I have had constituents at my surgeries with real issues about education, isolation and so on, but I have also had constituents who obtained many signatures complaining that the local bus no longer passes their house and they must walk half a mile to the nearest bus stand. It is difficult to sympathise with them.

There are issues concerning deregulation and monopoly. In parts of my constituency, there is one bus company and it can do what it likes. I had experience of that recently, and had to bully and threaten the chief executive of the local bus company to join me at a village public meeting. The purpose was not to have a go at the company, which I accept must make a profit, but to enable people to make constructive suggestions about how to provide local transport and how to deal with problems of the sort that we have heard about today.

The problem will affect us all, and it is incumbent on us to do something about it. An elderly couple, who are close to me and who had a car, were reasonably well off and things were fine. They moved back to a village in Durham where they had grown up. The gentleman had a bad stroke, but things were still fine because his wife could drive, so they could get about to the shops and to hospital appointments. She was then struck down with macular degeneration and is going blind, so she cannot drive. They are in a dreadful situation. They have a lovely bungalow that they cannot sell because of the economy. They cannot get to the shops, and the bus that used to run within a reasonable distance has now stopped. In a short time, that couple, who reflect many of us and our constituents and whose situation was relatively okay, found themselves in serious difficulties. Whatever the Minister does—whether on flexibility and funding, flexibility and regulation, or flexibility of local transportation—something must be done, and quickly.

I congratulate the hon. Member for Great Yarmouth (Brandon Lewis) on securing the debate. It has been worth while, but we will see how worth while when we hear the Minister’s answers. I will speak briefly to give him as much time as possible to expand on the points that have been raised, particularly the free bus pass, which I shall say more about in a moment.

[Mr Lee Scott in the Chair]

It was a pleasure to see you in the Chair, Mr Caton, and it is now a pleasure to see you in the Chair, Mr Scott. There has been a lightening transformation.

Barrow and Furness is a semi-rural constituency in Cumbria and it has been hit incredibly hard, as have many other rural areas. In my patch so far, we have campaigned for a temporary and partial reprieve for some services, but a great question mark hangs over them, as is the case in many of the areas that have been referred to. I grew up in the red republic of south Yorkshire, as it was then, when my right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) was the firebrand leader of Sheffield city council, and one could go anywhere in south Yorkshire for 10p, or for 2p for juniors such as I was. Back in those days, we did not anticipate Norfolk county council joining the agitation about buses, but that is a sign of our changed times.

There is great consensus on some of the points raised today, and Government Members might wish to see me as someone who said what he really thought. Government Members are polite people who are looking to their future in Parliament. The triple whammy effect was mentioned, and it is being severely felt. The hon. Member for Great Yarmouth was polite when he explained that when he looked at the settlement for Norfolk he thought it must have been a mistake. I suggest, however, that it was not an unintentional mistake, that there is clear intent by the Government to impose cuts that the Opposition believe go too far too fast, and that real, lasting damage will be caused to communities.

I understand what the hon. Gentleman says, but he must not conclude from our criticism on one issue that we would criticise on others. I would like to see where he would make cuts in place of those areas in which he wants us to get some balance.

I am not alone in my criticisms, or in suggesting that some cuts have gone too far and that more funding should be made available. The hon. Member for Great Yarmouth mentioned additional funds to kick-start rural initiatives. That is an interesting idea and I wait to hear whether the Minister will take it up and where he will find the money.

I thank the hon. Gentleman for his support in some parts so far. The key point in my closing remarks concerned looking at the balance of funding, not overall funding. We must deal with our economic deficit, but we must also look at the balance between urban and rural areas.

Part of the problem suffered in rural areas might not have been as severe, or might not even have existed, if the legislation passed by the previous Government in 2000 and updated in 2008—that on quality contracts, effectively franchising agreements—had been used. Those contracts have not been implemented by any local authorities, despite it being agreed that that would be a good move forward. That may be because the previous Government created such a convoluted and complicated system that no one could work their way through it, which highlights my request to find a better way to simplify the system so that some of the quality contracts can proceed. That may be part of the solution and provide the flexibility that many of us are looking for. Perhaps the hon. Gentleman will comment on that.

That is an interesting point. We thought that quality bus contracts were an important move forward and they were successful in some areas.

I am sorry to interrupt the hon. Gentleman, but I want to clarify the fact that, according to the House of Commons Library, not a single contract has been implemented thus far. I am not sure what area he is referring to when he says that they have been successful.

My hon. Friend says Tyne and Wear, and I am sure that the Minister, who has inherited this situation, will tell us where the contracts have been a success. There was progress in some areas, but we need to go further. I shall move on to that in a moment.

Some areas have not been mentioned in the debate, but they face severe cuts, and some local authorities, such as Cambridgeshire and Hartlepool, are threatening to withdraw funding from all supported bus services. My hon. Friend the Member for North West Durham (Pat Glass) set out some of the problems in her area. Elsewhere in the north, Teesdale faces the prospect of having no buses at all from Christmas. That will be devastating for those affected, who often rely on buses as their only way to get around, be it for work or leisure, or to get the basic essentials. We have heard different perspectives on what the solution should be for such areas, and I ask the Minister to say more about the transport and services that we as a country are prepared to support.

I have been listening very closely to the past eight minutes of the hon. Gentleman’s speech. Prior to that, we were having a cross-party debate in which all Members agreed that things could be done. I accept that we are in an age of austerity and that individual councils, whatever their political make-up, have to make big decisions and face difficult problems. Thus far, however, the shadow Minister has solely addressed the lack of funding—which is, of course, a difficult issue—but he has not said what he would do on behalf of the Opposition. That is what I would like to hear, perhaps in relation to comments made by my hon. Friend the Member for Great Yarmouth (Brandon Lewis) and other Members.

In that case, I am delighted that the hon. Gentleman will be sticking around in the debate.

There is a debate about what kind of transport service we should have. I understand the point made by the hon. Member for Broadland (Mr Simpson) before he had to leave about “use it or lose it”, but equally, the point has been made that some rural areas will never experience the mass usage of public transport seen in more urban or built-up areas. We should not say as a country that because some services are not frequently filled to the brim, we should be prepared to remove them. We want greater focus on dial-a-ride schemes such as those mentioned today, and we must find alternatives to running large buses that are never full through rural communities—such a system is not satisfactory on cost grounds because, as the commercial operators of those companies say, the cost per passenger is often sky high. Neither does it satisfy us on environmental grounds, so we must be bold in enabling communities to look at alternatives.

One key area that the Government should explore concerns empowering local authorities and handing greater control to local areas to fund and support the services they want. Funding and support from central Government are critical to that, and the scale of the cuts is having a devastating effect in some areas. There is frustration in many parts of the country, be they rural or urban, about the inability of local authorities to access all the disparate funding streams that go into supporting buses, and at the way that services are contracted. In areas such as Barrow and Furness, some services within the town and elsewhere are commercially viable, while others require support. It is time to look again at how we are forced to contract out those services and cannot mix up the provision and procurement that currently goes to private providers. When the Minister rises to his feet, I would like to hear what he thinks of our idea of integrated transport authorities, and about what can be done to enable swift moves towards that and give local communities more authority.

We need to address the issue of free bus passes. I am fascinated by the idea that that was a bear trap left by the previous Government—the idea is that new Ministers have fallen into it and been trapped—because I am sure that before the election I heard the Leader of the Opposition, now the Prime Minister, accusing his Labour opponents of lying when they suggested that there could be a change or a threat to the free bus pass for the over-60s as installed by the Labour Government. Now we see Government Members queuing up to say that it is wrong and should go.

I am sorry to take up more time, and I appreciate the hon. Gentleman’s generosity in giving way.

I want to make it clear that I did not hear a single Member talk about getting rid of concessionary bus passes. We should get that on the record. The bear trap was mentioned particularly with reference to the structure and style of financing for the transport subsidies that go across bus services. The concessionary transport issue requires a wider debate, but not a single Member here made the statement that the hon. Gentleman has just attributed to us.

I say to the hon. Gentleman and to other hon. Members who have stayed to the end of the debate that a free bus pass is a free bus pass and a promise is a promise. There are other areas where promises have clearly been made and immediately broken. If the hon. Gentleman wants to go out to the country and say, “Yes, we did promise that this would remain free to the over-60s, but that is no longer going to be the case. When we accused our opponents of lying when they said that we wanted or were threatening to take away the free bus pass, that was all just a smokescreen and the sort of thing that you say before elections, and actually we were planning to do that all along because it does not make sense,” I will welcome his being honest and doing that. Let us see how he gets on in his constituency.

No, I will not give way again, because I said that I wanted to give the Minister time to reply. I am trying to wrap up my contribution now.

I hope that the Minister will answer all the very well-put points that have been made, many of which were to be in my speech, but which I have not repeated because there is such consensus on some issues across the divide. Will the Minister guarantee that the free bus pass for the over-60s will remain for the lifetime of this Parliament as both parties clearly guaranteed to the British people before the election?

I think the hon. Gentleman means three parties.

Mr Scott, it is good to see you in the Chair, given your transport expertise. We are delighted to have you here. I thank the hon. Member for Great Yarmouth (Brandon Lewis), my coalition colleague, for raising the issue of rural bus services and securing time to allow us to debate these important issues. There has been a very good turnout. I welcome that. It is helpful for Members of Parliament to make it clear that they do value bus services and, in particular, rural bus services. The tone of the debate has been positive and constructive. Hon. Members made a number of very good points, which I will try to respond to in the time available.

I know from my own constituency that buses are a lifeline for many people in rural areas, providing access to jobs, schools, health care and social activities. Good bus services contribute to both the Government’s key transport priorities: creating growth and cutting carbon. By providing an attractive alternative to the car, we can not only cut carbon but, at the same time, unclog the congestion that can choke off local economies. That applies particularly to towns.

We are committed to reducing the budget deficit, as has been said and as hon. Members have accepted across the Chamber today. Every sector has to play its part. The shadow Minister, the hon. Member for Barrow and Furness (John Woodcock), will remember that the Labour party was committed to £44 billion of cuts as well. We must recognise that every sector has to play its part. However, we have a duty to pay particular attention to those who are most reliant on buses, such as the people referred to by the hon. Member for South West Durham—

North West Durham. Well, I am sure that there are some people in south-west Durham with similar issues.

Central to all this is our commitment, as part of the comprehensive spending review, to continue our financial subsidy of bus operators. Bus service operators grant remains untouched for this financial year. Notice of 18 months or thereabouts was given of the changes. The 20% savings are to be introduced from next April. That 20% reduction represents a good deal for bus operators and passengers when compared with reductions to budgets elsewhere. Although it will inevitably have some effect on fares and services, I have been assured by operators that that will be only at the margins. Indeed, after the spending review decision was announced, the industry said that it felt able to absorb the reduction in bus service operators grant without raising fares or cutting services.

With respect, we are not talking about the change to bus service operators grant. That is yet to come. We are talking about the impact of the cuts to local authority budgets. The situation is bad enough, but next year it will get far worse with the change to bus service operators grant.

If I am allowed to make some progress, I will of course address that point. I am trying to structure my response. The hon. Member for Great Yarmouth, whose debate it is, referred to these issues: bus service operators grant, local tendered services, support from local authorities and concessionary fares. I will deal with each of those. The point that I am making on the first one is that it is not an issue that should concern hon. Members, because the bus operators themselves have said that the reduction can be absorbed. Therefore, BSOG is not a problem in terms of the services provided.

Just to be clear, is the Minister saying that he is clear that there will be no further reductions in services as a result of the reduction in BSOG next year?

I am saying what I was told by the Confederation of Passenger Transport. Immediately after the spending review, it indicated that in general terms it felt able to absorb the reduction in BSOG without an effect on services or fares. That is what it said. I am happy to provide the quote if the hon. Gentleman wants to see it.

It should also be recognised that, even in places such as Norfolk, about two thirds of journeys are on commercial services and are therefore unaffected by what local authorities decide in relation to their own budgets.

Let me turn now to concessionary travel and say first very plainly that, even in these times of austerity measures, the coalition Government are firmly committed to protecting the concessionary bus travel scheme. That was made clear in the coalition agreement, and the Chancellor of the Exchequer reconfirmed that commitment in the spending review. The scheme is of huge benefit to about 11.5 million people, allowing free off-peak travel anywhere in England. That generous concession provides older and disabled people with greater freedom, independence and a lifeline to their community. It enables access to facilities both within and outside their local area and helps them to keep in touch with family and friends. Travel to visit popular tourist destinations can also bring benefits to the wider economy.

The Government are aware of how precious the benefit is to older and disabled people, which is why we are focusing our efforts on assisting local authorities to find efficiencies through reforms to administrative arrangements for the scheme, rather than cutting back on the entitlement. For the avoidance of doubt, the free bus pass is here to stay.

My hon. Friend is quite correct in what he quotes. I fell into the bear trap that the Labour party left for me, and so did my right hon. Friend the Prime Minister, as far as I can see.

I was wrong to support the scheme, but I supported it and I will support it for the rest of this Parliament. What happens then is a matter that we will have to debate and develop.

I can say to my hon. Friend to be helpful that a number of well-meaning people who are very committed to bus services have raised similar points to the one that he has raised. Those points have been noted and passed both to the Department for Transport and elsewhere in Government. However, we are clear about the commitment that we have made to the free bus pass, and that is not going to change.

I should at this stage pick up a point made by the hon. Member for Great Yarmouth about trying to save money on administration in relation to the bus pass. That is right. We need to consider those types of saving. That is one reason why we were supportive of the idea of moving the administration from districts to counties, which saves considerable costs in the administration of the bus pass.

Only one small change has been made to the entitlement to concessionary fares: the age of eligibility has been increased in line with the changes taking place to the state pension age. That is right, as people are living longer, staying healthy longer and tending to stay in work until later in life. That change started in April 2010, just before the last general election, so local authorities are already making savings as a result. The change will assist with the financial sustainability of the scheme, while reserving the benefits of the bus pass for those with the greater need.

What has not changed at all—this is an important point—is that operators should be reimbursed for concessionary bus travel only on a no better, no worse-off basis. That is in primary legislation introduced by the previous Government. Nothing that this Government have done has changed that at all. Almost a year ago, the Department for Transport published revised guidance to local authorities to support them in determining their arrangements with bus companies, to make sure that they are no better and no worse off. I made that clear in my recent letter to the hon. Member for North West Norfolk (Mr Bellingham) and my hon. Friend the Member for North Norfolk (Norman Lamb), both of whom came to see me to talk about bus services in the county.

In a report published in May, the Competition Commission strongly commended the guidance issued by my Department, since it helps local authorities to take account of the impacts that the concessionary travel scheme can have on commercial pricing policies. The commission says that it hopes that the guidance will be followed to the greatest extent possible. In fact, the majority of local authorities are now using the guidance and should be reaping the financial benefits of taking it on board. I stress, however, that it is entirely a matter for them whether they use the guidance or not. There is no compulsion to do so. The only compulsion is the one that existed in legislation introduced by the previous Government to ensure that bus companies are no better and no worse off from operating the concessionary fares scheme. The guidance can be a useful starting point for negotiation between bus operators and local authorities and, so far this year, more than half of the appeals lodged by operators have been withdrawn—a significant improvement on previous years.

I remind Members that our funding for bus travel does not stop at concessionary travel reimbursement and bus operator subsidy. We have also provided almost £47 million to local transport authorities and bus operators to purchase 542 low-carbon buses across England, through our green bus fund. I would also like to refer to our new £560 million local sustainable transport fund, which this Government have introduced. There have been 39 successful bids in tranche 1, 25 of which have included bus-based elements to help bus travel locally.

Turning to the third element, I recognise that the recent local authority settlement has been challenging. There is no doubt about that. I have heard the argument that the distribution method used at the time does not reflect the particular circumstances facing each local council. That has been brought into sharp relief now that, since April, all funding for the statutory concessionary travel scheme has been provided as part of the settlement from the Department for Communities and Local Government. I should point out, however, that last summer’s consultation by that Department provided an opportunity to influence the final distribution method for the first two years of the spending review period. The overall funding then set was deemed by DCLG to be sufficient to enable local authorities to deliver effective local services, while ensuring that authorities do not set excessive council tax increases. Councils now have another opportunity to make their voices heard. DCLG is consulting on the broad options for a new way of funding local government, based on business rates retention.

The Government are clear that any changes must protect the interests of local taxpayers and the vulnerable, be fair for all councils and encourage growth. Councils that are more deprived—I accept the point that has been made about the definition of deprivation—will continue to receive central Government support. We recognise, however, that it may be possible to improve the way local council spending on concessionary travel reimbursement is treated in allocating local government resources. That is why, following my meeting in April with the hon. Member for Great Yarmouth, my hon. Friend the Member for North Norfolk, the hon. Member for Broadland (Mr Simpson), my hon. Friend the Member for Norwich South (Simon Wright), and the hon. Members for South West Norfolk (Elizabeth Truss) and for Mid Norfolk (George Freeman), I wrote to the Minister for Housing and Local Government on 20 July about the way formula grant is calculated, the relative needs formula for concessionary travel, the so-called floor-damping mechanism, and the local government resource review. That is why the consultation considers whether to review the relative needs formulae for concessionary travel when establishing the baseline for local government funding from 2013-14 onwards.

I welcome the review of local government funding formulae. One area of reimbursement that the Minister has not mentioned, and on which I hope he will give an assurance, relates to parts of the country that welcome lots of tourists but are not, at the moment, reimbursed for the cost of honouring concessionary fares. Can he assure us that the review will consider that?

I can give an assurance only that, first, that point was made to me in a meeting with Norfolk MPs, and secondly, that it has been reflected in comments that I have passed on to DCLG. I am happy to share the reply that I received from the Minister for Housing and Local Government. He confirmed that he had received the letter and that, in his view, the new business rate retention system is likely to address Norfolk’s concerns. That was the official response from DCLG and the Minister thinks that that is part of the answer. There is recognition, at least, from DCLG that Members in Norfolk have a legitimate concern about the matter, and it is therefore being factored, I think, into the Department’s thinking.

Let me now turn to reductions in tendered bus services, which in England comprise about 22% of bus services, while the rest are commercially provided. As I have said, the recent local government finance settlement has been challenging, but I am still disappointed that in some areas local councils have responded by taking the axe to local bus services in a rather unimaginative way. This hits particularly hard in rural areas where supported services make up a higher share of the total than in metropolitan areas. I am naturally concerned when I hear that vulnerable people with few other transport choices have lost their only bus service, or that children have reduced public transport access to the school of their choice. It would seem that there is also an impact on people’s love lives and on cats, but perhaps I should keep away from cats.

Some councils, such as Cambridgeshire, have unfortunately taken an almost slash-and-burn approach to bus services, while others, such as East Riding, where the percentage cuts are in single figures, have been much more considerate and careful in their decisions. There is therefore a big difference—this is part of localism—between the responses of individual councils. People are now empowered to ask why their council has made cuts in their area when similar cuts have not been made across the border. I hope that people will start picking up on these differences and challenge their councillors accordingly. That is part of the answer to the point that the hon. Member for Skipton and Ripon (Julian Smith) made about North Yorkshire, because the position in North Yorkshire is very different from that in, for example, East Riding.

I was encouraged to read in a recent press release by Norfolk council that it has been able to make significant savings this year with

“very little disruption to bus services.”

Another example is Dorset, which I understand is making savings of up to £1 million this year through an innovative procurement model. That is something that I am examining to see whether there are lessons that can be rolled out to other councils throughout the country.

I am interested in the point made by the hon. Member for South Derbyshire (Heather Wheeler) about feeder services in Shropshire. Section 22 community transport services can qualify for concessionary travel, so it is possible for them to be included in a proper arrangement for a planned bus network.

I am also keen that local authorities make the most efficient use of their resources, whether that means combining adult social care transport with patient and school transport, or providing more flexible forms of public transport in areas where commercial services are not available. In Cheltenham, for example, Gloucestershire county council has replaced a costly subsidised bus service with a route operated by a community transport group, which integrates school transport in the mornings and afternoons with a scheduled timetable open to the public in between. I think that that is the sort of initiative that the hon. Member for Great Yarmouth was suggesting might be applied more widely.

On community transport eligibility, as I have mentioned, section 22 services qualify. Section 19 services do not, because the Department has long held the view that, because they are on-demand services and available only to specific groups of people, it would not be fair to extend concessionary fare eligibility to them. It could also undermine existing tendered or commercial services. They qualify, however, for bus service operators grants, so there is support.

I am conscious of the time, but let me pick up one or two of the points that have been raised. The hon. Member for Hexham (Guy Opperman) made a point about integration across counties. Local authorities have powers to work together with operators of commercial services across boundaries to integrate timetables. That is done in some areas, such as Oxford and Sheffield, so the powers are there and were, in fact, reinforced in the Local Transport Act 2008. It is up to local authorities to use the powers that they have. There are no quality contracts in place at the moment. The legislation exists to allow them to be formed. There are statutory quality partnerships, which is perhaps what the hon. Member for Barrow and Furness was discussing. If local authorities want to avail themselves of the powers in the 2008 Act, they can do so. Some of the legislation is slightly complicated. In fact, when I was in opposition, I wanted to go further, in line with some of the comments made by Government Members during today’s debate, but that did not find favour with the previous Government.

The Competition Commission has produced this week its provisional remedies for the bus market. The Department for Transport may need to look at those carefully. Perhaps some solutions will help to address some of the issues that have been raised today. The hon. Member for Hexham talked about more council control, which is what the Competition Commission is suggesting, particularly in terms of multi-operator ticketing.

The hon. Member for South West Norfolk raised the issue of rail-bus integration.