New report on Concessions published
CONSULTANT WARNS ON ‘FLAWED’ CONCESSIONARY FARES METHODOLOGY
A key element of plans to compensate bus companies for the introduction of free concessionary fares in England is “seriously flawed”, according to a new report from leading UK transport consultants TAS. The concerns are associated with plans to make drivers issue “zero value” tickets to pensioners so as to capture their travel patterns.
According to the report, the extension of free travel to all parts of the country from 1 April is expected to generate some 255m extra bus passenger journeys a year, and to cost authorities between GBP169m and GBP239m, depending on the take-up of the new concession. This extension of free travel in England, and the parallel introduction of a new national scheme in Scotland, is expected to take the annual cost of travel concessions in Great Britain from its current GBP620m to around GBP900m – GBP67 per head per year for each of the 13.4m elderly and disabled people who qualify for a pass.
The 90-page report, Concessionary Fares UK 2006, builds on four previous surveys and reports published periodically since 1992. Other key findings of the research and analysis include:
- Take-up rates for concessionary passes currently vary between 41% for half-fare schemes and 85% for the London ‘freedom pass’
- There is no evidence that the few free schemes that currently exist in shire areas have higher take-up than equivalent half-fare ones – suggesting that take-up is as much related to the availability and frequency of services as it is to the level of discount offered
- The number of bus journeys per person per year undertaken by elderly people has fallen by 26.1% since 1991, and by 10.5% since 2000. The main reason for the fall seems to be an increasing proportion of car ownership amongst older people
- However, government research shows that between 10% and 12% of the Qualified Population make fewer bus trips than they otherwise would because of a fear of crime
- The introduction of a true national scheme, along the lines of the current Welsh and the new Scottish scheme, could offer significant savings in the cost of administering concessions in England, currently estimated to cost GBP31m a year
- Extra trips on passes are expected to increase overall bus patronage by up to 17% in the English PTE areas, and by around 6% in the English shires
- There is a mismatch in the Treasury’s local authority spending allowances and the actual amounts the scheme is likely to cost. TAS checked on a sample of authorities and found that the mismatch varied between 39% and 113%.
Under the current arrangements, bus companies are reimbursed by local councils for the revenue they lose by granting the concession. This is calculated by a series of complex formulas allowing for the fact that the existence of the concession generates journeys that would not otherwise take place. A key element in many of these calculations is the concept of “equivalent average adult fare”. The report warns that this calculation “will become significantly more difficult after the introduction of free travel in April 2006”.
Many authorities plan to rely on the issue of a ‘zero fare’ ticket to concession holders in order to assist in this matter. However, modelling undertaken by TAS has shown this approach to have serious flaws, and the validity of data collected will, the consultant believes, be open to serious question.
Commenting on the report, TAS director Chris Cheek said, “The changes introduced in many areas from 1 April will have a positive effect on the bus industry, with more passengers and more services.” But not all the news was good. “The system remains much too complicated for consumers, operators and councils alike,” he argued. “The law is still a minefield of discretionary and mandatory provisions, whilst there will still be a myriad of different time and geographical restrictions – which makes life for consumers and bus drivers much more complex than it needs to be.” A move to a single national scheme would make life simpler for all concerned, he added, and save the taxpayer millions in unnecessary administration.
ENDS
For further information, contact Chris Cheek on 0870 900 1440 or Paul Turner on 01772 204988