Page last updated at 06:56 GMT, Thursday, 6 August 2009 07:56 UK

Free bus passes are 'inefficient'

Bus travel
Councils say they do not have enough funds to pay bus companies

Providing free bus travel for all pensioners is an "inefficient" use of public funds, a report has concluded.

The study by the consultancy Oxera for the Local Government Association says councils would be better off targeting those who were most in need.

Free bus passes for over-60s in England were introduced by the government in 2008, but many councils say the funding arrangements leave them out of pocket.

But the LGA said ending such a "popular policy" would be "problematic".

'Highly valued'

Prime Minister Gordon Brown first announced the £1bn national scheme, giving pensioners a pass to use buses for free, in 2005 ahead of a general election.

And, at first, the policy was only for routes within the local council area where the pensioner lived, but the scheme was extended to allow unlimited travel anywhere in England between 0930 and 2300 for pass holders.

Scotland: Over-60s get free travel on buses and some coaches any time of day, including morning rush hour
Wales: Over-60s get free travel on buses any time of day
Northern Ireland: Over-65s get free travel on buses and trains, and can travel over the border into the Republic of Ireland using the same pass

Local authorities in seaside resorts and tourist destinations have complained about being inundated with pensioners.

They say they have to pay bus companies for free fares, but are not given enough money from the government to do it, leaving a shortfall.

But the Oxera report said there were concerns about whether free bus passes represented "value for money".

It said: "Better targeting at the scheme's intended beneficiaries would generate savings which could be made available to local authorities to support lower-cost travel for locally prioritised, additional concessions.

"Although the scheme has helped to improve social inclusion, there is also evidence that the scheme is targeted too widely, benefiting many people on higher incomes and with access to cars (ie, those not affected by social exclusion and accessibility issues before the introduction of the scheme)."

But the LGA distanced itself from the report's findings.

In a statement, it said: "This recommendation is problematic as it could suggest an end to the current national concession, which is a popular policy that benefits millions of people and is highly valued by councils and their communities.

"Means testing for concessionary fares is not the solution. Take up of the scheme would fall drastically, the benefits it delivers greatly reduced and administrative burdens significantly increased."

The report came a day after an independent advisory group urged the Welsh Assembly Government to scrap free bus travel for all pensioners in Wales.

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