Rural Bus Services

Andrew Turner Excerpts

Tuesday 11th October 2011 Westminster Hall

[Mr Andrew Turner (Isle of Wight) (Con)]

I echo what my hon. Friend says. Will he admit, however, that there are problems that the council must tackle? There is the problem of people from off the island getting free transport on the island. People come into the area—I am sure this is true of most areas—for a holiday or for some other reason, but there is no income, or insufficient income, to the bus companies.

[Brandon Lewis]

I thank my hon. Friend, who has first-hand experience of that development. Like him, I represent an area that is heavily used by tourists; in fact, it is the second most popular seaside tourist resort in the country. The system means that areas used by tourists can be further adversely affected. That is partly the result of the complicated arrangement in place for funding bus systems. One of the best things the Government have done—I pay credit to them for what they have done so far—is to simplify the system. Some organisations claim that at one point under the previous Government there were 22 different forms of funding for the bus system. We have got that down to three or four, and it would be a great success if the Government simplified things further over the next couple of years and introduced one funding system that was transparent and understandable to everybody and that sat with one Department.

Another new scheme serves rural Northamptonshire with a fleet of new low-floor minibuses. It allows passengers to book a seat by telephone or text or on the internet so that elderly or frail people can be picked up from home, while others are collected at village bus stops at a set time. That is Northamptonshire county council’s excellent response to the need to save millions by reforming subsidised services. It is much better and more cost-effective, and it reacts much more to the needs of the user than a large, heavily subsidised bus going round villages when it is often empty or close to empty.

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[Brandon Lewis]

I thank the hon. Gentleman for his intervention. We certainly need more flexibility in the system. Whether that is purely in relation to bus operators or we have a system that allows for community transport to be authorised, run and organised by local authorities, we need an approach that is more flexible than simply looking at the traditional system of buses. As my hon. Friend the Member for Broadland (Mr Simpson) has mentioned, buses are not necessarily the most cost-effective solution or, indeed, the best answer for users. We need transport that can be used in rural areas by those with concessionary passes. As I was saying, demand-led services are vital if a rural network of transport is to exist. It is perhaps time to start talking about transport in the rural sense, rather then simply focusing on buses, which might not necessarily give the best service and use.

I am delighted that my county council in Norfolk has agreed to provide additional funding to look at and develop exactly that style of service. At the moment, more than 1,700 community transport organisations operate in England alone and offer transport services for people who are unable to access traditional public transport. It is vital that local authorities and organisations are empowered to provide alternative provision for residents.

An additional £10 million funding for community transport in rural areas is very, very welcome. However, the concessionary fares scheme does not apply to most community transport schemes because they operate under section 19 of the Transport Act 1985. Currently, only registered services run by community transport operators under a section 22 permit are eligible for the scheme. I was disappointed that, when I received a reply from the Minister to a recent written question, it indicated that the Government refuse to consider altering the legislation to widen the eligibility further and that they are leaving the matter at the discretion of local authorities. I ask the Government to look at that issue because dealing with it would be a positive step forward that could further encourage, develop and empower local decisions to be made by local councils and bus and other transport operators based on local need. I agree with the Select Committee on Transport’s recommendation made in August this year:

“If the Government genuinely wants to encourage the growth of the community transport sector, it should legislate to permit the use of the concessionary pass on a wider range of community transport services.”

[Mr Andrew Turner]

Would it not be worth while in some way restricting the viability of the scheme, so that someone could arrive on the Isle of Wight from Northumberland and wave a flag? Some local use of these things is fine, but we do not want a national scheme.

[Brandon Lewis]

My hon. Friend makes a good point in the sense that the national scheme as it has been structured is effectively a bear trap left for this Government by the previous Government. Such a scheme is difficult to sustain and the issues surrounding it have opened up this debate, so that it has become a discussion about how concessionary passes operate. If we accept that a large contributory factor to the rural bus funding crisis is the increased cost of providing a concessionary fare scheme, we have to consider how that can be reformed.

It is absolutely right—I fully support this—that the coalition agreement insists that the Government will continue to keep the scheme. However, we need to find a way to fund it realistically for the long term. That means allowing councils to have enough flexibility to cover administration costs or offer innovative alternatives, some of which I, and colleagues, have touched on this morning.

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[Guy Opperman]

I am grateful for the example. We could all provide examples of our bus companies and the respective counties in charge of bus services not working together. There are good examples: we have a partnership in Northumberland with the Newcastle system, which works very well, but it is an isolated example, sadly. I urge that degree of integration. Surely that is localism in its purest form—the degree to which local organisations talk to each other, rather than existing in a silo, which has been the case for so long.

I finish on the point I made to my hon. Friend the Member for Great Yarmouth. The Local Government Association is in broad terms seeking greater control of bus companies. We have the Government as the ultimate provider, which is passed down to county councils, and the county council then abrogates the responsibility to individual bus companies. The bus company then runs the show. It can stop a service, or do whatever it likes with it. The Government must give guidance to the local authority so that it works with the bus company, and the company does not stop a service just because it does not like it after the contract has been awarded.

[Mr Andrew Turner]

Will my hon. Friend consider a problem that applies to the Isle of Wight? I do not accuse Northumberlanders of this, but in some areas—mine is one—there is a bus monopoly. In my constituency there is a complete monopoly, and one bus company covers the whole island. There is no entry, and that should be considered.

[Guy Opperman]

I now give way again.

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[John Woodcock (Barrow and Furness) (Lab/Co-op)]

I congratulate the hon. Member for Great Yarmouth (Brandon Lewis) on securing the debate. It has been worth while, but we will see how worth while when we hear the Minister’s answers. I will speak briefly to give him as much time as possible to expand on the points that have been raised, particularly the free bus pass, which I shall say more about in a moment.

[Mr Lee Scott in the Chair]

It was a pleasure to see you in the Chair, Mr Caton, and it is now a pleasure to see you in the Chair, Mr Scott. There has been a lightening transformation.

Barrow and Furness is a semi-rural constituency in Cumbria and it has been hit incredibly hard, as have many other rural areas. In my patch so far, we have campaigned for a temporary and partial reprieve for some services, but a great question mark hangs over them, as is the case in many of the areas that have been referred to. I grew up in the red republic of south Yorkshire, as it was then, when my right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) was the firebrand leader of Sheffield city council, and one could go anywhere in south Yorkshire for 10p, or for 2p for juniors such as I was. Back in those days, we did not anticipate Norfolk county council joining the agitation about buses, but that is a sign of our changed times.

There is great consensus on some of the points raised today, and Government Members might wish to see me as someone who said what he really thought. Government Members are polite people who are looking to their future in Parliament. The triple whammy effect was mentioned, and it is being severely felt. The hon. Member for Great Yarmouth was polite when he explained that when he looked at the settlement for Norfolk he thought it must have been a mistake. I suggest, however, that it was not an unintentional mistake, that there is clear intent by the Government to impose cuts that the Opposition believe go too far too fast, and that real, lasting damage will be caused to communities.

[Mr Andrew Turner]

I understand what the hon. Gentleman says, but he must not conclude from our criticism on one issue that we would criticise on others. I would like to see where he would make cuts in place of those areas in which he wants us to get some balance.

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[Norman Baker]

I am saying what I was told by the Confederation of Passenger Transport. Immediately after the spending review, it indicated that in general terms it felt able to absorb the reduction in BSOG without an effect on services or fares. That is what it said. I am happy to provide the quote if the hon. Gentleman wants to see it.

It should also be recognised that, even in places such as Norfolk, about two thirds of journeys are on commercial services and are therefore unaffected by what local authorities decide in relation to their own budgets.

Let me turn now to concessionary travel and say first very plainly that, even in these times of austerity measures, the coalition Government are firmly committed to protecting the concessionary bus travel scheme. That was made clear in the coalition agreement, and the Chancellor of the Exchequer reconfirmed that commitment in the spending review. The scheme is of huge benefit to about 11.5 million people, allowing free off-peak travel anywhere in England. That generous concession provides older and disabled people with greater freedom, independence and a lifeline to their community. It enables access to facilities both within and outside their local area and helps them to keep in touch with family and friends. Travel to visit popular tourist destinations can also bring benefits to the wider economy.

The Government are aware of how precious the benefit is to older and disabled people, which is why we are focusing our efforts on assisting local authorities to find efficiencies through reforms to administrative arrangements for the scheme, rather than cutting back on the entitlement. For the avoidance of doubt, the free bus pass is here to stay.

[Mr Andrew Turner]

My hon. Friend is quite correct in what he quotes. I fell into the bear trap that the Labour party left for me, and so did my right hon. Friend the Prime Minister, as far as I can see.

[John Woodcock]

We gave these people free bus travel.

[Mr Turner]

I was wrong to support the scheme, but I supported it and I will support it for the rest of this Parliament. What happens then is a matter that we will have to debate and develop.

[Norman Baker]

I can say to my hon. Friend to be helpful that a number of well-meaning people who are very committed to bus services have raised similar points to the one that he has raised. Those points have been noted and passed both to the Department for Transport and elsewhere in Government. However, we are clear about the commitment that we have made to the free bus pass, and that is not going to change.

I should at this stage pick up a point made by the hon. Member for Great Yarmouth about trying to save money on administration in relation to the bus pass. That is right. We need to consider those types of saving. That is one reason why we were supportive of the idea of moving the administration from districts to counties, which saves considerable costs in the administration of the bus pass.

Only one small change has been made to the entitlement to concessionary fares: the age of eligibility has been increased in line with the changes taking place to the state pension age. That is right, as people are living longer, staying healthy longer and tending to stay in work until later in life. That change started in April 2010, just before the last general election, so local authorities are already making savings as a result. The change will assist with the financial sustainability of the scheme, while reserving the benefits of the bus pass for those with the greater need.

What has not changed at all—this is an important point—is that operators should be reimbursed for concessionary bus travel only on a no better, no worse-off basis. That is in primary legislation introduced by the previous Government. Nothing that this Government have done has changed that at all. Almost a year ago, the Department for Transport published revised guidance to local authorities to support them in determining their arrangements with bus companies, to make sure that they are no better and no worse off. I made that clear in my recent letter to the hon. Member for North West Norfolk (Mr Bellingham) and my hon. Friend the Member for North Norfolk (Norman Lamb), both of whom came to see me to talk about bus services in the county.

In a report published in May, the Competition Commission strongly commended the guidance issued by my Department, since it helps local authorities to take account of the impacts that the concessionary travel scheme can have on commercial pricing policies. The commission says that it hopes that the guidance will be followed to the greatest extent possible. In fact, the majority of local authorities are now using the guidance and should be reaping the financial benefits of taking it on board. I stress, however, that it is entirely a matter for them whether they use the guidance or not. There is no compulsion to do so. The only compulsion is the one that existed in legislation introduced by the previous Government to ensure that bus companies are no better and no worse off from operating the concessionary fares scheme. The guidance can be a useful starting point for negotiation between bus operators and local authorities and, so far this year, more than half of the appeals lodged by operators have been withdrawn—a significant improvement on previous years.

I remind Members that our funding for bus travel does not stop at concessionary travel reimbursement and bus operator subsidy. We have also provided almost £47 million to local transport authorities and bus operators to purchase 542 low-carbon buses across England, through our green bus fund. I would also like to refer to our new £560 million local sustainable transport fund, which this Government have introduced. There have been 39 successful bids in tranche 1, 25 of which have included bus-based elements to help bus travel locally.

Turning to the third element, I recognise that the recent local authority settlement has been challenging. There is no doubt about that. I have heard the argument that the distribution method used at the time does not reflect the particular circumstances facing each local council. That has been brought into sharp relief now that, since April, all funding for the statutory concessionary travel scheme has been provided as part of the settlement from the Department for Communities and Local Government. I should point out, however, that last summer’s consultation by that Department provided an opportunity to influence the final distribution method for the first two years of the spending review period. The overall funding then set was deemed by DCLG to be sufficient to enable local authorities to deliver effective local services, while ensuring that authorities do not set excessive council tax increases. Councils now have another opportunity to make their voices heard. DCLG is consulting on the broad options for a new way of funding local government, based on business rates retention.

The Government are clear that any changes must protect the interests of local taxpayers and the vulnerable, be fair for all councils and encourage growth. Councils that are more deprived—I accept the point that has been made about the definition of deprivation—will continue to receive central Government support. We recognise, however, that it may be possible to improve the way local council spending on concessionary travel reimbursement is treated in allocating local government resources. That is why, following my meeting in April with the hon. Member for Great Yarmouth, my hon. Friend the Member for North Norfolk, the hon. Member for Broadland (Mr Simpson), my hon. Friend the Member for Norwich South (Simon Wright), and the hon. Members for South West Norfolk (Elizabeth Truss) and for Mid Norfolk (George Freeman), I wrote to the Minister for Housing and Local Government on 20 July about the way formula grant is calculated, the relative needs formula for concessionary travel, the so-called floor-damping mechanism, and the local government resource review. That is why the consultation considers whether to review the relative needs formulae for concessionary travel when establishing the baseline for local government funding from 2013-14 onwards.