Concessionary travel will be at the centre of local authority budgets for 2009/2010

At the Preston City Council Central Area Forum a presentation was made about Preston City Council’s finances for the year ahead and the year that is nearly passed.

The forecast for the 2009/2010 budget shows that the Council could be nearly £1.5 million over budget due to the changes to the concessionary fares travel scheme. The government has launched a central initiative to get council’s to pay for concessionary fares (cheap travel for pensioners and those with disabilities) and changed the way they are paid for.

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Councillor Eric Fazackerly outlined the changes in his speech:

As Preston is a major transport hub, we are likely to pay twice for a concessionary fare as people pass through our bus station. For example, if someone is travelling from the Ribble Valley to Southport via Preston they will pay for four journeys.

The journey from Ribble Valley to Preston will be paid for by Ribble Valley. The journey from Preston to Southport will be paid for by Preston. The journey from Southport to Preston will be paid for by Southport. The journey from Preston to Ribble Valley will be paid for by Preston. Preston City Council is paying half of the concessionary fare cost, while the two other local authorities are paying a quarter each.

The Council is having urgent meetings with relevant local authorities and also with government ministers to put their case – as areas such as Preston that are major travel interchanges will be the ones who take the brunt of the concessionary fare changes.

In 2008/2009 so far the Council has budgeted to spend £101 million. It generates £70.7 million from sales, fees and charges. This leaves a budget to find of £30.3 million. The breakdown of this is £9.7 million comes from council tax, £19 million from a central government grant and £1.6 million is found from council reserves (money put away from better years).

If the concessionary fares charges were to add £1.5 million to the council’s budget for 2009/2010 this can either be paid for by increasing council tax or digging deeper into council reserves. The council reserves currently sit at around £2.6 million and they are told by central government to always keep around £1.1 million in reserve.

The other option is for the council to make ‘efficiency savings’ or cost cutting. In 2008/2009 the Council has made over £850,000 worth of efficiency savings, just over £100,000 ahead of the government’s target of £752,000. It’s not likely the Council would be able to make further efficiency savings to pay for the shortfall in concessionary travel.

What do you think? How should the council pay for this? Is central government being unfair? Should concessionary fares be increased?