Spiralling bus travel subsidies spark crisis review of costings

The concessionary fares scheme has proved immensely popular since being rolled out nationally two years ago by the Labour Government to give the over-60s free bus travel.

However, concerns are growing over the escalating cost of providing the scheme in North Yorkshire – with a high proportion of pensioners – as the bill has already begun to increase by as much as12 per cent a year.

Figures compiled by North Yorkshire County Council have shown that payments to transport operators cost 7.1m in 2008/09, although this figure rose to almost 8m in the last financial year.

The number of trips increased from 7.2m in 2008/09 to 8m in 2009/10.

The County Council is currently facing grave financial pressures amid predictions that there will be a surge in demand for services at the same time as funding from Westminster falls significantly in the wake of the recession.

The authority could have to save 40m during the next three years in the battle to balance an annual 900m budget.

The Council's corporate director for business and environmental services, Richard Flinton, has warned that the authority could be left to pick up a significant slice of the bill for administering the concessionary fares scheme if the Government looks to drive down its own costs.

Ministers have yet to decide on a formula for funding the scheme nationally, and a consultation with local authorities is due to begin this summer.

But Mr Flinton, who is due to take over as the County Council's chief executive in July, said: "The key issue for the Council is the cost of the scheme and the extent to which this cost will be fully met by funding from the Government.

"Clearly this is a concern for the authority and we must make sure we secure maximum funding for North Yorkshire. Until we get greater comfort from the Government, there is a considerable risk to the County Council.

"The scheme is obviously a huge benefit for those people who qualify for the concessionary fares, but it also creates significant pressures on local authorities across the country at a time when budgets are extremely tight."

North Yorkshire County Council will take over the role of administering the concessionary fares scheme from district authorities in April next year and it has started planning potential service changes.

But the cost of administering the scheme has been a significant issue since it was extended across the country two years ago.

The financial pressures have been amplified in North Yorkshire, as the county is seen as a prime location for retirement and subsequently has a large number of elderly residents.

Thousands of holidaymakers also use buses free while visiting North Yorkshire and heading for tourism hotspots such as Scarborough and Harrogate.

The Yorkshire Post revealed in 2008 that the number of pensioners using free bus travel to Yorkshire's prime tourist destinations was leaving a multi-million pound shortfall in funding.

The problems of under-funding are due to intensify, especially if high fuel prices prompt rises in bus fares which will then be passed on to local authorities paying for the concessions.

The pressures are expected to increase as North Yorkshire's population continues to slant towards an ageing demographic.

It is estimated there will be 50 per cent more people aged over the age of 65 living in the county by 2020 – a quarter of the total population.

In 2001, the over-65s represented only 18 per cent.