Hansard

First, I introduce Anne Gibson, the financial accountant in SPT who is responsible for looking after the concession scheme. I will pass any difficult questions to her.I do not want to go over the evidence that COSLA has presented. I thought that members of the committee might be interested to hear a bit more detail about the operation of the Strathclyde scheme, which is probably the largest in Scotland. My perspective will be different, but I will touch on a number of the issues that have already been mentioned.We have 309,000 cardholders in Strathclyde; that is a significant proportion—probably around 15 per cent—of the area's total population. Slightly more than 80 per cent of cardholders are elderly, with the balance made up of people with various categories of disability, of whom about 70 per cent are people with a physical handicap. The next biggest group—about 17 per cent—comprises people with either a mental handicap or a severe learning disability. About 7 per cent are registered blind and there are smaller numbers in several other categories. The tests that we use in Strathclyde are age, as defined in the relevant legislation; disability, satisfying criteria that have been agreed with the social work departments and the health boards; or inability to drive, for example someone who is epileptic and cannot hold a driving licence. We spread the net fairly widely to encompass groups of people who would find difficulty with independent transport and who have a social need.It is fair to say that the Strathclyde scheme goes back to local government reorganisation in 1975. The vision of the scheme's founding fathers was of a scheme that would give mobility at a relatively affordable price to defined categories of the community that were less able to pay the full market price. COSLA's evidence has demonstrated how the cost of transport has become increasingly burdensome for some groups in the community. Having said that, we recognise that the scheme is a crude tool for providing social assistance. Some people who benefit from the scheme are well able to pay full fares, but a choice has to be made between a scheme that is easy to administer and to understand but fairly blunt, and a scheme that is more targeted. We have always worked on the basis that the relative cost of the scheme justifies the broad approach. Public support for the scheme and its value to the elderly and other eligible categories in Strathclyde were amply demonstrated at the time of local government reorganisation, when there was considerable pressure to retain the Strathclyde scheme in more or less its present form. The requirement to carry over a pre-reorganisation scheme into the current local government structure has meant that we have a complex set of administrative arrangements for the Strathclyde scheme.The Strathclyde Passenger Transport area no longer coincides with the former regional council area of Strathclyde. To retain the benefits of the Strathclyde scheme throughout the 12 new unitary authority areas, the scheme is the joint property of those unitary authorities and of the passenger transport authority. It is a very strange animal. It has its own set of accounts and as of next week will have its own administrative committee. It is a joint scheme for which the rules and regulations are jointly determined.The passenger transport executive administers the scheme on behalf of the sponsoring authorities, but that is not part of the normal PTE function. We do that effectively as agents for the scheme sponsors. In practice, we are doing what we did before reorganisation: we are running the scheme throughout Strathclyde and we have built up a body of expertise and knowledge in applying the principles of the scheme and in interpreting the case law, which gets more complex as new administrative issues arise. We have just over 300,000 cardholders in the scheme who make an average of 163 journeys each per annum—a total of 61.2 million journeys. The administrative cost to the councils is just over £18.5 million. The bulk of that is made up of compensation to the bus and other transport operators that provide the scheme. The basic principle on which the scheme operates is a flat fare—currently 35p—which is available for any journey of up to 10 miles that starts within the former Strathclyde area. We do not cater for long, cross-boundary journeys. For example, you could not travel to Edinburgh on the Strathclyde concession scheme. You could travel a maximum of 10 miles into an adjoining area.The scheme applies to rail and also to ferry services for those who live on an island or peninsula in the scheme area. For example, if you live in Dunoon, you can get a concession fare to Gourock. If you live in Gourock you cannot get a fare across to Dunoon. The scheme is geared towards essential journeys and to the residents of the area. The residence test that we apply is that someone has to be a council tax payer or resident in the area—that is the sole test of eligibility.For journeys in excess of 10 miles, the calculation is that we deduct the average fare for the 10 mile portion of the journey, and then the passenger pays 35p plus the additional cost for the extra mileage in the journey. That is how it applies on the bus. Because there is a national railway concessionary travel scheme that is half-fare based, for journeys over 10 miles, the charge is half the adult return fare. We have slightly different reimbursement principles for bus and rail journeys over 10 miles, but the scheme is basically geared towards relatively short journeys. The average journey length is about three miles.Compensation is based on reimbursing the operator for the revenue that it has lost because the concession fare is paid. You have already heard that we apply a generation factor of around 30 per cent; we calculate that about 30 per cent of the traffic carried at concession fare would not otherwise be carried by the operators. I do not want to disagree with the previous evidence, but there is a fair body of expert evidence about elasticity and the effects of different fare levels. We are confident in our approach to elasticity because the concessionary fare legislation allows an operator to appeal if it disagrees with our figures. There was an appeal in the early 1990s to the then Scottish Office when both the operator and ourselves had the opportunity to present evidence. The inquiry found in favour of the principles that Strathclyde adopted at that time, which provides external validation of the principles that we have used in applying a generation factor to our fare calculation.With regard to extending the scheme on a national basis, we have always taken the view that the scheme was designed primarily to cater for local journeys. To provide national travel involves new principles and a different category of travel from that which is catered for under our existing scheme. It would open up a different category of journey to existing cardholders in Strathclyde. It is difficult to predict the effect of incoming cardholders on the Strathclyde scheme. There has been interest for a long time at UK level in providing for national interavailability of travel concessions. It is a common complaint, for example, that when a cardholder goes on holiday in another part of Britain, they cannot get a concession. One must ask whether that is the purpose of the concession scheme.We have adopted two basic principles, which could be useful in informing consideration of a national scheme and how the reimbursements should operate. An important principle is that the cost of the scheme should not be borne by other passengers. Remember that public transport users, by and large, are not among the wealthiest sector of the community. It would be wrong for other passengers to cross-subsidise the journeys of concessionary passengers. This is a social obligation, so it should be met by the community, not internalised in the public transport sector. That principle is well established in the case law on concessionary travel schemes.The second principle has already been mentioned—that the bus operator should be no better and no worse off as a result of the operation of the scheme. That raises questions about the degree of generated travel, the amount of travel that would not otherwise have taken place. I accept that that involves dealing with hypotheticals as there is some imponderability, but it should be possible to establish reasonably accurately the extent to which travel is generated as a result of reduced fares.Moving to a national scheme would create a new set of circumstances. Categories of journey would be carried that are not at present part of any local authority scheme, so it would be necessary to carry out surveys and research if such a scheme were to be introduced. There are comparators that we could use. For example, there is the rail national commercial concessionary scheme for elderly people. That should provide data on the type and length of trips that pensioners would make if there were a national interavailable scheme on all modes of transport.On what was said earlier about franchise arrangements, I have no problem with building into the terms of any public transport concession an obligation to take concessionary travellers. We must respect the principle that the cost of providing that should be transparent and met from sources other than fare payers. As far as Strathclyde is concerned, I must declare an interest as we have a revenue interest in rail passenger carryings on the Strathclyde network. A national scheme that built that into the reimbursement arrangements for the ScotRail franchise would ultimately flow through Strathclyde Passenger Transport and back to the Scottish Executive, so money would go in a bit of a roundabout way. If rail passengers in Strathclyde were given a concessionary fare as part of the franchise agreement, the public purse would ultimately pick up the cost under present financing arrangements.That is all that I will say on the general introductory principles. I am happy to answer any questions that committee members may have.