Concessionary Bus Travel Bill [HL]

moved Amendment No. 8: 8: After Clause 3 , insert the following new Clause— ““Reimbursement of travel concession authorities After section 149 of the 2000 Act insert— ““149A Reimbursement of travel concession authorities (1) Where a travel concession authority has responsibility for the administration of mandatory travel concessions under section 145A, including the administration and issuing of permits under section 145A(4) and the reimbursement of operators under section 149, the Secretary of State shall reimburse the authority the full costs of administering mandatory travel concessions by means of a direct annual revenue grant. (2) The Secretary of State shall reserve an agreed proportion of the funding allocated to the mandatory travel concession scheme to provide a contingency fund. (3) A contingency fund under subsection (2) shall be used to reimburse any travel concession authority for all unforeseen capital and set up costs incurred by that authority in introducing a scheme to comply with this section.”””” The noble Baroness said: My Lords, in this amendment, I return to the question of costs. I know that we spent a certain amount of time on this in Grand Committee. I hope that the intervening period has given the noble Lord a chance to consider some of the points raised. The first question at issue was whether the government have allowed enough money in total to fund the concessionary fares scheme. I accept that it is notoriously difficult to make precise estimates of how much a scheme like this will cost. We have evidence from the introduction of the scheme in Scotland and Wales and also when the full fare scheme was brought in locally. We know that the tendency always was to underestimate the costs. That is not intended as a criticism of anyone, but we need to take into account that all the evidence is that the take-up of concessionary passes has always exceeded expectations. The use of the fares and the use of the buses have always exceeded the estimates, and operators costs were always higher than planned. Therefore, it seems important that we have more of an understanding of how the Government will keep these costs under review so that local authorities receive the right amount of money for the scheme. The second set of problems is rather more intractable. I hope that the noble Lord has had some time to think about them because the difficulties faced by individual councils can be quite profound. That is fundamentally because of the Government’s decision to link the funding of the concessionary fares scheme with the overall local government financial settlement. Funding is related to all sorts of strange demographic equations and the complexities of local government finance but is not linked to how many people are actually using the buses. That will cause difficulties for certain councils. Some authorities will receive much less money than they need. That may be because their eligible population is higher than the average that has been allowed for, or it may be because they have more bus-friendly policies, which have created a higher than average demand. We discussed the issue of honeypot authorities. I referred to Blackpool, but the noble Lord was rather damning in his assessment of Blackpool as a honeypot. Nevertheless, pensioners will want to visit areas such as Blackpool and to use these cards. Therefore, that local authority, which is not particularly well-off, will have to meet higher costs. In that sense, certain local authorities are going to have difficulties. However, the most intractable problem is the way in which the rollercoaster of local government finance has left some councils with, in effect, a cap on how much money they can receive from central government in grant in any form at all. We heard from the noble Lord, Lord Hanningfield, who I am sure will intervene on this, that government departments can tell us as much as they like how much money they are putting into Essex but Essex is in effect capped in terms of how much it can get from central government. The danger in this scheme is that, although there might be a theoretical amount of money coming in, it will not amount to anything in practice. The real problem for local authorities is that, if there is a shortfall in this scheme, where will they get the money? Most of them will not want to put up the council tax to meet these costs and some will not be able to because they will be capped. They can have a look at other areas of spending, but they cannot touch education because that is ring-fenced and the social care budget is under huge pressure. What is likely to happen is that, if there is a shortfall in this scheme, local authorities will go back to their transport revenue budget and make their savings there. The biggest single item of spending in those budgets is buses. Therefore, the chances are that we will see a reduction in bus services. Consequently, pensioners will have free fares on buses that do not exist. That is what happened in Tyne and Wear last year, and we do not want to see that situation replicated across the country. When we discussed this in Grand Committee, the Minister said that he could not provide a blueprintfor dealing with this issue. I am sure that that is right and that the House would not expect a detailed, blow-by-blow discussion of exactly how this will be done. However, I think that the House and local government need a bit more assurance that the Government have understood how difficult this is going to be for local authorities and have ensured that mechanisms are in place to deal with this. It struck me on re-reading the Second Reading debate that a similar question arose about how these concessionary fares are to be refunded along the borders with Wales and Scotland. That was another area on which the Minister said, ““Well, it will all happen in the fullness of time””. We do not expect everything to be worked out in finite detail, but neither can we accept the ““Trust me, I’m a politician”” reply that everything will all right if we only have faith. I do hope that the Minister will take the opportunity simply to put a little more flesh on the bones and say how these difficult issues will be resolved. Local authorities are currently putting their budgets together for next year, and several of them have been in touch with me to say that this area is causing them some difficulty. The authorities that will be the beneficiaries tend to keep quiet; that is in the nature of these things. We hear from the authorities that are in trouble. I beg to move.