Nearly half of all bus routes at risk as funding gap for free bus pass reaches £650 million

The funding gap for the concessionary bus fare scheme in England, which provides free off-peak bus travel for older and disabled people, has grown to an estimated £652 million, new analysis for the Local Government Association reveals.


Bus

Council leaders are warning that, unless government addresses this widening gap in the Spending Review, vulnerable residents could be left isolated and unsupported, particularly those in rural areas. Communities could also see increased congestion and poorer air quality.

Uncontrollable costs and reductions in government funding means the money available for concessionary fares, the national ‘free bus pass’ scheme, was underfunded by an estimated £652 million in 2017/18, LGA analysis shows. This is significantly more than the LGA’s previous estimate of at least £200 million made in 2016 and is forecast to increase further in 2019/20.

The National Concessionary Travel Scheme is a statutory duty administered by councils, which are having to increasingly fill the gap between the cost and government funding for the scheme with their own limited resources.

To try and do this, councils have been forced to reduce spending on discretionary concessionary fares across England, from £115 million in 2014/15 to £85 million in 2017/18 – a fall of 26 per cent; and in England, outside of London, spending on supported bus services is now £122 million less than 2010 – a reduction of 33 per cent.

This is less money being spent on providing supported rural bus services, discretionary subsidised bus services, such as free peak travel, post-16 school transport, companion-free travel, or assistance for young person’s travel.

Nearly half of all bus routes in England currently receive partial or complete subsidies from councils and are under threat.

The LGA is warning that the underfunding of subsidised bus routes, coupled with councils facing an overall funding gap of £3.1 billion in 2019/20, means that local authorities will struggle to maintain current subsidies for bus routes which will continue to fall unless they are given the funding to protect them. 

The LGA said the future of bus services is of huge concern and would be made more secure if the Government reinstated the full funding of the costs of the national concessionary travel scheme in its forthcoming Spending Review.

Cllr Martin Tett, the LGA’s Transport spokesman, said:

Councils are being increasingly forced to subsidise the national free bus pass scheme. An estimated funding gap of £652 million a year for concessionary travel is unsustainable for councils already struggling to protect other subsidised bus travel in rural areas, or helping young people with their travel costs.

“Local authorities want to protect the bus services which provide a vital service for our communities and are a lifeline for our most vulnerable residents to go shopping, pick up medication, attend doctor appointments or socialise with friends and family.

“But due to significant funding pressures and the underfunding of the national free bus pass scheme, councils have been forced to reduce or scale back these services and review subsidised routes, and even reduce spending on other vital services to plug the gap.

“Properly funding the national free bus pass scheme is essential if the Government wants councils to be able to maintain our essential bus services, reduce congestion and protect vital routes.

“If this is not addressed in the Spending Review it could lead to older people having a free bus pass but no bus to travel on.”

  1. Since 2013/14 there were more than 297 million fewer bus journeys across the country in 2017/18 - a decrease of 6.4 per cent.
  2. Since 2010/11 more than 3,000 supported bus services have been reduced, altered or withdrawn.
     
  3. Estimated concessionary travel funding and concessionary travel costs in England:
             
 

2010/11

2011/12

2012/13

2013/14

2014/15

2015/16

2016/17

2017/18

 

£m

£m

£m

£m

£m

£m

£m

£m

CT Funding

1072

1082

879.89

940

840

701

591

507

CT Costs

      1094

1109

1226

1165

1189

1191

1182

1159

Funding gap

         122

-27

-346

-225

-349

-489

-591

-652

In considering the level of funding available for concessionary travel, it has been necessary to track the changes in funding over time as the level of funding concessionary travel is currently not particularly visible. There have been changes in how funding has been made available to local authorities, and reductions made to the funding formula. Since 2014/15, the funding for concessionary travel was simply included in the ‘upper tier block’ of funding that was divided between Revenue Support Grant (60 per cent) and Baseline Business Rate Funding (40 per cent) and is subsequently shown as part of the Settlement Funding Assessment. Subsequent annual reductions in the Upper Tier Formula Funding has meant that the gap is now estimated to stand at £652 million.

4. Council spend on discretionary concessionary fares across England:

 

2014/15

2015/16

2016/17

2017/18

 

£m

£m

£m

£m

Discretionary concessionary fares (adjusted)

 115

 102

 85

 85

Source: RO2 returns

5.Public transport subsidies to bus operators:

 

2010/11

2011/12

2012/13

2013/14

2014/15

2015/16

2016/17

2017/18

 

£m

£m

£m

£m

£m

£m

£m

£m

Support to public operators (adjusted, England outside London)

371

 351

 331

 318

 302

 278

 260

 248

Source: RO2 returns

6.Buses in crisis, Campaign for Better Transport 2018.

7.Analysis of the funding gap for the concessionary bus fare scheme was undertaken for the LGA by Paul Woods, Interim Chief Finance Officer at North East Combined Authority.

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