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Regular news: Issue 554 17 Sep 2010

Rethink plan to axe free fare grant say councils

English Local authorities are urging the Government to rethink plans to scrap the special grant for concessionary fares, with one claiming that the proposed reforms contain “fundamental flaws”.

The Government is currently consulting on scrapping the  £223m special grant from next April, with funding instead paid to councils via the formula grant system.

The change would coincide with the transfer of responsibility for concessionary fares from district councils to shire counties in two-tier areas. This requires funding to be transferred from districts to shires.

The Local Government Association is currently collating member views on the consultation options. LGA consultant Caroline Green told LTT that a number of authorities were calling for the special grant to be retained.

One that has done so is Leicestershire County Council. It says the consultation options presented by Government would see the county receive between £4.9m and £7.2m for taking on the responsibility for concessionary fares, compared with the actual cost of the scheme of £6m. “The situation is worse for Leicestershire district councils,” said Leicestershire’s head of strategic finance, Pat Sartoris. He said they stood  to lose £2.25m more than they currently spend on concessionary travel.

Leicestershire says many of the consultation options also have a distributional impact, with one option resulting in a £91m shift of resources from shire areas to metropolitan areas.

Another “shifts £231m into London and the metropolitan authorities with a corresponding loss to shire areas”. “Such an extreme effect cannot be justified,” says the county.

The future of concessionary fares will be discussed in depth at an event organised by LTT in early November.

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