New DfT concessionary travel payments formula published

The Department for Transport has published a set of new guidelines for how concessionary fares reimbursements should be paid from local authorities to bus operators.

It follows a major review of the existing formula by consultants SYSTRA and Frontier Economics covering matters such as the calculation of passenger numbers, the level of trip generation by offering the concessions, the cost impacts for operators of providing additional capacity and the implications of the £2 maximum fare cap.

The overall objective has remained that operators should be neither worse off or better off from carrying concessionary pass holders – both the elderly and those qualified as disabled.

An initial operator response to LTT was “It’s a major review. Until our consultants crunch the numbers we don’t know the full implications, but until now most authorities have continued to pay operators on pre COVID passenger numbers which are much higher than current numbers.

“The new guidance pays a bit more per passenger, although this varies considerably by area, but operators only get paid on actual passenger numbers so many operators could see a 20% reduction in overall income from concessionary fares.”

https://assets.publishing.service.gov.uk/media/659596a0d7737c000df333f0/dft-user-guide-calculating-bus-operator-reimbursement.pdf