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Concessionary Bus Travel Bill [HL]

Volume 689: debated on Monday 5 February 2007

Read a third time.

Clause 1 [The national concession]:

1: Clause 1, page 1, line 14, after “vehicle” insert “or community transport vehicle where a suitable public service is not available”

The noble Lord said: My Lords, we have previously discussed the exclusion of community transport from the Bill. I have chosen once again to present this amendment due to the importance of community transport to some of society’s most vulnerable people.

Drawing on my experience as leader of Essex County Council, I can tell your Lordships that many of our residents, even in places like Essex, live in rural locations, which necessitates the provision of community transport as the most efficient method of providing a convenient and effective service, particularly to those in the most remote settings. The alternative is to commission bus services to those areas that, due to the spread of the population there, would transport only a minimal number of passengers. Not only is that economically inefficient, it is irresponsible, as carbon emissions per person on such a journey would be very high. As an advocate of efficient and sustainable public services, I find the notion of empty buses touring the countryside unpalatable. It was suggested in our previous debate that community transport would stop the use of some rural buses. I am not advocating that; there are times when community transport is the most suitable way to serve rural areas.

The people who live in remote areas, particularly older people, would often be those who would benefit most from the concessionary fares scheme. Excluding community transport from the scheme demonstrates the paradoxical nature of the Bill. There is the intention to enable older and disabled people to participate more fully in their communities; however, that good intention is overshadowed by allocation of funding going only to those who enjoy regular bus services.

At our previous debate, the Minister’s response to this suggestion—and I am sure it will be the same today—was that local authorities can expand the provision of the scheme at their discretion. However, local authority leaders need the money to be able to do that, as we will be discussing later.

My authority spends around £75 million on transport of all kinds. To get best value out of that means joining various uses, such as transport for schoolchildren being available for people going to disabled centres, elderly people, and so on. Anyone who knows anything about local area agreements in local authorities knows that the money is pooled. To get the best value out of it you would need the sort of transport I am describing, not bus services. Therefore, the people whom I am talking about would not benefit from this legislation.

I still hope that the Minister can see some way in which the Government could bring community transport into this area, if not now later on, as it becomes more necessary to look at varied methods of transport. The Community Transport Association found that only a minority of authorities provided reimbursement to community transport schemes, and those that did so usually only reimbursed half, rather than the full cost. I strongly argue that this Bill could discriminate against rural communities and against the disabled and older people in those communities. I hope that even at this late stage the Minister could reconsider this matter. I beg to move.

My Lords, I support the noble Lord, Lord Hanningfield, on Amendment No. 1. I will speak to Amendments Nos. 2, 3, 7 and 8, which are grouped with Amendment No. 1. Amendment No. 2 deals with the extension of the transport concession to a companion whose assistance a disabled person may need to travel on public transport, and Amendment No. 3 deals with the definition of mental disability.

Amendment No. 2 would entitle a companion to travel free of charge where a disabled person needs their assistance to be able to travel on public transport. Amendment No. 3 seeks to introduce a more straightforward definition of mental disability by reference to the Mental Health Act 1983. On Report, I said that I thought more streamlined amendments might be brought forward to deal with the definition of mental disability in a neater way, and Amendment No. 3 is one of those. Amendments Nos. 7 and 8 parallel Amendments Nos. 2 and 3 with respect to the London scheme.

I do not propose to detain your Lordships overlong with these amendments. They stand together in a group that seeks to extend the scope of the Bill in a number of ways. We say that they are marginal extensions, but the Minister has made it clear that he does not agree. He may concede that the extensions are marginal when set against the total extension of concessionary travel introduced by this Bill, but at all events he has made it very clear that the Bill already does a considerable amount and it simply is not possible to push the envelope any further at this stage. I respect that view. He has been very fair. We have had a full debate, and he has explained his position fully and carefully. I thank him for his very open and accessible approach and his willingness to engage in dialogue on the amendments.

The Bill already achieves quite a lot; I believe the Minister said it was going to cost an extra £1 billion. I know that he is not unsympathetic to the points of principle that we are raising, and that it is simply a question of resources at this time. I know that he will continue to reflect on the matters that we have raised and will undertake a review to see whether it might be possible to do more at a later stage. In particular, Age Concern would like to see the Government producing a report within one year on a concessionary solution for people who do not have bus services in their area or who, for one reason or another, are unable to use bus services. Help the Aged has also recently published a study on local bus services and travel concessions, which I commend to the Minister. If he could tell us that he would be prepared to look at those reports, reflect on them, and see how the matter might be taken further at some later stage, that would be a very helpful conclusion to this debate.

My Lords, I am grateful to both noble Lords for raising these important issues, which we considered at earlier stages of the Bill. As I have explained, the Bill is about expanding the geographical scope of concessionary bus travel, not about extending the concession to other groups of people or other modes, as envisaged by these amendments.

As the noble Lord, Lord Hanningfield, was generous enough to acknowledge, the Transport Act 1985 provides local authorities with considerable flexibility to offer more than the statutory concession to their residents. There are numerous examples of councils offering concessions to additional groups of people and companions of disabled people and, as we discussed at other stages, concessions on community transport services. I understand that the noble Lord, Lord Hanningfield, was emphasising the money aspect. We shall have a chance to discuss that later this afternoon but, at this stage, I indicate that his amendments would cost money.

The Bill does not stop local authorities continuing to use their discretionary powers to provide enhancements to the proposed national minimum, taking account of their local circumstances. The Government have sought to provide local authorities with more freedom and flexibility in choosing how they use their resources so as to best reflect their local priorities. That approach has been supported by local government.

As I indicated on Report, at present we are not in a position to commit further funding to concessionary travel. As the noble Lord, Lord Low, indicated, a very sizeable sum has been allocated for the introduction of the main proposition behind the Bill. Therefore, I am sure that noble Lords will agree that we have already done a great deal to improve the well-being of older and disabled people, who are among the most vulnerable in society.

I hope that noble Lords will forgive me for repeating that from April 2008, as the noble Lord, Lord Low, generously acknowledged, the Government will be providing around £1 billion of funding each year for concessionary travel in England—a major public spending commitment of which we are rightly proud. The extension from the local to the national entitlement alone involves substantial new money of up to £250 million.

Although the costs associated with these amendments are not likely to be hundreds of millions of pounds a year, they are significant. This is, of course, money that would have to be found from other areas. On Report, I provided the department’s initial estimates of the annual cost of the extensions envisaged by the amendments—around an extra £10 million a year for carers, approximately £50 million for people with mental impairments and at least £25 million for community transport. Those costs are purely indicative and could be much higher, depending on the eligibility definitions, which are far from clear at present, the degree of take-up, the extra concessionary travel which may well be generated, the switch from other modes, travel behaviour and the amount of additional capacity required. The existence of all those inter-related factors, which at this stage we can only estimate, makes the issue of costs very difficult, but they are not insubstantial, particularly against the background of the money that has already been devoted to the Bill.

We are not ruling out such extensions in the future, although noble Lords will recognise that I am not in a position to make commitments now—less so now that, as from today, I have moved from this brief to the Treasury. In any case, our concerns are not confined to issues of resources. As explained in Committee and on Report, these amendments raise a number of complex practical problems.

I remain concerned about the potential implications of Amendment No. 1 for the community transport sector, as I emphasised during our previous discussions. Introducing a full waiver of the fare for a large number of people would represent a significant shift for community transport in this country. We have had no assurances that the community transport sector could meet the extra demand generated from such a change, certainly in the short term. If we accepted Amendment No. 1, we would run the risk of disappointing many vulnerable people who might not be able to access the services that they would have the right to expect. Such a change would also place additional administrative burdens on the community transport sector, which is of course voluntary.

Not all community transport operators may actually want to be included in a mandatory scheme. We hear that some operators are concerned about the extra administrative, accounting and auditing requirements that would result from inclusion. That may discourage volunteers from donating their time to help to run these very valuable services. We also hear that some are worried by the potential loss of autonomy, the loss of the voluntary ethos and the potential push that that will give to commercialisation. It is only proper that all operators are given a full opportunity to comment on these proposals as they may have profound implications for the voluntary sector.

We would also need to think very carefully about the potential impact of such an extension on current rural bus services. Marginal routes would almost certainly be affected adversely if free travel were available on all community transport. The noble Lord, Lord Bradshaw, made that point in his contribution on Report. In the wider work that the department is carrying out on bus policy, following the Putting Passengers First document published in December last year, we have been and will continue to engage with those representing community transport interests. We very much value their input.

I understand from the noble Lord, Lord Low, that over the coming months stakeholder groups may be doing more work on the issues raised in his amendments concerning the definition of disability. As I have indicated to him, we would of course be interested to see that work. I hope that it will look at the practical and administrative issues that I have mentioned, such as definitions, the problem of the mitigation of fraud, and the fair assessment of those who are eligible. We know, for example, that there is sensitivity around the use of the words “carer”, “companion” or “personal assistant”. We will be happy to discuss those matters in more detail once the national bus concession has been in place for a year or so.

We have also noted the concerns, expressed eloquently by noble Lords on behalf of stakeholder groups, about the interpretation of the Secretary of State’s guidance to local authorities on eligibility of disabled people for concessionary travel. The department keeps that guidance under constant review. Indeed, we reissued it just over a year ago in November 2005. Shortly, we shall be meeting with the concessionary fares stakeholder group, which consists of about 20 different organisations representing the interests of older and disabled people. The guidance on the definition of disability is something we can discuss with them as part of the implementation of the national concession, as the noble Lord, Lord Low, was pressing me to do. We are particularly interested to understand whether there are genuine issues on ambiguity of interpretation of the current definitions. We are more than happy to discuss these matters in more detail with stakeholders and to discuss any work they may have undertaken, once the new national concession is up and running.

I am pleased that we have had the opportunity to discuss these important issues on the Floor of the House and in private discussions to which the noble Lord, Lord Low, has made an outstanding contribution. I thank noble Lords for their contributions. However, at this stage, I cannot accept the amendments, which although well intentioned are premature and I do not believe they represent the best way forward. I hope that noble Lords feel assured that we will keep the issues under close review; and we are prepared to meet interested parties on them. I hope that noble Lords will feel able not to press their amendments and that the noble Lord, Lord Hanningfield, feels able to withdraw Amendment No. 1.

My Lords, I thank the Minister for that response. I am still disappointed with it. Towards the end, he used the word “premature”, which I do not accept. As we are discussing this legislation, the new local government Bill is starting its passage through Parliament in the other place. The local area agreement, on which the Government are putting so much emphasis, means cross-cutting services and transport is already being subsumed. As leader of Essex County Council, I am worried about that. We are not going to spend any more; we just want better value for the £75 million. I am not suggesting more money to the Government, but better value from the £1 billion we will spend on concessionary transport. That means cross-cutting and looking across services. Although the Minister said “premature”, I would not be surprised if we were back here discussing how we get better concessionary travel through cross-cutting services, supporting various parts of the community with transport in various ways, in a year or so. It is not just one service. That is the Government’s own policy, looking across services and how we provide them, as well as local government working with the health authorities. That is where concessionary transport comes in.

The Minister talked of pressure being put on voluntary services, but the Government’s LAA agenda involves the voluntary sector in this. As leader of a county council, I am busy working with and supporting the voluntary sector, to ensure that it plays its full part in developing the Government’s policy. I wish the Government would be more joined up, as we are trying to be in local authorities. In supporting vulnerable people through travel, this legislation could well be out of date in two or three years.

My name is on the amendments of the noble Lord, Lord Low of Dalston, which I obviously support. I shall allow him to respond for himself in a moment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

2: After Clause 1, insert the following new clause-


Omit sections 2 to 5 of LSA 2000 (main duties and powers).”

The noble Lord said: My Lords, I join the noble Lord, Lord Hanningfield, in thanking the Minister for his characteristically full and helpful response. I, too, was a little disappointed at the timescale he signalled. His suggestion was that when the national concession had been in place for about a year, the stakeholders might take an initiative. Although I recognise that it will take some time to carry out a review of all the issues we have talked about and to meet the Minister’s points, I hope that it will be possible to start a little earlier. Perhaps it will be possible for the Minister and his department to take the initiative in calling the stakeholders together. I shall be happy to indicate to the Minister who the most prominent stakeholders might be; I have already mentioned a couple.

The Minister has his work cut out for him in piloting this Bill through Parliament and getting the national concession extension in place. I obviously do not expect the Minister and his department to take any initiative tomorrow, but would hope that before a year was out, maybe in the next six to nine months, he might be able to call the stakeholders together to indicate the matters that need to be addressed. I am sure that the stakeholders are working on it as we speak. Taking that action so that stakeholders and officials can get down to tackling the issues jointly, and we do not have to wait for the extension to be in place for a whole year before tackling the ancillary issues, will be an extremely helpful move. I beg to move.

My Lords, the amendment has obviously been moved. Perhaps the Minister could say a word, and then we could see if it could be withdrawn in line with the proposer’s wishes.

My Lords, I had hoped to anticipate any comment on Amendments Nos. 2 and 3 in my reply to Amendment No. 1, because the amendments were grouped together. I assure the noble Lord that I stand by what I said; my department would be eager to meet with the appropriate groups as policy evolves in this area. We already have a meeting scheduled, and we want to stay in contact. The Bill is the start, not the end, of policy. It is an important start, and there are significant costs attached. We recognise that groups of disabled people and their representatives will want to press us further in this area, and we will be happy to meet them once the Bill is under way.

My Lords, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 3 not moved.]

4: Clause 1, page 2, line 20, at end insert “, and

(c) that is compliant with the ITSO standard, as detailed under Crown copyright in 2004.”

The noble Lord said: My Lords, we have already debated the proposed national smart card scheme at length, and there is cross-party consensus that such a scheme is imperative. On Report, there was a dispute about whether the legislation should formalise the intention to implement the scheme using the ITSO standard to ensure uniformity across the country. The Minister assured me that the Government are committed to introducing a national smart card and have taken steps to achieve that goal. However, he was reluctant to amend the Bill to formalise that intention. As it stands, there is provision for the specification of the permit in regulations, which the Minister suggested could permit an ITSO-compliant smart card. However, the provision remains ambiguous: the ITSO standard is not robustly specified, so the Government would be able to change the specification if they wished. I accept that that is unlikely, but local authorities, which will be responsible for delivering the scheme, would welcome the clarity created by this amendment. This debate has featured heavily throughout the passage of the Bill, and I hope that the Minister will be willing to act on the reasoned and extensive argument he has heard regarding the amendment. I beg to move.

My Lords, I support the amendment. I would have added my name to it, but I was not here to do so. From the beginning of the Bill’s passage, we argued that the ITSO standard is important as a token to show that we are moving towards compatibility between smart cards. The last thing we want is companies introducing smart cards that are not compatible and having to bring them together. I hope the Minister can give us concrete reassurances that the Government are not going to allow a free-for-all to develop. We hope he will commit to ITSO-compliant smart cards.

My Lords, I have a slight feeling of déjà vu as we address ourselves to this amendment. It is difficult for me to see what further assurances I can give noble Lords about the Government’s firm commitment to smart ticketing in compliance with the ITSO standard. The amendment is clearly motivated by the laudable aim of ensuring the faster and wider spread of smart ticketing, which we discussed in some detail in Committee and on Report.

We are entirely supportive of that aim. Indeed, the department has already done a great deal to promote the use of smart ticketing. We are committed to the use of smart cards in the transport area and I reassure noble Lords that we are committed to the ITSO standard, which we see as vital to ensure the interoperability of smart cards across the country. However, I do not accept that it is appropriate to make amendments in the Bill in respect of this issue. Clause 1(5) provides for the specification of the permit in regulations, and those regulations could specify that the permit be an ITSO-compliant smart card. Under the Bill’s current provisions, the Secretary of State can ensure that permits issued by local authorities both outside and within London are in a form he stipulates. That can cover a unified appearance and ITSO compliance.

I cannot accept the amendment. We firmly believe that technical matters such as this have no place in the Bill. They are better suited to regulations, and that is where we intend fully to address them. Moreover, a number of technical and practical issues need to be fully considered before we can specify these necessary requirements in legislation.

Let us consider for a moment what would happen if, in a few years, the ITSO standard is renamed. We would have to amend primary legislation at that point. Surely, that is not what the noble Lord intends.

The Department for Transport has a task group—consisting of representatives from all tiers of local government and from bus operators—to advise on the practicalities of implementation and the specification of the pass. They meet fortnightly—indeed, they are meeting in two days’ time—and we value the expertise they contribute.

I hope that the noble Lord recognises therefore, and acknowledges, the efforts that the department and others put in to move forward swiftly on the form of the pass, which he regards as desirable, and so of course do we. It is imperative, however, that we have a workable scheme in place for April 2008, so that an eligible person can use their pass anywhere in England. Subject to this requirement, which must be the Government’s priority, I am happy to reiterate our goal of having ITSO-compatible smart ticketing spread as far, and as fast, as possible. With that in mind, I hope that the noble Lord will feel able to withdraw his amendment.

My Lords, I thank the Minister for that answer. There is no difference of policy between us; we all want to see this happen. We on these Benches just want to make certain it happens, and are trying to devise ways through the legislation to ensure that. I accept that ITSO might rename itself, and that it might be difficult to have a piece of legislation which specifies ITSO if its name is changed in a couple of years’ time.

I accept what the Minister says. We shall watch very carefully the regulations as they are published. We shall also carefully watch and question the development of the scheme over the next few months. We all want the end result out of this, and it is imperative that the Government push on with it. The Minister has given several assurances, which we wanted to hear again today. We shall follow this issue with some vigilance. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3 [Reimbursement of operators]:

5: Clause 3, page 3, line 32, at end insert—

“(4) Amend section 150 of the 2000 Act (procedure for reimbursement arrangements determined by authority) as follows.

(5) In subsection (4)—

(a) for “subsection (3)” substitute “subsection (3)(a)”; (b) for “28 days” substitute “56 days”. (6) After subsection (4) insert—

“(4A) An application under subsection (3)(b) shall be made by notice in writing given not later than 28 days after the date on which the arrangements, or the variations, come into operation.””

The noble Lord said: My Lords, this returns to a subject we discussed both in Grand Committee and on Report, where we drew attention to the fact that the appeal period after a scheme is implemented is too short for an operator to make a meaningful appeal on the basis of any information which he might have to hand. We have sought, through discussion—for which I thank the Minister—to draft an amendment. Amendments Nos. 5 and 9 provide the longer period of 56 days for that appeal to take place. I am sure that as a result there will be fewer appeals and less bureaucracy and I think that the bus industry will be very satisfied that this is a step in the right direction. I beg to move.

My Lords, I am grateful to the noble Lord, Lord Bradshaw, for his careful consideration of my comments and, indeed, objections, to his amendment at Report stage. I am very pleased that he has returned with an amendment with which I have a great deal more sympathy.

As the noble Lord explained, his new amendments focus purely on extending the deadline within which bus operators can appeal to the Secretary of State over the levels of reimbursement set by local authorities. This is currently 28 days; his amendment would extend it to 56 days in England in respect of appeals against reimbursement of the national concession under the Transport Act 2000 and in respect of appeals against reimbursement of concessionary schemes under the Transport Act 1985. As both sets of appeals are, in practice, often made jointly by operators, the noble Lord’s proposed changes to the 1985 Act would help to facilitate this practice. I undertook on Report to consider the issue further. We had a useful discussion last week and I am satisfied that we can look upon the noble Lord’s amendments a great deal more favourably.

I recognise that bus operators will welcome the additional period of time within which they will be able to lodge appeals. We hope that the extra time will offer scope for the full gathering of high-quality data so that any appeals which operators feel compelled to make are firmly grounded in empirical evidence. With a reduction in the possible incentive for lodging speculative appeals, it may even be that this change will result in a reduction. That can only be welcomed by local authorities. It will reduce some of the uncertainty that they might otherwise face.

Around a quarter of appeals made in this financial year were withdrawn or agreed locally in the weeks after submission. As I explained in Committee, choosing not to set a deadline for the submission of appeals was unacceptable. Fifty-six days is a reasonable proposition. Of course, even with this extension, we will still expect bus operators to start their consideration of reimbursement arrangements as soon as local authorities publish their concessionary travel schemes at least four months before the start of each financial year.

I am grateful to the noble Lord, Lord Bradshaw, for his constructive approach in taking on board my earlier concerns. I am glad that we have reached a consensus on the best way forward and I am happy to accept his amendment.

On Question, amendment agreed to.

6: After Clause 3, insert the following new Clause—

“Reimbursement of travel concession authorities

Where a travel concession authority has responsibility for the administration of the national concession including the reimbursement of operators as defined under section 3(2), the Secretary of State shall reimburse the authority the full costs of doing so, including capital and set-up costs.”

The noble Lord said: My Lords, we now come to a slightly difficult point. The Government have willed the end that elderly people and others will have concessions but they have not willed the means to the local authorities which have to pay the bus operators for the concessions that people enjoy.

I have been talking to bus operators and local authorities in the past few days. We are in a situation where some authorities have large concession bills and are struggling to pay for them, and other local authorities are getting too much money. It is probably the case that the Government have made sufficient money available, but the method of distribution through the rate support grant can cause difficulties for concession authorities receiving the money. I shall not wax lyrical, but the rate support grant is a crude method of dividing up the available resource between the local authorities concerned. This relates to many things, but the number of elderly persons using buses is probably not one of them.

In any case, it comes into conflict with the Government’s policy relating to the floors and ceilings which are applied to local authorities when the rate support grant settlement is made and when they set their council tax. We are aware that local authorities—the noble Lord, Lord Hanningfield, will speak for himself, I am sure—have a responsibility to pay for things but that other rules prevent them from receiving any money.

We are firmly in favour of the Bill. We believe in the travel concessions that have been granted. We are not quarrelling with the end; we are quarrelling with the means that the Government have chosen. It is essential before more money is pumped in at one end that the method of distribution at the other is faced up to. As the Bill progresses on its parliamentary course, the Government must take careful notice and table some amendments that will make it work. There is a real problem: a real problem for pensioners and a real problem for local authorities. It is the Government's responsibility to come forward with a proper mechanism to fund the scheme. I beg to move.

My Lords, my name is attached to the amendment. We have had a discussion about the financing of the Bill, which, as the noble Lord, Lord Bradshaw, said, we all support. The first time that we had that discussion, I got the same look that I usually get from Ministers when I refer to the fact that the Government say that they have put money in for something but that some people do not get it because of how the system works. With 15 counties and other authorities on the floor, one gets only a certain amount of grant whatever legislation is passed. That can go on for three years or so.

That is totally unfair, because if we want to implement legislation, it is not right if the Government announce it and announce supposedly new money for it but no one gets it. A mechanism must be found if the Bill is to work that gets the money that the Government say that they are giving to local authorities to implement the legislation. I think that my noble friend Lord Bruce-Lockhart may be commenting from the LGA perspective in a moment. I very much support the measure, but ways must be found to make certain that the money gets to where the spending is. That is the point of the amendment.

My Lords, as chairman of the Local Government Association, I seek clarification from the noble Lord, Lord Davies. We very much support the Bill and the concessionary fares scheme. We believe that it is beneficial and desirable. It was effectively administered by local authorities in the change from half to full fare in April 2006 and we look forward to the 2008 national scheme.

There is an issue of payment and the issue of principle. In introducing a free concessionary fare scheme, we assume—I feel sure—that the Government were not saying simply that it would be free as you get on the bus but you pay the extra through your council tax. However, in places such as Tewkesbury, a 9 per cent increase in council tax above the cap is being talked about because of the pressure of payment on concessionary fares. We are also seeing the pressure in places such as Newcastle.

The first point of principle was that adopted by the Deputy Prime Minister and the local government Minister in his Statement to the other place in November 2005, when he introduced the “new burdens” mechanism. That stated clearly that spending departments would pay the full cost of new legislation. First, can we have a recommitment from the Minister to that principle of what the Government called the new burdens policy? Secondly, we assume that that covers both the revenue cost and the capital start-up cost.

We then come to the point introduced by the noble Lord, Lord Bradshaw, and my noble friend Lord Hanningfield about distribution. That is not easy and we are not seeing consistency across the country. Because we cannot judge demand and do not know what the inflation costs of the bus fares will be—at the moment, they are rising at about 10 per cent a year—we believe that in the first instance, perhaps in the first two years, the best mechanism is simply a reimbursement scheme; the automatic repayment to local authorities on costs that are verified by their independent external auditors. That would be fair. After two years, when we understand the distribution and the demand across the country, we could change back to a block-grant scheme. Will the Minister confirm who will administer this? I think that the Bill still leaves room for this to be administered either nationally or regionally and locally because of the Government’s commitment to devolving. Will the Minister confirm that it will be administered locally?

Finally, some very effective working groups have been set up between the Local Government Association and the Department for Transport, and the Local Government Association has pressed for the mechanisms and the procedures to be known soon. We did ask early in 2007 whether we could know those so we could get on and plan for the new scheme, to which, as I say, we very much look forward.

My Lords, it is with delight that I return to this subject, not least with the noble Lord, Lord Bruce-Lockhart also present, as if reinforcements were necessary after our debates on the preceding stages of the Bill. I do not have the level of expertise in local government of all three noble Lords who have spoken in this debate, but start by reiterating what I said on Report. Of course I agree with the sentiment that local authorities should be adequately funded by central government for the reasonable and additional costs to them of administering this mandatory concession. It is government policy to ensure that the net additional costs of new burdens that they place on local authorities are fully funded. That is why, when the Budget announcement on the concessionary fares was made, the Chancellor was emphatic about the costs that were involved and predicted those costs for a number of years. He indicated that this was a proper burden on the national Exchequer.

The Government are providing up to an extra £250 million of funding per year for the improved concessions that the Bill introduces. This includes a contingency over and above what we currently estimate the actual financial impact of the new concession to be. This is in addition to the £350 million in 2006-07 and the £367.5 million in 2007-08 that we have provided to cover the extra costs of free local bus travel. I hear what the noble Lord, Lord Bruce-Lockhart, says about bus fare inflation, but I remain confident that the overall level of funding will be sufficient.

As I have said on a number of occasions, from April next year the Government will provide around £1 billion a year to fund concessionary travel. That will be recognised as an obligation that the Government have clearly undertaken. I think that many in local authorities agree that this funding is sufficient in aggregate. The issue is therefore not how much we have provided and whether we have provided enough, because we believe we have. The issue addressed by the amendment is distribution. We think that the cake is big enough. How do we slice it up to be fair?

I note that the amendment has dropped the previous call for the full costs to be funded through a direct annual grant. Noble Lords will recognise why I objected to that, and I appealed to their perspective on local authority finance when I thought that they should withdraw that proposal. Nevertheless, the amendment would require the adoption of a specific grant for funding the mandatory concession by default. There is no other way of implementing the amendment.

As I explained on Report, such an approach goes against government policy. We have been supported by local government in moving away from specific grants and in providing local authorities with freedom and flexibility in how they use their funding. If, as the amendment proposes, central government were forced to fund the full cost of schemes run by local authorities—and I emphasise to the noble Lord, Lord Bruce-Lockhart, that the local dimension is emphatically envisaged for this policy—whether those costs were reasonable or not, where would the local authorities’ incentive be to negotiate cost-effective schemes with operators and to manage overall costs effectively? They would be the negotiators. The Government would be the payer. The implications of offering a full indemnity for costs, which is what this amendment does, would be profound.

The existing arrangements contain checks and balances to ensure that public funds are spent wisely: an incentive for local authorities to reimburse cost-effectively by a fair amount and a right of appeal for any operator who believes he has been disadvantaged. This amendment would mean that claims will be made for all costs, whether or not they are reasonable or could have been mitigated. The Secretary of State might also be faced with claims for remote consequential costs such as those costs to an authority of defending operator appeals or the costs of poorly negotiated service contracts that are poor value for money. Noble Lords constantly emphasise their roles in regard to highly responsible local authorities. Therefore, they are surely not supporting an amendment which might lead to such recklessness and a lack of accountability?

The system we have now may not be perfect—I almost said “is not perfect” but that is too categoric—but it is fair to the taxpayer and operator alike. It is important that we get a good deal for the taxpayer. Giving an unconditional commitment to fund full costs, with no reference to such costs being reasonable, and with the removal of any incentive for efficient negotiation, does not provide that.

On Report, noble Lords pressed for reassurance that the Government recognise local authorities’ concerns with the funding distribution for the national concession and are doing something about it. Well, we are. I take on board the point that the noble Lord, Lord Bruce-Lockhart, made. I would not be able to speak so assertively from this Box if I did not know that effective action is being taken.

I reiterate that the Department for Transport, the Department for Communities and Local Government and Her Majesty’s Treasury are looking at options for distributing funding for provision of the statutory concession. It is in all our interests to try to ensure that this distribution matches as closely as possible where the costs actually fall. This includes proper consideration of those authorities that have not featured in the debate today but did in our earlier considerations. Those honeypot authorities referred to in Grand Committee and on Report are where special factors obtain.

The various options are also being discussed with the Department for Transport’s concessionary fares working group, which includes representatives from all tiers of local government—districts, counties, unitaries and PTEs—and operators. The group meets monthly and is making a valuable contribution to the department's work in considering implementation arrangements for the national concession. We welcome the expertise that its members bring to the table.

In addition, the Department for Communities and Local Government's settlement working group will shortly be starting discussions with local authorities on the grant settlement for the next three years. Consideration of funding the new concession will be taken forward within this proper forum. Statutory consultation will take place over the summer, not in one or two years' time. As noble Lords will see, we are consulting extremely widely on this issue on an ongoing basis and we understand its importance for local authorities. We are confident that the extra funding we have earmarked is sufficient to cover the total extra costs to local authorities. We are also sensitive to set-up costs, which were emphasised by the noble Lord, Lord Bruce-Lockhart, and the department is carefully considering this in dialogue with the concessionary fares working group.

Funding is of course important. We do not, however, believe that the best way forward is to address it in the Bill. Surely it is better to allow the department’s, and the Government’s, extensive consideration and consultation on funding to run its course properly rather than binding the Secretary of State’s hands in primary legislation. Time is of the essence in order to hit the 2008 deadline.

Finally, the drafting suggested would seem to include an obligation on the Secretary of State to refund local authorities in Wales for reimbursement provided to operators providing concessions in Wales. Since concessionary travel is a devolved issue, it would not be appropriate for us to legislate in this area. I am sure that the noble Lord, Lord Roberts, on the Liberal Democrat Benches will recognise the importance of this point. This may not have been the intention of his colleagues, but it makes the amendment unworkable and therefore even more unacceptable.

We of course recognise the concerns that noble Lords have raised on numerous occasions with regard to the Bill. Equally, I would hope that they recognise that we are doing the necessary work to address their concerns. With this in mind, and with the noble Lord having recognised the generosity with which I responded to his previous amendment, I hope that he will show similar generosity and withdraw his amendment.

My Lords, we have heard from the Minister. No local authority is seeking an indemnity against other costs which arise. We seek simply to pay the bus fares of concessionary fare passengers in the future. There are ways out of that. A national fare could be set, as the National Assembly for Wales has done. Each local authority issues the bus passes, but they issue against a national fare. We have put down this amendment because the Government have not come forward with satisfactory funding arrangements. I have sat upstairs in the Public Bill Office trying to find ways to amend this legislation. We have used our best endeavours and have put down something which tells the Government that this is unfinished work. As I said previously, the Government have legislated for the ends without legislating properly for the means of delivery.

In the circumstances, I believe that the amendment should be in the Bill so that when it goes to another place it will remain a thorn in the Government’s side and will constantly remind them that they have not properly finished the business. Therefore, the amendment should stand, so that the Commons has time for other thoughts. I am sure that the concessionary fares working group is working hard and that discussions are going on with the Treasury. We want action, which is why I wish to test the opinion of the House.

Clause 4 [The national concession: journeys beginning on London bus network]:

[Amendment No. 7 not moved.]

Clause 7 [Requirements as to uniformity]:

[Amendment No. 8 not moved.]

Schedule 2 [Minor and consequential amendments]:

[Amendment No. 9 not moved.]

An amendment (privilege) made.

My Lords, I beg to move that this Bill do now pass. I thank the 153 Members who voted against the amendment in the Division.

Moved accordingly, and, on Question, Bill passed, and sent to the Commons.