5. Statement by the Minister for Economy and Transport: Concessionary Travel

Part of the debate – in the Senedd at 4:45 pm on 8 October 2019.

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Photo of Ken Skates Ken Skates Labour 4:45, 8 October 2019

Can I just be clear, and thank Rhun ap Iorwerth for his questions, that local government is not making money from the concessionary fare scheme? In fact, local government is contributing towards it. The key is in ensuring that the 80-plus bus operators across Wales that currently get reimbursed for the concessionary scheme operate on business models that are sustainable for the future. And the problem that we've got right now is, because 47 per cent of journeys are related to the concessionary fare schemes, i.e. free and based on a reimbursement, there is insufficient growth in the fare box—people who are actually paying for their journeys. And that's what's leading to those tiny margins and a lack of sustainability within the market.

In turn, that's why we need to drive up the number of people who pay to use buses, and that's why we're looking at a broad vision of improving the attractiveness of travelling by bus. We're looking at fare systems that currently operate in different parts of the world, which I think are very interesting, in order to make bus travel more affordable to the individual, but to drive up patronage to such a degree so that bus services and bus companies are sustainable and raising enough from the fare box to survive.

I think Rhun ap Iorwerth is absolutely right: people treasure their bus passes and not a single person who has one now will be deprived of it by the end of the year. There still is plenty of time to apply for the concessionary fare pass, but I do accept that people do want to get that piece of work out of their lives as soon as they can and apply and get it done with. That led to, on 11 September, a huge amount of traffic to the website, and unfortunately, with the bandwidth that was applied to it, it suffered from failure. Over the following days, the bandwidth was increased substantially and further stress tests were undertaken. I'm pleased that there have been no issues since, and we've now seen around 210,000 applications on the website in a very, very short space of time—we're talking about just a small number of weeks—and that's why I'm confident that, by the end of the year, we will have been able to process all of those applications.

In terms of moving from the car to bus services and the risk of vice versa happening, people deciding not to pay for bus services and moving back into their cars, the problem that we have at the moment is that, even with free bus travel, for many people who are over 60 but are still in work, bus services are not attractive because they're not as reliable as something they would require in order to get to work on time, or because they don't serve them in the community that they live. The system is simply not operating correctly. That's why we're introducing the reforms through the buses Bill. And in time, we will be able to deliver a network that is far more integrated, where we can apply higher quality standards, where we can apply a fairer fare regime. And it's my belief that, as a result of that, with the investment in bus infrastructure and bus rapid transport and bus routes, we'll be able to entice far more people out of their cars and onto buses.

In terms of the cost of raising the eligibility, well, actually, the cost is going to be incurred if we don't raise the age of eligibility. We know at the moment that there are around about 750,000 passes in circulation. Based on the percentage increase in population over 60 between now and 2030, it would amount to, if we did nothing, an additional contribution of something in the order of £17.5 million potentially between Welsh Government and local authorities. Certainly, as a minimum, we would expect to see an increased cost of around £10.5 million, but that's also, in turn, based on the fact that only 420,000 of those 0.75 million passes are actually in active use. If everybody started using their passes more regularly, then the cost would balloon even more and the system, in turn, would become even less sustainable. And we do have finite resources. I would invite any Member in the Chamber to identify how we would secure an additional £17.5 million or more, per year, in order to maintain the scheme as it is, as people work longer and are more physically active for longer in their lives.

There is a cost to others in society if we don't make these changes. For example, we know that people aged 60 to 64 have a higher average income than people aged 35 or less. They also have lower levels of material deprivation. Now, I'm not trying to play off one group of people against another, but I do think it's important to recognise that younger people right now are struggling incredibly and, in some parts of Wales, 20 per cent of young people can't afford or can't get access to public transport even to get to a job interview. That is simply not right and the reforms that we are going to be making over the coming months will address that injustice.