A consultation on a new distribution of £223 million funding for the hugely popular free bus pass, making it fairer for councils was announced by the Department for Transport today (Tuesday 4th Nov 2009).

Following concerns that some councils have received too much money, whereas others not enough, the Department for Transport is re-considering how the money is distributed, with an extra £5m of funding proposed for the South East.

The consultation paper is technical in nature and is intended primarily for TCAs who manage the reimbursement arrangements associated with the concession. However, comments are welcomed from any other stakeholders and interested parties, including members of the general public.  

Exemplification of revised distribution: states: Isle of Wight Council Original 10/11 Special Grant Funding 0.89 Under New Distribution 10/11 Special Grant Funding increase to 1.78 a difference of 0.89

• This new consultation concerns the distribution of funding for the concession and in no way affects passenger’s rights to free off-peak local bus travel throughout England. The statutory minimum concession is enshrined in Primary legislation.
• The special grant is solely to cover the additional cost of this extension. Funding for the pre-existing elements of the concession continues to be provided through Formula Grant. Total spending on concessionary travel is now around £1 billion a year.
• In total around 200 authorities will receive more money or will be unaffected by the revised distribution.  Overall the total amount of money allocated will remain unchanged.

Transport Minister Sadiq Khan said:

“The free bus pass is a popular policy, giving 11 million older and disabled people greater freedom and independence. Around £1 billion is now spent in total on this scheme every year with over £200 million devoted to extending it to travel anywhere in England.  Ensuring this extra money is distributed fairly and to where it’s needed most is critical to the continued success of the scheme.

“We have listened to concerns raised by some councils about the way the grant has been allocated and also assessed last year’s spending to ensure that we are getting it right. Today we are publishing a proposed revised grant distribution for 2010/11 which seeks to better match the pattern of costs being incurred.

“The changes we are proposing build on the success of the national bus concession and will not in any way affect older or disabled bus users who use the scheme. I now look forward to hearing views from authorities and hope to publish the final grant distribution early in the New Year.”

The special grant funding is in addition to the amount Government provides each year for concessionary travel through the formula grant process which continues to be the route for the bulk of Government funding. The special grant brings total spending on concessionary travel to around £1 billion a year.

The eight week consultation period ends on 30th December.  The consultation document, including breakdown by authority of the proposed revised distribution can be found at: www.dft.gov.uk/consultations/open/specialgrantfunding