Buses

Statement

The Secretary of State for Transport (Lord Adonis)
My right honourable friend the Minister of State for Transport (Sadiq Khan) has made the following Ministerial Statement.

I am today issuing a consultation paper on the distribution of concessionary travel special grant funding for local authorities in 2010-11.

Following the extension of the statutory bus concession in April 2008 to provide free off-peak local bus travel anywhere in England, the Government have provided additional special grant funding to local authorities of £212 million in 2008-09, followed by £217 million for 2009-10 and £223 million for 2010-11. This is in addition to the funding that Government provide each year for concessionary travel through the formula grant process, bringing total spending on concessionary travel to around £1 billion a year.

A special grant report, which specified the amounts to be paid to authorities for the three years from 2008-09 to 2010-11, was approved by Parliament in March 2008. The formula used to distribute the extra funding was based on data on eligible local population, visitor numbers, retail floor space and current bus use. As such it was designed to take account of likely demand in areas such as coastal towns, urban centres and other places likely to experience an increase in costs.

There is no evidence that the additional special grant funding is insufficient in total to meet the costs of the new concession. However, I am aware of some distributional issues that have arisen that have led to around 30 (out of over 260) travel concession authorities at risk of a significant shortfall in funding. At the same time, I am aware of other authorities that may have received more funding than they require to meet the additional costs of the improved concession.

It is for this reason that I am today launching a consultation on whether to allocate the special grant for 2010-11 using a revised distribution, which seeks better to match the pattern of costs being incurred by local authorities. Any revised grant distribution developed after the consultation will be published in the form of a special grant report which will itself then be the subject of parliamentary scrutiny in due course.

Earlier this year we also consulted on the way in which concessionary travel will be administered from 2011. Over 200 responses were received to the consultation and we are in the process of considering these responses. I expect to be able to make a further announcement on the outcome of this consultation in due course.

I would like to emphasise that the funding distribution and administrative issues should by no means detract from the success of the national bus concession, which the Government will continue to offer to older and disabled people in England. These changes make no change to either the services pass holders are entitled to use, or to who can receive the concession. Concessionaires themselves should therefore not notice any difference in the service they receive, under the proposals suggested.

The introduction of free off-peak local bus travel throughout England from 1 April 2008 has given the opportunity for greater freedom and independence to around 11 million older and disabled people. No older or disabled person in England now need be prevented from local bus travel by cost alone and the scheme represents a major step forward in tackling social inclusion for some of the most vulnerable people in our society.

Copies of the consultation paper have been placed in the Library of the House.