The Department for Transport (DfT) has brought further uncertainty to concessionary travel reimbursement levels in England during the 2022/23 financial year by suggesting to local transport authorities (LTAs) various other approaches that could be adopted in addition to the policy previously articulated in its initial concessionary fares recovery guidance.
Issued in October 2021, the latter document suggested that LTAs reimburse operators at 90% of pre-COVID-19 levels from April, but decrease that by 5% every other month until it matches actual usage. DfT’s Concessionary Travel Team wrote to LTAs on 24 February and underlined how that approach remains its “default expectation.”
However, in the same email DfT acknowledges how events since the guidance was issued mean that concerns exist that adoption of its October 2021 policy on concessionary reimbursement by LTAs may impact service levels.
An alternative strategy for 2022/23 is thus being examined by DfT officials. Should it be agreed by ministers, it will be communicated during March and “be set out along the same basis as the original recovery strategy, but with a delayed start date of several months.” DfT expects LTAs and operators to work together and decide which of the two strategies is the most practical for their respective area.
However, compliance with either is not mandatory and LTAs may elect instead to set “their own approach” to levels of concessionary reimbursement. That could include adopting a lower level or maintaining it at 100% of pre-COVID-19 levels. A number have already confirmed that they will follow the latter route to protect services.
Those LTAs that choose to limit reimbursement levels are cautioned by DfT that in doing so, they should “be sensitive to the financial needs of operators” and “that any sudden reduction can lead to immediate negative impacts to operators and service levels.”
Data supplied by industry managers’ group the Ten Per Cent Club has shown that the rate of return of concessionary passengers lags some way behind that of farepayers. An overly rapid realignment of concessionary reimbursement with actual usage levels thus risks further compromising the financial sustainability of some services.
In a measure that will be more welcome, DfT’s latest email outlines an expectation that LTAs which reduce their pre-COVID-19 reimbursement “will carefully consider supporting the bus sector by reinvesting this funding in alternative ways, to continue to support the network and the objectives of the National Bus Strategy.”
Ongoing uncertainty around levels of concessionary reimbursement in England during the 2022/23 financial year sits alongside the same difficulty surrounding further recovery funding.
The Bus Recovery Grant is set to end on 5 April. DfT has said it is examining how further revenue support can be provided beyond that date but at the time of writing nothing concrete had been announced. It has been suggested that some clarity will arrive later in week commencing 28 February.
