Local Transport Bill [HL]

moved Amendment No. 62A: 62A: After Clause 41, insert the following new Clause— ““Reimbursement of bus travel concession authorities Where a travel concession authority has responsibility for the administration of the national concessionary bus travel scheme, including the reimbursement of operators as defined under section 3(2) of the Concessionary Bus Travel Act 2007 (c. 13) (reimbursement of operators), the Secretary of State shall reimburse the authority the full costs of doing so, including capital and set-up costs.”” The noble Lord said: In moving the amendment, I am fully conscious that we discussed more or less the same amendment, or a similar one, a matter of months ago when the Concessionary Bus Travel Act was going through your Lordships’ House. It is very appropriate that I am moving the amendment today, because everything else that we are talking about is liable to collapse if we do not sort this matter out. In fact, I have been to a crisis meeting in Essex this morning. If anything, as I have just said, the issues that this amendment seeks to address are even more pressing five months after that last discussion. Things have worsened, and I will explain what has happened, particularly in two-tier areas where district councils administer this concessionary scheme. I say immediately that we all support the principles behind the Bill of allowing more concessionary travel for troubled people across the country. We must be clear on the whole cost of introducing the national scheme. The Government have moved to a free pass from a half-fare pass without really understanding what the total costs and take-up of the scheme would be. The resources identified nationally for 2008-09 are insufficient to support the additional costs of the bus companies, or for local transport authorities to operate the scheme. The Government have failed to recognise the popularity of the scheme and are refusing to absorb the costs if more people use the scheme than they originally estimated, and have failed to recognise the inflationary pressures within the system. Bus operators are also suggesting that fares may rise during 2008 and that present levels of reimbursement are inadequate. This will lead to even higher bills for local councils. Under the current arrangements, the financial shortfall of the national scheme will fall on the council tax payer. In Essex, for example, we now estimate that the costs will be an additional £8 million in 2008-09. Indeed, in my own county, the leaders of all 12 district councils—that is cross-party—together with Southend have come together to persuade the Government to take note of the issue and its grave potential impact on other services. That is happening across the country. To illustrate, one district council in Essex will have a shortfall of £500,000. A 1 per cent rise in council tax raises about £70,000, so to raise £500,000 it will have to put 6 per cent or something on council tax, which it obviously cannot do. Another district council has got £100,000 profit from the government allocation. Obviously, it will not put that into the pot to help other district councils. Everywhere in Essex I have been this week there is little talk about anything else. There are an increasing number and length of bus journeys now being taken. Estimates are that over 40 per cent of all passengers are now using concessionary fare travel, and it is predicted that this will increase even further. The rules of reimbursement of bus operators have become highly complex, leading to disputes between councils and operators which the Government have failed to resolve. This means that when the picture becomes clearer the final costs of the scheme could be even higher in Essex than the £8 million we are predicting for next year. I have a number of specific questions for the Minister. The situation is grave. What represents an acceptable level of additional costs? What constitutes an appropriate level of reimbursement for revenue foregone by the operator so that they are neither better nor worse off than they would have been? Will the Government, as they undertook to do when we discussed doing this legislation, fully fund it? If a district council or any authority is above the statutory minimum determined by the Department for Transport, it is that council’s choice. Authorities are concerned about the statutory minimum costs. The situation is grave. It is now leading to continued conflict between operators and local councils, with everyone threatening to sue everyone else. The whole problem threatens to undermine the new programme, which comes out on 1 April next year. It is a serious matter, and perhaps the Minister might think this is slightly out of kilter with current legislation, but it is so relevant because it affects the whole operation of the bus services—particularly where there are two-tier areas and small authorities with no ability to raise any quantity of money. I beg to move.