CONCESSIONARY FARES SCHEME FOR OLDER DISABLED PEOPLE � KEY DECISION

							           CONCESSIONARY FARES SCHEME FOR OLDER/
               DISABLED PEOPLE – KEY DECISION
                              RESOLUTION REQUIRED
                       Report of the Strategic Director (Support)


1.    PURPOSE OF REPORT
1.1    To report upon the renewal of the current 3 year agreement with the bus operators
      for the county-wide concessionary fares scheme.
2.    BACKGROUND
2.1   The provisions of the Transport Act 2000 places a duty upon district, borough and
      unitary authorities to provide a statutory minimum concessionary fare scheme.
2.2   The Act provides for a national minimum half fare bus travel scheme for all
      pensioners and disabled people. Entitlement to the concession will be evidenced by
      a permit which is to be issued free of charge. The concession will be available all day
      on Saturdays, Sundays and Bank Holidays and between 9 a.m. and 11 p.m. on other
      days.
2.3    District and Borough Councils have the option of running their own schemes or
      appointing a suitable organisation to administer a countywide scheme.
2.4   The current County-wide scheme in Surrey came into effect from April 2001 and is
      administered by the County Council on behalf of the 11 Surrey district and borough
      councils. Prior to the Transport Act concessionary fare schemes were a Government
      Service the costs of which were borne by the county and the districts.
2.5   The total cost of reimbursing bus operators participating in the scheme is £2.45M for
      2003/2004. This cost is shared between the 11 Surrey district and borough councils
      based upon an estimated number of concessionary bus passes issued annually,
      together with a contribution from the County Council of £354,000. The cost to this
      Council in the current year is £207,790 (the cost of the concessionary permits is
      £181,660 of this budget).
3.    RENEWAL NEGOTIATIONS
3.1    Initial discussions have taken place with key bus operators. A total reimbursement
      figure of £2.25M for 2004/05 would seem to be possible. This represents a reduction
      of some £263,000 compared with the total reimbursement for 2003/2004 (with 3%
      inflation). The reason for the negotiated reduction is that SCC have sought to have
      taken into account a ‘revenue foregone’ system of calculating reimbursement. This is
      based upon a very small sample of operators’ journey and fare revenue data and this
      supports a lower level of reimbursement for the future. The bus operators appear to
      be agreeable to this but potentially for one year only. Negotiations are continuing but
      with a view to achieving a 3 year deal at the same (plus annual increases for inflation)
      reduced cost.
3.2    For future years, in order to achieve better, more reliable information on ‘revenue
      foregone’, it would be necessary for specialist consultants to undertake a much larger
      sample survey and to conduct on-bus surveys. The estimated cost of the study
      would be between £30,000 and £50,000 which would equate to around £5,000 as the
      required contribution from this Council.
3.3   The study could be undertaken during the course of next year and therefore inform
      the next round of negotiations following either the one year or 3 year agreement
      currently being negotiated. The consultants could also review if it would be beneficial
      to change to a system of reimbursing the bus companies based upon a ‘revenue
      foregone’ system rather than the current system which is based upon mileage.
3.4   It should be borne in mind that there is no guarantee of the outcome of a consultant’s
      study; whilst it may indicate that the reimbursement to bus operators could reduce, it
      equally could indicate that is should increase.
3.5   The cost of the scheme is currently projected across the Surrey Borough and Districts
      in proportion to the number of permit issued. These figures were estimated in 1999,
      and now in the light of actual figures the proportions are being recalculated. The
      permits issued by Spelthorne are 3% higher then originally estimated hence the
      element to be borne by Spelthorne will increase.
4.    SURREY COUNTY COUNCIL FINANCIAL CONTRIBUTION
4.1   As stated above, SCC currently contribute £354,000 towards the overall cost of the
      concessionary fares scheme together with standing their costs of administrating the
      scheme as a whole.
4.2    Surrey County Council have recently considered their involvement in the
      concessionary fares scheme and have decided to:
      (a)    continue to administer the scheme on behalf of the 11 Surrey district and
             borough councils;
      (b)    reduce the current SCC financial contribution to the scheme of £354,000 to
             zero over three years; and
      (c)    give future consideration to the possible introduction of a concessionary fares
              rail scheme (Surrey Senior Railcard).

5.    FINANCIAL IMPLICATIONS
5.1   Based upon an overall cost of £2.25M, this Council’s contribution to the scheme in
      2004/05 would, after allowing for the cost of the survey and the reduced level of
      contribution from Surrey County Council, amount to £236,470 which is £55,000 above
      the cost in the current year.
5.2   The following table illustrates this position together with projecting this forward for the
      coming two years, this being based upon the assumption that a 3 year deal can be
      achieved.
      TABLE ‘A’ - FINANCIAL IMPLICATIONS
                                          2004/05          2005/06          2006/07
                                              £               £                £
        SBC Contribution                     236,470         250,312          264,154
        Cost of Survey                         5,000




        Net additional cost compared          59,810          68,652           82,494
        to budget 03/04 (excluding in
        the box)


6.    CONCLUSIONS
6.1    The impact from the change in funding and the number of permits issued is
      considerable for Spelthorne. Whilst there is little action we can take because of the
      statutory nature of the scheme it is very disappointing to see the county funding is
      being withdrawn, and without consultation. However because of the negotiated
      reduction in the cost of the scheme for 1 year no other borough is really having to
      bear additional costs – except Spelthorne. There may be scope to consider running a
      scheme ourselves, and I will be looking at the practicalities of this.
7.     RECOMMENDATION
7.1   The Executive are asked to note the decision by the Surrey County Council and to
      consider a way forward.


Contact:      Sue Sturgeon, Strategic Director (Support) on Tel: 01784 446225 or
              e-mail: s.sturgeon@spelthorne.gov.uk
Portfolio Holders:   Councillors Ted Culnane and Ed Searancke
Background Papers:          There are none