Concessionary Travel

Karen Lumley Excerpts

Wednesday 24th November 2010 Westminster Hall

[Karen Lumley (Redditch) (Con)]

It is a pleasure, Mr Weir, to serve under your chairmanship. I thank all hon. Members for giving up their time to attend this debate, which is about an important subject. Concessionary fares come with a history of controversy, and I have received many representations on the topic from my constituents. I hope that we get some clarification from my hon. Friend the Minister today.

Concessionary travel is vital to many communities, especially to the elderly, the disabled and those who live in rural areas, who would otherwise be cut off from basic services. Eleven million people in England qualify for the concession, which is no small number. Since the introduction of the scheme in Worcestershire in 2008, we have seen an 18% increase in the number of concessionary journeys made in the area, and the county has issued more than 100,000 cards.

The preservation of concessionary travel is a huge deal. For me, it is especially important to Worcestershire and my constituency of Redditch. When I was a Redditch councillor in 2004, the Conservative minority-control council scrapped the free bus pass on advice from council officers, who told us that it could not be sustained, but we soon realised what a gigantic mistake it had been. At the following local elections, Labour election literature branded me the “bus pass snatcher”. Needless to say, we lost the election, and I am certain that the issue was a significant factor in my losing Redditch in the 2005 general election. The Labour group reinstated concessionary fares in 2004, but the disaster that I have mentioned must not be repeated.

[Mr Robin Walker (Worcester) (Con)]

I congratulate my hon. Friend on securing this debate. She makes a strong point. Does she acknowledge that the problems of the present concessionary fares scheme affect county towns such as Worcester particularly badly, and that if the Government are going to switch it from the districts to the counties, it is essential that they reallocate the grant and not simply the cost of the scheme?

[Karen Lumley]

I totally agree with my hon. Friend. I shall probably come to that point later.

I fully support the announcement in the Government’s comprehensive spending review to

“Protect the statutory entitlement for concessionary bus travel, ensuring that older people can maintain greater freedom and independence.”

However, I am worried that it does not go far enough. I believe that the Government are not effectively addressing the serious concerns voiced by district and county councillors about the reduction to local government resource grants of 28%, the transfer of grant funding administration and the 20% cuts to the bus service operators grant. Together, those will have a significant effect on the provision of concessionary travel.

Today, I wish to speak particularly about the implications that the transfer of grant funding from district councils to the county council, mentioned by my hon. Friend the Member for Worcester (Mr Walker), will have for two-tier authorities. I stress that the problem is not the principle of transferring the funding to county councils, but the process of reallocating financial responsibility. Under current plans, the national scheme, which is administered locally, is to be withdrawn from district councils and transferred to county councils from April next year. In the past, councils have often had to deal with substantial shortfalls in funding for the scheme, and the latest development appears to be a continuation of this struggle.

[Harriett Baldwin (West Worcestershire) (Con)]

I congratulate my hon. Friend and Worcestershire colleague on securing this important debate. Does she agree that it would be desirable for councils, whether at district or county level, to be net-net—not out of pocket either way—when implementing the scheme on behalf of the Government?

[Karen Lumley]

That is the point that I am making. The proposal could be devastating for district councils, as they stand to lose significantly more than they spend. The system has been described as a mess by the District Councils Network. Changes to the formula need to be clear, transparent and accurately carried out, but many councils are concerned that the implications have not been properly thought through.

[Mark Garnier (Wyre Forest) (Con)]

I congratulate my hon. Friend on securing this incredibly important debate. To give substance to her argument, I should say that the leader of Wyre Forest district council told me only this afternoon that the potential cost to that one council would be £1 million if the worst option is selected. That is £1 million a year on top of the expected cuts resulting from the comprehensive spending review.

[Karen Lumley]

I thank my hon. Friend for that. I know that Redditch is looking at similar figures.

It is most likely that the transfer will result in neither a fair nor a transparent funding deal, some councils being hit harder than others through losing a disproportionate amount of grant funding.

[Simon Kirby (Brighton, Kemptown) (Con)]

On that point, Brighton and Hove city council is looking at a shortfall of £1.3 million. I suggest that a grant should be provided to cover the fact that some places are tourist destinations and have extensive bus networks as a result.

[Karen Lumley]

We in rural Worcestershire suffer from different problems, but I take that point on board.

The system is surely not in line with the Government’s message on fairness. I wholeheartedly support that message, but on this matter it is failing to get through. We need to ensure that funding is allocated fairly and equitably.

[Heather Wheeler (South Derbyshire) (Con)]

My hon. Friend makes a good point. The changes affect different parts of the country differently. In South Derbyshire, we are trying to negotiate friendly terms with Derbyshire county council. However, in the past Chesterfield and Derby city lost huge sums as a result of various changes.

I understand that consultation with the Government is going well. There are four options. In two we lose dreadfully, and in one we are just about okay. As for the option for the rural and tourism areas, I sincerely hope that our ally will come along with some good news later this afternoon.

[Karen Lumley]

Like my hon. Friend, I hope that we get some good news this afternoon. That is why we are here.

I seek clarification from the Minister. Will he assure the House that district councils will not be significantly financially disadvantaged as a consequence of the transfer of the administration of concessionary fares from district to county council level? If some councils are to be disproportionately affected, may I suggest a top-up fund to ensure that those councils likely to face substantial losses will not be financially disadvantaged?

In the light of the tremendous upheaval that the transfer will cause, the time scale allowed for councils is less than satisfactory, given that local authorities already have to deal with the comprehensive spending review. Will the Minister consider making representations to his Department to change the date required for publication of the scheme from 1 December? As we know, the spending allocation will not be published until later, which will leave local councils second-guessing how much will be needed.

[Justin Tomlinson (North Swindon) (Con)]

I congratulate my hon. Friend on securing this excellent debate. I feel like the odd one out, given that I represent a unitary local authority. Does she agree about the need for clarity, especially in the long term, so that local authorities can plan accordingly?

[Karen Lumley]

Wouldn’t that be nice! When I was a councillor, we worked year to year; we never got any further ahead than that. I totally agree with my hon. Friend. That would be fantastic.

I hope that the Minister agrees that clarity would allow districts fully to assess the impact of funding adjustments, and thus be able to make more informed decisions on the possibility of continuing local enhancements to the national scheme. For example, the Redditch scheme runs for the whole day, so whenever the buses start—it is usually 7 am—residents are able to use them. However, the national scheme starts at 9.30 am, and our residents lose out by not being able to travel during busy commuter times.

I shall speak briefly about the bus service operators grant. There was much speculation before the comprehensive spending review about Government plans to cut the BSOG entirely, but it proved to be unfounded. Instead, the grant will be reduced by 20% from 2012. I welcome the Government’s view that that reduction will have a marginal impact that can be absorbed without fares needing to rise. However, many do not believe that. The impact of individual cuts could be absorbed, but when combined with cuts to the revenue grant and changes in the funding system, they will have a potentially devastating effect. Will the Minister say exactly how these cuts can be absorbed, and what practical measures are in place to ensure that concessionary fares will not cause increases?

Many authorities are approaching the comprehensive spending review outcomes positively—I know that Redditch is—and they hope to be in a position to meet the loss in grant without a disproportionate impact on service delivery. However, some councils will not be so lucky. As we heard from my hon. Friend the Member for Wyre Forest (Mark Garnier), many will have to raise fares, reduce service availability, alter or cancel routes altogether and consider the impact on longer-distance rural bus services, all of which will significantly undermine the concessionary scheme. I have to ask what the point is of having a bus pass if there are no buses to use.

We understand that cuts in all services are a necessary evil, given the economic catastrophe left by the last Labour Government. However, the lack of clarity about the transfer of funding and about where the brunt of the cuts will fall is unacceptable.

[Rosie Cooper (West Lancashire) (Lab)]

I congratulate the hon. Lady on securing this debate. We have heard about councils that are net losers today. My local authority of West Lancashire is a net gainer and must contribute to the county these days.

Does the hon. Lady agree that concessionary travel is a lifeline for many pensioners? As for rural areas, she is absolutely right—there is no point in having a bus pass if there are no buses. Would she seek to ensure that all pensioners and all communities have fair and equitable access to concessionary travel, especially because, as I say, West Lancashire is a gainer?

In my area, my local pensioners want to have the option of concessionary rail travel on the same basis as their neighbours in Southport, Wigan and Liverpool. The pensioners of West Lancashire actually feel that they are not getting a fair deal out of concessionary travel and yet it is a net gainer, so there really are swings and roundabouts here.

[Karen Lumley]

I agree. There are obviously swings and roundabouts across the whole country and it would be nice if we had a uniform scheme whereby everybody could benefit; it would also be nice if we had the money to do that. However, I understand that we are in very difficult times and we have to make very difficult choices.

[Gavin Williamson (South Staffordshire) (Con)]

I congratulate my hon. Friend on securing this debate and I thank her very much for giving way. On that point, some of the current schemes that have been discussed are incredibly penal against rural district councils and we could actually see many services just being totally destroyed, such as those in my district council of South Staffordshire. We must have consideration for those authorities in the future, a point that she has been explaining fantastically well in this debate.

[Karen Lumley]

I thank my hon. Friend for that intervention.

Part of my constituency is rural and part of it is urban, so the problems facing those two parts are very different. That is one of the reasons why I wanted to speak today, because it is probably easier to get a bus in Redditch than it is to get one in Wychavon, which is the rural part of my constituency. So, as the hon. Member for West Lancashire (Rosie Cooper) said, it is only right that we treat people as fairly as we possibly can.

[Andrew Bridgen (North West Leicestershire) (Con)]

My constituency is very similar to that of my hon. Friend; it has both urban and rural areas. My district council has currently budgeted to spend £887,000 on the concessionary fare scheme this year, and it will receive a specific grant of £196,000 to meet part of that cost. However, my county council is concerned that, when this spending on concessionary travel passes to county councils, the formula grant will be reduced by more than that £691,000 shortfall—many other Members have expressed similar concerns about shortfalls today—and that that would put added pressure on a budget that has already been cut by 25%. If we want to avoid rural isolation, we must have a guarantee that we will not have a shortfall.

[Karen Lumley]

I agree with my hon. Friend and I look forward to hearing the Minister’s reply to the debate in a few moments’ time.

The Government have promised to examine smarter ways of administering the bus service operators grant subsidies, as well as a system that more clearly—

[Andrew Jones (Harrogate and Knaresborough) (Con)]

I congratulate my hon. Friend on securing this debate and I thank her for giving way.

In the area that I represent—Harrogate and Knaresborough—the actual cost to Harrogate district council of concessionary fares in 2009-10 was £2.9 million and yet the total special and formula grant received was only £1.5 million, leaving the balance of £1.4 million to be met by local taxpayers.

As the grant is reallocated, with responsibility for the service transferring to the county council, it is quite important that we allocate the grant and not the cost that county councils and district councils have been facing, so that the local taxpayers of Harrogate district council are not hit twice.

[Karen Lumley]

I totally agree with my hon. Friend and let us hope that we can move on to the type of system that he has just suggested.

We need to look at a system that allows local communities and local authorities to determine how the funding that is allocated to their area should be spent, but I do not think that we have seen any evidence of such a system yet. I ask the Minister today to reconsider the proposed changes in the light of the cumulative effects that they will have, not only on district councils and local authorities but on the provision of vital services for our elderly and disabled people. I also ask him to address these issues as a matter of urgency.