The Concessionary Fares Scheme in the UK?what Lessons Can Be Learned?



The Concessionary Fares Scheme in the UK?what Lessons Can Be Learned?

Authors

A Last, Minnerva Ltd, UK; A Meaney, Oxera Consulting Ltd, UK

Description

The concessionary bus fares policy in the UK is the subject of some controversy. This paper considers the lessons that can be learned, and the policy implications, from the authors? extensive experience in this area.

Abstract

The concessionary bus fares policy and reimbursement in the UK is the subject of some controversy. In this paper, we will argue that it is time to consider what concessionary fare policies are trying to achieve, and how well they achieve it. Although the focus will be on the scheme currently operating in England, lessons can also be drawn for schemes in other parts of Europe.

The political significance of the policy is illustrated by the fact that, despite the largest spending cuts for decades, governments across the UK have decided to largely preserve free bus travel for elderly and disabled passengers. It is unclear, however, whether the £1 billion being spent on free bus travel in the UK is achieving its stated objective of tackling social exclusion and improving the mobility of older and disabled people.

In particular, evidence from an analysis of Smartcard data, presented by Andrew Last at the ETC 2010, implies that a substantial proportion of concessionary journeys are made by a very small proportion of the eligible population. This suggests that the scheme may be a very expensive subsidy benefiting a comparatively small group of people. Moreover, because local authorities have a statutory obligation to reimburse bus operators for providing the concession, the burden of sustaining free travel has to take precedence over other support for the local public transport network. In the context of declining budgets and reduced Bus Service Operator Grant (BSOG) payments, the net result is likely to be much reduced support for marginal bus services, and fewer bus services for passholders to use their free bus passes on.

The tensions created by this situation are exacerbated by a disagreement about the correct level of reimbursement that operators should be paid. Individual concession authorities have a statutory duty to ensure that bus operators are left no better off and no worse off than they would have been in the absence of the concessionary policy. It is inevitable, given the unobserved nature of what would have happened in the absence of the policy, that reimbursement leads to conflict. The outcome of revised guidance from DfT seems likely to be more disagreement rather than less, at least in the short term.

The paper will review the policy issues raised by these developments, which are likely to include the need for:
- more clarity on what the policy is trying to achieve;
- a better evidence-base for judging its effectiveness and the value-for-money that it delivers;
- a clearer relationship between the funding provided and the cost to local providers;
- more effective guidance on reimbursement, to reduce the scope for conflict;
- an improved appeals process better able to deliver predictable and fair outcomes for all parties.

Publisher

Association for European Transport