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Mr. Ian Liddell-Grainger (Bridgwater) rose—

Ms Keeble: I should like to finish this point about rural buses. We recognise that people in rural areas do not just want to go short distances. That is why we are looking at

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a fuel duty rebate for coaches in return for some concessionary fares. That will be an important step and will meet particular needs.

The hon. Member for Epsom and Ewell has raised his concerns a number of times. I have heard the exposition at least twice. His particular concern is that because his constituency is just over the border of London, people feel more strongly about not getting the free bus pass. Local authorities need to look at close working across local government boundaries. That is an issue right across the country. Local authorities have the discretion to make extra provision, as the authorities in London did, for the fact that people in their area may want to travel longer distances or go into London.

The hon. Gentleman mentioned schoolchildren. There is support for children in particular circumstances, depending on how far away from school they live and how old they are.

Mr. Clifton-Brown: The Minister seems to be dismissing the arguments of Conservative Members as trivial. The Local Government Association briefing says:

As my hon. Friends are urging me to consider dividing the House on this matter, can the Minister assure us that if she does not accept the amendment, she will at least continue to investigate the problem to see whether there are any mechanisms for every local authority to be reimbursed for the actual costs that they incur?

Ms Keeble: I am not dismissing the concerns that are raised. I recognise that concessionary fares are extremely important to the public and that the issue of finance is of great concern to local authorities. I am simply pointing out that some of the issues raised by Conservative Members are about non-metropolitan, rural areas and that other support is being provided for people in those areas. The concessionary fare scheme is not the last word as regards what we are doing to support bus travel. We are considering the organisation of the financing. There has been careful discussion in the local government associations—the proper way to do it—and what started out as wide variations have narrowed to quite a small sum. I am sure that those discussions will continue. By the time that the scheme comes into operation in April 2003, I am sure that local councils will feel satisfied that they are being properly reimbursed.

2.30 pm

The local authorities mentioned by Opposition Members did not raise their concerns with the Department. If those authorities provide the information, I will ensure that officials take a careful look at it.

Chris Grayling: I am sorry but the Minister has already heard my explanation two or three times. I can assure her that she and her colleagues will hear it many more times in the House and other places. She has made various references to different impacts on different

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authorities, but is she saying that some authorities will end up paying part of the costs of the scheme out of their current budgets, rather than new budgets?

Ms Keeble: I am sorry if I have not been clear. On the way in which the funding mechanisms work, I have been saying that we have gone through the normal channels and procedures, if for no other reason than we do not want to delay the introduction of the scheme. We want it in place by 2003.

We have recognised the new burdens principle, which is that if a new burden is placed on local authorities it has to be met. That applies to the total cost of the scheme, which we estimate to be about £50 million. That will be the new burden to be imposed on local authorities as a result of the scheme. The issue is how that amount will be divided up among the local authorities. It is to be done on a per capita basis. Local authorities would receive funding according to the size of their population. I should have thought that that deals with the concerns about the relative funding for London and Surrey. Clearly, the local authorities are discussing exactly how the mechanism should work to ensure that it is as fair to them as possible. The authorities have to discuss that among themselves.

Referring back to what my right hon. Friend the Minister for Transport said, we would expect the pressures to be on the margins. The authorities that are most likely to experience those financial pressures are those that historically have had the most generous concessionary fare schemes. I do not want to go into all the detail again, as I shall sound like a gramophone record if I do.

Mr. Clifton-Brown: The Minister has been generous in giving way. She stated that the effects of the Bill will be felt only at the margins. If she genuinely believes that—the Opposition think that it will be a bit more than at the margins—she is implicitly admitting that the revenue cost is small, if it is a cost at all. Therefore, why will she not consider implementing the amendment?

Ms Keeble: Although I am not reading the words used by my right hon. Friend the Minister for Transport, the form of words that I am using is pretty much same when I say that the pressures will be felt at the margins. The formula for cutting up the cake between the local authorities—there are more than 300 of them in England, which is why it is a substantial undertaking—is down to the discussions with those authorities. It appears that those discussions have gone well and that the areas of conflict are now very small.

As the hon. Gentleman rightly said the amendment is a peg. It refers to a different Bill and a completely different provision. The ring-fencing process that concerns him is not in the amendment. Furthermore, it would result in major delays, which would mean that we would be unlikely to get the scheme up and running by 2003. The devolved Administrations have already got such schemes up and running, so we would be lagging far behind. I shall now move on, as we have discussed that issue several times and have more or less exhausted the arguments.

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At present, most Government grant to local authorities is paid by way of general grant. It is for local authorities to spend the money in the way that they consider appropriate, based on their judgment of local needs and circumstances and their overall financial priorities.

Mr. Chope: The Minister said that the grant is allocated to local authorities so that they can decide how to spend it. Concessionary travel comes into a different category, however, as the Government have decided, for their own political benefit, to announce a statutory scheme and impose legislation on local authorities. The Government have also announced the principle of burdens. Will the Minister explain how it can be fair to impose an additional burden of £250,000 on two small local authorities in Dorset, and to reimburse them with only £20,000?

Ms Keeble: I have said that we have recognised the new burdens principle. The extra funding is on that basis. The hon. Gentleman is arguing for a ring-fenced grant. In general, local authorities rightly say that they want more discretion as to how they spend their money. As the funding is part of general funding, local authorities are free to top up their schemes and to use part of their general grant to do so. There is no contradiction.

The hon. Gentleman is right to say that the Conservative party wants a special grant; it does not want the money to be part of the general grant. As I have said several times, if it were part of a special grant, further consultation would be required and the introduction of the scheme would be delayed until after 2003. We believe that local authorities should be responsible for their spending and taxation decisions and be accountable to their local communities for them.

We all recognise that reimbursing local authorities at the current cost of concessionary fares is expensive, but we none the less believe that the system is in balance, not least because we have received few complaints from authorities about it. I give this undertaking to the hon. Members for Cotswold and for Christchurch: if the information about the local authorities mentioned is provided, we will certainly consider it carefully.

In England alone, we reimburse local authorities to the tune of £490 million a year. This legislation will increase that amount by about £50 million. We are working with local authority associations to finalise the figures so that the local government settlement will cover in total the cost of the extension of the travel concession to men aged 60 to 65.

As my right hon. Friend the Minister for Transport explained at some length in Committee—including in a lengthy discussion of the new burdens principle—the basis for distributing the concessionary fares funding is in line with other transfers to local government of this size. We really do not think that there is a case for the separation of that element of the revenue support grant, especially in comparison with other aspects of expenditure. We do not think that element should be ring fenced by a special grant mechanism.

More generally, as I have said several times, we want to ensure that the system of distributing grant is as fair as possible. We are working to create a local government

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finance system that distributes grant fairly and effectively and which gives councils greater financial autonomy to help them better to meet the needs of their local communities. We shall be working with local government as a whole to build consensus as far as possible.

We have discussed funding at great length. I completely understand the concern of Opposition Members to ensure that their constituents receive the benefit of concessionary fares and also that their local authorities are properly reimbursed or compensated. We believe that the system is fair and efficient and that it will facilitate the orderly and expeditious introduction of this very, very important concession. I hope, therefore, that the hon. Member for Cotswold will withdraw his amendment so as not to delay the scheme; and that we can get the measure through and ensure that men aged between 60 and 65 receive the benefits of the Bill.

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