Concessionary Bus Travel Bill [Lords]

I am grateful for the hon. Gentleman’s encouragement. For the benefit of hon. Members who did not participate in Committee, I should say that it is true that there is no mention of the funding for concessionary travel in the Bill, but I can assure the House that that is for very good reasons. As we know, circumstances change and flexibility needs to be built into the legislation to enable future improvements to concessionary travel to be made as efficiently and effectively as possible. It would not be appropriate or wise to lock ourselves into a particular approach now, as the important issue of funding is currently being considered and discussed across Government and beyond. The existing arrangements contain appropriate checks and balances to ensure that public funds are spent wisely, which is something with which we would all concur; an incentive for local authorities to reimburse cost-effectively by a fair amount; and the right of appeal for any operator who believes they have been disadvantaged. Importantly, the system is fair to the taxpayer and the operator alike. The extra funding that the Government have announced for the new concession already includes a generous allowance, both for uncertainty over future travel patterns and the difficulties of allocating money on a formula basis. The sum of up to £250 million extra per year is based on a number of key assumptions. Hon. Members may be interested to know that those include an extra 100 million journeys generated and a pass take-up rate of 85 per cent. Once distributed, it will result in double-digit percentage increases for most travel concession authorities against budgets that already include discretionary spend. The extra costs will not be as much as many people may think, because many of the new trips will be generated travel, which will not require full reimbursement. I hope that that gives some indication about the sums involved. The House should be concerned about the full amount, as well as the distribution, which I am on record as saying is extremely important. The assumptions are generous. As I said, we have allowed for a pass take-up rate of 85 per cent. In some areas of England, pass take-up is below 40 per cent. at present, so we are confident that the extra funding is sufficient to cover the total extra costs to local authorities. It is important to recognise that the freedom and flexibilities provided by unhypothecated formula grant, which was discussed earlier, are generally supported by local authorities. They have long argued against having their hands tied by hypothecated funding streams. Concessionary fares reimbursement is only one of the many obligations that authorities must meet from their council tax receipts and from the funding provided by central Government through the formula grant process. The Local Government Association strongly supports a specific grant for the extra funding for the national bus concession, at least on a temporary basis. However, we need to be clear that such a move would be a break from the policy of greater freedom and flexibilities in funding which is generally welcomed by the local government community. It would also be inconsistent with the basis for allocating existing funding, and we would need good reasons for making such a change. However, the Department for Transport, the Department for Communities and Local Government and the Treasury are looking carefully at the merits of different funding mechanisms for statutory concessions.