Tim attacks Government for £900,000 shortfall in local public transport funding
The following is a speech Tim gave in the Commons during a Public Transport debate on 7 July 2008.
I had not intended to speak in this debate, but I have been goaded -- not least by the lack of mention of my constituents, particularly those in Worthing. I thought it might enlighten the House if I discussed the experiences of my local councils and my constituency. I repeat the welcome given to the hon. Member for Liverpool, Riverside (Mrs. Ellman) and commend her Committee's report, although it was produced under the chairmanship of the late former hon. Member for Crewe and Nantwich.
I take issue slightly with my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski), who tried to claim that his constituency had the highest number of pensioners. Although not now No. 1 in the pensioner stakes, Worthing still has, proportionately, the highest number of over-85-year-olds, who form 4.6 per cent. of the population. We greatly appreciate the contribution that they make to our town. They seem to travel on buses disproportionately more than other members of the community, so our getting this issue right is of particular relevance to them.
Although I greatly welcome the scheme and supported the Concessionary Bus Travel Bill that brought it in, there are clearly winners and losers. The Government have increased the funding to £1 billion. I am not trying to detract from the generous funding that they have made available, but whatever one thinks about the funding, the issue is whether it is going to the places it is needed most and whether it reflects the usage of buses by local populations. I have a problem in that regard.
Worthing borough council and Adur district council, the two local authorities in my constituency, have been working in ever closer partnership. That has been greatly encouraged by the Government and it is to be applauded; it has produced many efficiency savings. However, those savings and more have gone out of the window because of the necessity of subsidising a scheme that the former Transport Minister, the hon. Member for Lincoln (Gillian Merron), made absolutely clear on 28 June 2007 would be fully funded. Overall, that may be so -- it is too early to tell -- but in Adur and Worthing it is anything but fully funded.
The Minister knows that full well because, in her absence over Christmas, I took a delegation to see the Minister for Local Government, the hon. Member for Wentworth (John Healey), and I had a follow-up meeting with her later. She has had a number of detailed representations from council leaders, council officers and the two Members of Parliament representing the Adur and Worthing authorities. She is in no doubt about the problems that the scheme is causing us.
I will cite the figures: the estimate is that there will be a shortfall of between £600,000 and £650,000, possibly in Worthing alone. In Adur district next door, the shortfall for this year has been estimated at £238,000, which is equivalent to 4.3 per cent. on the council tax. The council leader has estimated that if we did not have to subsidise this supposedly fully funded Government scheme, we virtually need not have increased council tax this year at all. All the other savings that have been made have been wiped out by the additional costs of the scheme, which have fallen on Adur council tax payers; the scheme has not been fully funded as the Government had claimed.
There are winners and losers among the 324 authorities that are operating the scheme. There are particular losers among authorities that include resorts, particularly seaside resorts, that rightly attract people on day trips or short-stay holidays. That is why Sussex, which has a number of seaside resorts, has been disproportionately hit. I repeat that the scheme is good, but it has already become subject to the law of unintended consequences, and that is having a detrimental financial effect on my councils and therefore my council tax payers. Sarah Gobey, the assistant director of financial services at Worthing council, has provided me with a brief. She writes that Worthing borough council
"is extremely disappointed to see that the Department for Transport is only willing to consult on proposals to distribute the grant on a formula basis. At this early stage in the scheme it is almost impossible to derive a formula which will match the pattern of actual costs -- the empirical information is simply not there."
I should remind the House that the Government adopted a reimbursement formula based on a combination of eligible population, bus passenger journeys, overnight visitors and retail floor space -- a very difficult calculation to make.
Sarah Gobey went on:
"This Council would prefer to see the grant paid to reimburse the actual additional costs experienced at a local level. This would ensure that there are no 'gainers' or 'losers' in the new system. The preliminary forecast received from the Council's consultants would indicate that whilst Worthing will be a 'loser' under the proposed arrangements, other Councils within West Sussex would appear to 'gain'. We fail to see how this can be justified, yet the Department for Transport refuses to see why using a formula to distribute the funding is flawed. The Government has told local government that there is sufficient funding available for the new scheme, consequently there is absolutely no rationale in allocating grant on any other basis than actual expenditure."
The situation, however, is actually worse than that.
For the past few years, again to their credit, the Government have been operating a free local bus pass scheme, but its operation and funding have been to the detriment of my councils. The note continues:
"However, all of this masks another problem which is that the Council believes that the current statutory scheme is also underfunded. By 2008-09, the Council estimates that the cost of the current scheme will have increased by £860,000 since the introduction of the free bus pass. In 2006-07, the Council received additional funding of £610,000 via Revenue Support Grant. As a 'floor' Authority, this funding has barely kept pace with inflation, whilst over the same period the Council has seen costs increase by over 20 per cent. per year. Consequently, the Council estimates that the current scheme is underfunded by at least £200,000."
On top of the additional underfunding element of the national bus pass scheme, we have been accumulating losses on the existing local scheme. So there has been an accumulation of losses over some years, to which the national bus scheme is a further addition. It is a double whammy. As Sarah Gobey concludes:
"There is the distinct possibility of financial meltdown for Worthing Borough Council for the sake of a formula and it is particularly galling to think that all of our hard work on achieving savings from partnership working" --
with Adur --
"could be wiped out at a stroke."
That briefing came from Worthing, but the same principles apply to Adur council next door, which is a slightly smaller one whose total figures are slightly lower.
The Government announced this scheme to great acclaim and we all support it and want to see it flourish because it is good for transport, good for the environment and, most of all, good for elderly and disabled people who can travel more, but it is clearly having a very detrimental effect as certain councils, particularly mine, are suffering from a large shortfall.
That explains why certain councils, including mine, have chosen to time their scheme so that it starts at 9.30 am rather than at 9 o'clock, as 9.30 is the latest allowable time for authorities to commence the scheme. Some neighbouring councils, which are not suffering from the same shortfall, have been able to start their scheme from 9 o'clock, so further confusion is ensuing. My local councils are, quite understandably, trying to limit the impact that the shortfall in funding is having by just about the only mechanism available, which is to start the scheme at 9.30 rather than earlier.
Now, however, we have people travelling between local authorities whose start time is different, which is causing a good deal of confusion and no little resentment by some people who think that certain councils are pulling a fast one. Well, if anyone is pulling a fast one, it is the person who invented this funding formula, which is leading to serious underfunding for my councils, which are then quite unreasonably getting the flak for what is happening.
As my hon. Friend the Member for Scarborough and Whitby (Mr. Goodwill) said, the scheme has also been a victim of its own success, as there has been a big increase in the number of bus journeys. On the face of it, that is absolutely right, and I see many people around Worthing getting on buses, so the buses are being well used. I have to say, however, that many of the people who get on those buses do not get off them -- [Interruption.] The Minister might say "Not ever", but there have been a number of cases involving people who, knowing that they can travel for free, get on the bus and travel all the way down the coast to Chichester or Lewes or perhaps on to Hastings or wherever without getting off. They go for the trip. That is terribly nice and lovely, but they do it again the following day and the one after that and the one after that. Bus drivers now have regular customers who travel on the bus for the sake of it. That may not be typical, but some people are making use of the system, travelling up and down the coast and having a lovely ride. To be honest, that is not the purpose for which the scheme was intended.
I have another extraordinary situation in my constituency. There is a residential building of about 90 sheltered flats where a number of pensioners live. It is very well run by the local housing association. It is on a busy road just on the outskirts of Worthing. The bus going into town picks up pensioners from that building so that they can do whatever they want to do in Worthing. When they come back, however, the bus stop is on the other side of the road, but the road is so busy that many of these pensioners are too scared to cross it, so they stay on the bus, travel several more miles into the next town until the bus turns around and comes all the way back in order to deposit them on the right side of the road. That seems absurd, but it is happening. It provides another example of excessive bus journeys, which have to be accounted for by the local bus company. I am trying to address the problem by getting the local authority to put a pedestrian crossing of some description on that part of the road, which should help. [Interruption.] The serious point I am making is that many more people than were ever anticipated are using the buses; and I have to say that it seems to be happening to a greater extent in Worthing and Adur than in other parts of the country, which exacerbates the problem of the number of journeys and the underfunding.
Notes
Under the Concessionary Bus Travel Act, pensioners and disabled people in England are entitled to free off-peak bus travel on local bus services anywhere in the country. From April the scheme has provided free travel from 9.30am to 11pm Monday to Saturday, and all day on Sundays and Bank Holidays.
The Government has set out a statutory minimum that local authorities can offer those eligible for a free pass and local authorities can offer additional benefits for their residents. A number of Local Authorities currently do have schemes in place that offer their residents additional benefits such as concessionary travel before 9.30am or offering companion concessions to those accompanying the disabled or elderly passenger.
The Government is supposed to reimburse councils for offering the statutory minimum, but anything that is offered over and above this can be funded by the local authority. The problem is that, following the widening of the scheme to nationwide bus travel from April 2008, many local authorities are concerned that they will face severe shortfalls as a result of the Government's flawed reimbursement scheme. This has meant that some councils will be forced to make cuts to other council services, raise council tax, or cut bus fare concessions that were offered above the statutory minimum.
This will mean difficulties for the thousands of people who rely on services and might need to travel before 9.30am. These cuts to vital services are a direct result of poor financial planning by the Government. The incompetent way in which the Government is putting the scheme into practice is undermining local efforts to improve bus services with partnerships working between bus operators and local authorities.
When the Bill to implement the national scheme was passing through Parliament, Conservatives highlighted the problems that local authorities would face if the scheme was inadequately funded and sought guarantees from the Government on this point. It now appears that our fears are being realised and I am sure that my colleagues in the Shadow Transport team will be continuing the pressure the Government on this important issue.
