With concessionary patronage behind that of other groups when it comes to the bus industry’s recovery from COVID-19, it is becoming apparent that last decade’s approach to concessionary reimbursement in England is no longer fit for purpose.
The Department for Transport (DfT) further muddied the water with updated guidance in February, which provides a range of options for local transport authorities (LTAs) to choose from.
Out of date data being used for concessionary fares in some cases
Even before COVID-19, some LTAs were using updated data rather than those from the Lancashire Travel Diary that underpin DfT’s calculator.
It is clear that those patterns of usage will not return any time soon, if ever. Fewer passes in circulation will not be helped by the increase in age of eligibility, while those who have a pass are either not using it or travelling less – meaning that the current DfT calculator is invalid.
The reduction in concessionary patronage will make it harder for operators to justify additional resource cost to cater for those passholders. At the same time, the proportion of passengers counted as commercial will increase. Added to that, the overall reduction in patronage and the driver shortage will result in lower frequencies and thus a higher vehicle occupation rate.
Together, that will create a significant drop in additional cost payments received by operators, further removing those monies from any connection with reality,
Concessionary fares policy: Consider implications
DfT’s push for lower fares, and more multi-operator schemes priced with no or limited premium, will have an impact on average fare foregone and average commercial fare within the calculator. That is before we consider the impact of discounts for young people, which will reduce the number of passengers classed as adult.
Any new toolkit needs to consider the broadening of discounted and multi-operator fares when calculating the average adult fare.
New approach needed for future service delivery
What are the options going forward? One is to accept that generation factors and theoretical levels of discount applied in the absence of a scheme are no longer significant. For example, if a service costs £50,000 per month to provide and 25% of its passengers are concessionary, then the reimbursement required is £12,500. However, that approach might be deemed too simplistic by some, and would require some allowance for profit as well as independent scrutiny.
Given different levels of ambition within LTAs’ Bus Service Improvement Plans, it could be argued that each authority needs a unique approach to take account of differences in fares policy, service provision targets, promotion, and policies to deter car use. That means each LTA will also need to understand its local market.
We need a national conversation on the future of concessionary fare policy now, so that there is clarity in plenty of time for 2023/24.
