Agenda Item No
Resources Board
10 September 2007
Report of the Assistant Director (Revenues and Benefits) / Concessionary Travel Scheme 2008/091Summary
1.1This report outlines the proposals for the 2008/09 Concessionary Travel Scheme.
2Recommendations to the to the Board
aThat the contents of the report be noted;
bThat the current Countywide scheme enhancement of a 9.00 am start be continued into the new 2008 scheme; and
cThat the future issue of companion passes be considered as a local enhancement to the scheme;
dThat the issue of travel tokens be discontinued for 2008/09 and onwards.
eThat a further reportbe brought before theBoard to consider further community transport options if any group is disadvantaged by changes to the current scheme
3Background
3.1Under the Transport Act 2000, Local Authorities in England and Wales were required to arrange for elderly and disabled people living in their area to receive a half-fare concession on local bus services, subject to the person obtaining a bus permit, which had to be issued free of charge.
3.2The Act also linked the entitlement of elderly people to travel concessions to pensionable age, as defined in the Pensions Act 1995(that is 60 for women and 65 for men). The 2002 Act equalised the age at which men and women became entitled to travel concessions, at the age of women, from April 2003. Schedule 4 to the Pensions Act 1995provides for pensionable age to be equalised at 65 for both men and women by 2020, with transitional arrangements from 2010. The age for entitlement will thus increase for both sexes between 2010 and 2020 with the phased increase in women's state pension age.
3.3All Local Authorities (not just Travel Concession Authorities) also have discretion, under the 1985 Transport Act, to offer further concessions on bus and other public passenger transport services if they so wish.
3.4The Chancellor announced on 16 March 2005 that free off peak local area bus travel would be introduced in England from April 2006 for those over 60 and the disabled. An additional £350m was allocated and distributed through the (RSG) formula grant settlement. [Subsequent statements from Ministers imply that RSG already included around £400m towards concessionary fares.]
3.5On 22 March 2006, the Chancellor, in the Budget, and later the Transport Secretary, announced that the free off peak travel scheme would be extended to cover bus travel throughout England from April 2008 (the 2008 Scheme). A further £250m has been allocated for this extension, but currently no decisions have been made on its distribution. Together with previous funding, the government now states that over £1bn will be provided per annum for concessionary fares.
4Current Scheme Arrangements
4.1The current national scheme (2006 scheme) allows for persons over the age of 60, and specifically defined disabled persons, to be able to travel free of charge on off- peak local bus services within their local borough/district area (on production of a valid pass). Travel can be made between 9.30 am and 11.00 pm weekdays, and at anytime on weekends and bank holidays. The pass has to be issued free of charge by the local Travel Concession Authority (TCA) which is usually the Local Authority (District, Unitary or Passenger Transport Authority (PTA).
4.2TCAs are able to make reciprocal arrangements with other TCAs to offer wider schemes of travel, eg County-wide schemes.
4.3Within Warwickshire the TCAs have local enhancements of extending the period into peak time, from 9.00 am through to midnight, and also allow journeys which start or end in Warwickshire.
4.4In addition to the above, the Council offers companion passes to those who are severely disabled and are only able to access public transport with the assistance of a travelling companion. These are currently offered free of charge.
4.5Passes currently issued by the Council DO NOT include a photo, although two of the Councils’ passes in Warwickshire do. However, as a Council we are the only Authority in Warwickshire still to offer travel tokens as an alternative to passes. In April 2006 Stratford, which was the only other Council to offer this alternative, withdrew this option.
4.6Reimbursement to operators is based on the principle that they should be ‘no worse and no better off’ from participating in the scheme, based on ‘revenue forgone’ evidenced by the operators, but with adjustments for generated journeys and additional costs incurred by the operator. A company called MCL, acting on behalf of all of the TCAs in Warwickshire, undertakes the administration of the reimbursement.
52008 Scheme
5.1The National Scheme
5.1.1From April 2008, persons over 60 (but increasing from 2010) and defined disabled persons may travel on off peak local bus services in England (on production of a nationally recognisable pass, as defined by the Department for Transport (DfT)) between 9.30 am and 11.00 pm weekdays and anytime weekends and bank holidays.
5.1.2Passes for the national scheme will need to be photo passes, preferably in ‘smart card’ format, issued free of charge and will have a life of no more than five years.
5.1.3Existing powers under the 1985 Act to offer free or chargeable enhancements is still available to TCAs and other Authorities.
5.2County scheme enhancements
5.2.1To match what is in the County scheme to which we currently belong, the operating times of the scheme will need to be extended into peak times – ie from 9.00 am (the extension from 11.00 pm to midnight is academic in that few if any buses operate locally)
5.3Local enhancements
5.3.1Companion passes are currently only issued by ourselves and Nuneaton and Bedworth Borough Council. Very few are issued as they are directly linked to an eligible severely disabled pass holder.
5.3Reimbursement of Bus Operators
5.3.1The basis of reimbursement and funding has changed. The main change is that reimbursement to operators is based on the Borough or District in which the journey starts, not by which TCA issued the pass. Hence, for example, a current journey into Coventry and return would be charged to NWBC, whereas from 2008 only the journey to Coventry would be charged to us, the return journey would be charged to Coventry. However, anyone travelling into the Borough would be covered by their start Authority, all return journeys would be charged to NWBC. Due to the lack of journeys taken into North Warwickshire by people living outside the boundary, we feel the impact of this on the Council will be very small.
5.3.2Unless reciprocal or other arrangements are entered into with other TCAs, all local scheme enhancements would apply to outward journeys only. All journeys solely within the Borough would automatically be covered. This would mean, for example, pass holders may not be able to travel in another area before 9.30 am, and that companion passes would not be recognised outside of the Borough, with the potential effect that a companion may be able to travel free with their ‘care’ to, say, Walsgrave hospital, but would have to pay the standard fare to return.
6Timescales
6.1Preparation and collection of data
6.1.1New photo passes have to be issued to match a national specification, so that they can be recognised by all participating bus operators throughout England. These will follow a common format, with provision for some local branding.
6.1.2The specification will encourage, but not require the use of ‘smart cards’ [which also offer the opportunity to be used for other services, such as library cards/leisure passes etc]. As the majority of bus services in the area currently do not have ‘smart-ticketing’ systems which could read ‘smart’ cards, we do not intend to issue these, but we intend to capture as much information either initially or through subsequent surveys/questionnaires, to allow us to be in a position in future to be able to roll out ‘smart’ cards when appropriate. This is likely to be the position nationally for at least the initial few years of the scheme
6.1.3 We currently have the majority if not all of the required information to go on the passes apart from digitised photographs. This will require us for the first time to arrange for photographs to be taken. How best to achieve this in a very short timescale is going to be a major challenge so an early decision on the removal or not of travel tokens will be necessary. It will also be necessary if they are retained to make that decision a three year decision, as offering year on year choice as at present will no longer be operationally or financially feasible.
6.1.4The national programme has identified July/August 2007 as the target to ensure that all necessary data is available to enable the issue of cards in time for April 2008. This was never realistic for us, due to the Act only being given Royal Assent on
20 July and then needing to make a decision on the future of travel tokens. We will need to make a decision by September to ensure we can collect data by November at the very latest. A timetable of decisions is provided later in this report.
6.2Advertising
6.2.1 There will be some national advertising by the Department for Transport (DfT) who also recommend supplementary local advertising. This will be important to publicise local enhancements and constraints.
6.2.2As we currently work with the other TCAs in Warwickshire, subject to decisions on local reciprocity, we will need to ensure that we are all publicising details at the same time to avoid unnecessary phone calls.
6.2.3We will also need to contact all current recipients of bus passes and travel tokens to advise of new scheme and need for new passes, and to gather additional information if we need to produce ‘smart card’ or similar National passes.
7Passes
7.1Style
7.1.2As mentioned above, photo passes will be the basis of the national scheme, with a nationally defined format and layout, but with space to add the issuing TCA or scheme logo and some other limited symbols on the face of the pass. The reverse of the pass is available for local information. It is likely that the specification will specify a ‘smart-card’ format.
7.1.3Companion and other local scheme passes will need to be sufficiently different from the national scheme passes to indicate the applicable concession clearly to bus operators.
7.2Procurement
7.2.1DFT are developing framework agreements for a range of services through a national procurement process.
7.2.2However, if we decide to issue ‘flash’ cards {ie similar to now}, we may be able to issue all of the necessary cards for April 2008 with the help of our current billing partner, who assists us with the issue of Council Tax demands. This will also enable us to maintain an on-demand service for the next few years until it becomes necessary to convert to ‘smart’ cards. This could be a “nominal” cost alternative.
8Involvement of Centro/other operators
8.1Warwickshire County Council is managing the current County wide scheme and exploring new reciprocal arrangements with adjacent TCAs, including Centro on behalf of the other Warwickshire Councils.
9Decisions
9.1Timetable that must be followed to achieve an issue by April 2008
- Decision on scheme enhancements – September 2007
- Make decision on the future of travel tokens - September 2007
- Write to all current pass and token holders – September 2007
- Collect data for bus pass issue – October/November 2007
- Reimbursement methodology – negotiations with operators to be undertaken by MCL – August to November 2007
- Monitor appeals for likely impact (Warwickshire scheme currently under appeal) - ongoing
- Publish Scheme – 1 December 2007
- Final Funding decision to be taken by Government – December 2007
- Take delivery of cards – February 2008
- Issue Cards (and tokens if retained) – March 2008
Effectively service decisions will need to run ahead of financial decisions – we need to commit resources and make a decision by September to meet required deadlines
10Future of Travel Tokens
10.1The Council is now the only Authority in Warwickshire which issues travel tokens as an alternative to a bus pass, other than Rugby which does so in very limited circumstances (see 14.3). Stratford DC was the last to remove this choice in 2006, which was achieved without significant protest from residents.
10.2Since the bus pass was introduced as part of a National scheme in 2002 we have seen the take up of travel tokens fall from 80% to its current position, just over 40%, as shown in the table below. A map of bus routes in the area also shows that in recent years bus coverage across North Warwickshire has improved which, along with scheme improvements, has led to the swing towards higher bus pass take up.
10.3Should the remaining applications we are expecting to take us to our current take up level of 9700 all apply for their concessionary entitlement and take tokens, this will increase to 46%..
10.4The following table shows the current take up of passes to tokens by electoral ward. What is very surprising is that the highest level of tokens is taken in what would be considered our more urban wards, as opposed to more rural and outlying areas.
WARD / PASS / TOKEN / TOTAL / % on tokensAtherstone North / 286 / 453 / 739 / 61.30
Atherstone Sth and Manc / 317 / 453 / 770 / 58.83
Atherstone Central / 231 / 309 / 540 / 57.22
Baddesley & Grendon / 320 / 376 / 696 / 54.02
Polesworth West / 196 / 226 / 422 / 53.55
Polesworth East / 255 / 271 / 526 / 51.52
Dordon / 225 / 218 / 443 / 49.21
Newton Regis & Warton / 188 / 182 / 370 / 49.19
Follongley / 194 / 135 / 329 / 41.03
Arley and Whitacre / 431 / 255 / 686 / 37.17
Hurley and Wood End / 293 / 158 / 451 / 35.03
Curdworth / 233 / 114 / 347 / 32.85
Coleshill Sth / 417 / 194 / 611 / 31.75
Coleshill North / 307 / 130 / 437 / 29.75
Hartshill / 366 / 152 / 518 / 29.34
Water Orton / 401 / 119 / 520 / 22.88
Kingsbury / 448 / 101 / 549 / 18.40
TOTAL / 5108 / 3846 / 8954
10.5As taxis are the main alternative to buses for token users, the value of tokens would need to be increased in line with taxi tariffs, to prevent the value of the concession being diminished. Current day time tariffs are:
1 mile - £2.20 2 miles - £3.70 3 miles - £5.20
4 miles - £6.70 5 miles - £8.20 6 miles - £9.70
10.6It is difficult to predict with total accuracy the benefits or cost to the Council of removing the option of tokens but based on the known figure of removing tokens currently issued at £30 per person on payment of a £5 fee, we have used a figure provided by MCL as the likely extra cost of increased reimbursement to the bus companies.
10.7The current cost of tokens and postage (based on 3,846 take up) is £101,919.
10.8If all remaining people to apply do take up tokens as expected if an application is made, the cost of tokens to the Council and postage (based on 4700 take up) is £124,550.
10.9Based on those people all taking bus passes (which is unlikely as some will use private cars and possibly not use buses at all or at the same level of existing users), it is assumed the likely additional cost to bus operators would not exceed £60,000.
10.10This would result in a net saving on the current scheme in the region of £40,000 to £60,000 if travel tokens were removed on current estimates and assumptions.
12Benefits to the Council from discontinuing tokens
12.1Easier administration process – only one choice and no payments to take.
12.2Reduced telephone calls in the contact centre.
12.3It will enable the Council to issue a lifetime pass or pass for at least three years, significantly reducing the burden and cost of annual renewal. Costs currently run at approximately £8-9,000 per year and an unquantifiable saving on manpower will be made, providing an opportunity cost for other activity at what is the busiest time of the year when Council tax bills and rent accounts are issued.
12.4We will maximise the Government grant, which is a one off payment in 2007/08. We should get £15,694 more on current assumptions.
12.5Remove risk of tokens not being used or used as currency for anything other than legitimate travel.
12.6It will remove the pressure to increase the level of travel tokens that has remained the same for the last three years. On current take up levels, a £5 increase will have little impact on the number of journeys that can be taken by an individual but will increase the cost to the Council of just over £20,000.
12.6Possible reduction in people applying who will prefer to use their own vehicles.
13Disadvantages to the Council from discontinuing tokens
13.1There will be a perceived loss of choice by customers who currently take travel tokens either by preference or due to limited bus availability.
13.2There will be an increased initial cost of bus pass issue (part or fully offset by Government grant).
13.3Reimbursement to bus companies is greater than estimated (although still expected to be less than current cost of travel tokens).
13.4There will be a loss of revenue for local taxi companies.
13.5If travel tokens were retained, we would possibly have to make it clear that once a bus pass was taken, a customer couldn’t revert back to travel tokens.
14Community transport alternatives to travel tokens in Warwickshire
14.1If members decide to discontinue travel tokens they may wish to consider adopting a similar community travel scheme to those operating in other Warwickshire councils to meet the need of the disabled and those in rural areas. These are explained below.
14.2The Flexibus scheme currently operates throughout Warwickshire. The buses operate to a fixed destination point but can detour where practical to pick up or drop off people to and from their homes. The 2008 scheme free bus passes will be acceptable on the Flexibus. This service can be promoted as an alternative to tokens where appropriate.
14.3Rugby Borough Council pays for a community bus scheme and issues travel tokens to qualifying residents of villages served by less than two buses per day. This provision is currently being reviewed.
14.4Both Warwick and Stratford Councils provide a community taxi service.
15Report Implications
15.1Financial Implications
15.1.1DfT/Treasury has identified an additional £250m to cover the additional cost of the 2008 scheme. This is intended to cover the additional costs of reimbursement incurred by “hot-spot” and “honey-pot” authorities. These will be mainly tourist based or major retail centres, though other hot-spots, such as regional or major hospitals, may generate additional out of district visitors. The funding is intended to cover the ‘return’ journeys. Due to the nature of the Borough, we may not receive a comparable proportion of the new £250m as we did of the 2006 budget of £350m.
15.1.2The DCLG are currently consulting Councils on how to best distribute these funds, whether it should be a specific grant to authorities or via the existing formula grant system. They have consulted on options for distributing the additional grant via formula grant which if chosen would give the Council between £146,000 to £261,000, based on the three different criteria being considered:
£146,000 based on day and overnight visitors
£161,000 based on a combination of commuters, visitors and people on incapacity benefit
£260,000 based on day visitors