The strange case of concessionary travel funding
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How many times can you spend the same pot of money?
The question, particularly pertinent in a spending review year, arises out of an exchange between LGC and the Department for Transport last week over funding for the English National Concessionary Travel Scheme – so-called freedom passes for pensioners.
As LGC reported last Monday, provision of the scheme – a statutory responsibility – now comes with a hefty price tag for local government.
In 2017-18 a total of £1.1bn was spent on statutory concessionary travel. Analysis by North East Combined Authority chief finance officer Paul Woods suggests that while the scheme was fully funded in 2011-12, cuts since then mean less than half of that is now being provided by government with the cost to local government estimated at £652m in 2017-18.
The grant for concessionary travel was rolled into the upper tier block of funding in 2014-15, making it difficult to track how much exactly has been cut. Mr Woods’ analysis assumes the grant has been cut by the same percentage as the block of funding has reduced by overall.
But perhaps Mr Woods assumption is wrong? We asked the DfT to comment on Mr Woods’ analysis and confirm how much they were providing to councils, via the Ministry of Housing, Communities & Local Government, to fund the scheme.
They declined to answer the question and referred us back to the ministry, who also failed to tell us how much funding government was making available for this scheme.
Then, in response to a completely separate story on the Guardian website about calls for more funding for greener modes of transport a spokeswoman for the DfT was quoted as saying:
“We also support bus travel through £250m every year, as well as a further £1bn for the free bus pass scheme, paving the way to a more sustainable future.”
Funny they didn’t mention this in their response to LGC.
So, we tried again. Is this accurate? Why didn’t you mention it when we asked you this exact question only a couple of days ago?
In response LGC received some “background information” explaining that the ministry is providing councils “with access to £91.5 billion over the next two years to meet the needs of their residents”.
Ahem. Where to start? The ministry’s generosity in giving councils “access” to the £54.2bn their residents pay in council tax? Or the £25.5m from business rates that councils take persistent flak for despite not setting and only retaining half of what is paid? Actually, the real kicker is the claim that it meets “the needs of their residents” when report after report from the National Audit Office over the past two years has highlighted how the ministry has no real understanding of the impact of cuts on council services, and whether after nine years of austerity residents’ needs are in fact being met.
After thanking them kindly for their explanation of the local government finance system, LGC said we could only conclude that the statement provided to the Guardian is misleading and what it actually means is that £1bn of public money is spent on freedom passes, but the majority of that is by councils, not the DfT. Is that correct? – we asked.
The response: “The funding comes via government (MHCLG).”
Despite a request for further clarification it all went a bit quiet after that.
It may not seem like it matters that much who is paying, especially from the public’s perspective. However, the Local Government Association spelt out in no uncertain terms why it matters when it press released Mr Woods’ research over the weekend: if Freedom Passes continued to eat up ever more of council funding, authorities will be forced to cut subsidies for bus routes. Up to half of such bus routes could be at risk, the LGA claimed. A free bus pass is not much use if there’s no bus to use it on.
The DfT’s statement had moved on slightly, but still failed to acknowledge the contribution from councils and council tax payers:
“It is for councils to decide which bus operations to support in their areas, but we help to subsidise costs through around £250 million worth of investment every year,” said the statement that appeared on the BBC, the I and the Evening Standard.
“£42 million of this is devolved to local authorities and a further £1 billion from government funds the free bus pass scheme, benefiting older and disabled people across the country.”
But it also matters if government departments are persistently misrepresenting the facts. Meaningless answers make for a meaningless public discourse (and may help explain why we ended up in the nonsensical situation we are in today where Brexit has meant Brexit for nearly three years and no one is any the wiser).
Back to the question we started with: how many times can you spend the same pot of money? As we head into the spending review Whitehall must ditch the smoke and mirrors and acknowledge you cannot spend the same pound twice.