Government under-estimated cost of concessionary fares by 117 per cent

January 28, 2009 2:44 PM

Cambridge MP David Howarth has launched a scathing attack on the government over the concessionary bus fares scheme accusing it of under-estimating the cost by a massive 117 per cent.

He told a Commons' debate on Monday that the government had got its predictions "immensely wrong".

Its error left has left Cambridge City Council with a £1 million deficit in its budget to meet the £1.5 million cost of the scheme, he said.

"That £1 million will not sound like much to the Minister, who is used to dealing in billions, but it is devastating to a small district council," he said during the debate.

"The government grant to Cambridge for the scheme assumed that the increase would be only 60 per cent," said Mr Howarth. "The department described that grant as 'generous', but a better description would be 'wholly inadequate'.

"It represents 15 per cent of the money that the council raises in council tax in a year, but it cannot be recouped using council tax receipts, because it would put the council many times over the government's capping limit. On the spending side, it represents the loss of some 30 jobs, and the situation in other places is even worse."

He added that Cambridge City Council is facing financial difficulties this year but by far its biggest problem is of the Government's making.

He said the government had responded by claiming there was enough money in the grant overall, but even if that were true, it was about the distribution of cash among councils.

And he added that the government had said the present scheme might only last three years and then responsibility for concessionary fares would be transferred to the county councils.

That might help to prevent Cambridge taxpayers paying for bus journeys that start in the city and cross rural boundaries but would not help the cost of tourists' travel, he said.

"My constituents certainly are furious, and they are not convinced by the government's argument that there might be a solution in two or three years' time," he added. "That does not deal with the massive financial crisis in council budgets now."

In response Paul Clark, Under-Secretary of State for Transport said he was "proud of the Government's record on concessionary travel."

He said the funding "was distributed using a formula that reflects areas of likely demand, whether they are shopping destinations or tourist areas such as coastal towns."

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