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A decision made (01/11/2007) regarding: P.145/2007 HIE Concessionary Fares - Comments of Minister of TTS.

Decision Reference: MD-T-2007-0097
Decision Summary Title :	DS P145/2007 HIE Concessionary Fares – Comments of Minister for TTS		Date of Decision Summary:	24 October 2007
Decision Summary Author:	Caroline Anderson – Director of Transport		Decision Summary: Public or Exempt? (State clauses from Code of Practice booklet)	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title :	WR Health Insurance Exemption Cards: Free Bus Travel P145/2007: Comments of the Minister for Transport and Technical Services		Date of Written Report:	24 October 2007
Written Report Author:	Caroline Anderson – Director of Transport		Written Report : Public or Exempt? (State clauses from Code of Practice booklet)	Public
Subject: P145/2007 HIE Concessionary Fares – Comments of Minister for TTS
Decision(s): The Minister approved the draft comments on P145/2007 and agree to them being presented to the States on 6 November 2007 for consideration when the proposition is debated on 20 November 2007.
Reason(s) for Decision: The Low Income Support Scheme will incorporate a financial component to cover transport costs and has been designed to centralise benefits under one Department. This will subsume the current requirement to subsidise low income families by allowing free bus travel funded by Transport and Technical Services.
Resource Implications: There will be less income foregone when HIE cardholders no longer have access to free bus travel but any savings that accrue will be used to offset the annual increase in the contract cost or for service improvements.
Action required: Arrange for the comments to be presented to the States through the Greffier of the States.
Signature:		Position:
Date Signed:		Date of Decision (If different from Date Signed):

P.145/2007 HIE Concessionary Fares - Comments of Minister of TTS.

TRANSPORT & TECHNICAL SERVICES

HEALTH INSURANCE EXEMPTION CARDS: FREE BUS TRAVEL P145/2007

COMMENTS OF MINISTER FOR TRANSPORT AND TECHNICAL SERVICES

Purpose of the Report

To seek the Minister’s approval to draft comments on the Report and Proposition lodged by the Health, Social Security and Housing Scrutiny Panel entitled Health Insurance Exemption cards: Free Bus Travel and Active Cards (P145/2007). The full Report and Proposition is attached at Appendix A for information.

Background

The Health, Social Security and Housing Scrutiny Panel have lodged a Report and Proposition asking the States the following:

(a) to agree that new arrangements should be put in place following the introduction of the new income support scheme to enable those persons who are currently holders of Health Insurance Exemption cards to continue to be able to access –

(i) free bus travel; and

(ii) free Active cards and free access to the fitness referral scheme;

(b) to request the Minister for Transport and Technical Services (in respect of (a)(i)) and the Minister for Education, Sport and Culture (in respect of (a)(ii)), in conjunction with the Ministers for Social Security and Health and Social Services, to bring forward proposals to ensure that appropriate arrangements are put in place to enable this provision of services at no cost to continue.

Officers from TTS had previously responded to questions from the Scrutiny Panel regarding the future of concessionary bus fares to HIE cardholders following the implementation of the Low Income Support Scheme (LIS). Some references are quoted in the R&P.

Discussion

TTS believe that concessionary bus fares for HIE cardholders was introduced in 1988, a similar time to the OAP fare concession, by the then Defence Committee. OAP concessions was put forward by Senator Dick Shenton and it is this department’s understanding that the HIE concession piggy backed on the OAP initiative. The firm understanding was that it was to provide free transport to the head of a low income household to facilitate work or looking for work. Nothing more has been uncovered to explain the background to this concession.

It is impossible to accurately assess the cost of this concession as a bus driver does not differentiate between an OAP or an HIE cardholder. However, what TTS does know is that there are currently 327 HIE passes issued out of a total of concessionary passes of 10,681. In 2003, it was estimated that about 9% of concessionary journeys were undertaken by HIE cardholders which in 2005/6 would equate to 41,077 journeys and £42,828 in fare income foregone. However, the 9% figure was an estimate only and is now four years out-of-date.

Comments

The LIS scheme has been formulated to bring together under one unified scheme all benefits which support people on a low income. Although the HIE concessionary pass scheme was not separately identified, it is a benefit designed and implemented to assist those on a low income to have access to bus travel. It was always TTS’s understanding that LIS would subsume this concession, especially as there is a specific transport component within the benefit.

The HIE classification will no longer exist when LIS is introduced in January 2008. For that, reason, the concessionary fare scheme as it exists today cannot continue. As a transitionary arrangement, TTS could request Connex to continue to honour those passes already issued for a specified time period.

If the Minister for Social Security decides that free bus travel for a specified group of people would be beneficial, TTS would have no problem setting up a scheme whereby passes could be issued to these people. However, the funding should be from Social Security and not from TTS.

The Report makes specific reference to job seekers and the potential financial burden on them of having to travel to interviews and to the Department of Social security. If a pass was issued, this would allow free/reduced fare travel for a specified period, whether that person was travelling for the purposes it was designed to support or not. A more direct and targeted approach would be for the Department for Social Security to issue bus tickets to claimants when they are attending interviews. A scheme of this kind could be developed but the funding should be from Social Security.

Social Security would have to identify those claimants who would fulfil the necessary criteria and it is unlikely that they would have a separate ID card (such as HIE cardholders do now). For this reason, it would be more bureaucratic to issue passes than the current scheme.

Given the above, the Minister is asked to consider the following as a draft comment for lodging:

The Low Income Support Scheme should consolidate all current benefits and this should include the concessionary bus fares currently offered to HIE cardholders. The issue is whether the Transport and Technical Services Department should be funding free travel for other departments. For example, one use of HIE passes has been to allow unemployed people to attend job interviews. This allows the pass holder to attend a job interview but, assuming attendance at any such interview, it also permits the holder to then utilise the same pass for free bus travel for the rest of its validity period. This deprives the bus network of revenue and may not, necessarily, be assisting an individual's job search.

The new measures for Income Support indicate that welfare benefits will include an amount for daily travel. In those circumstances, it seems to me that such monies should be being spent on public transport or alternative travel and not as benefit that is additional to a free pass that is being, effectively, subsidised by Transport and Technical Services.

I am entirely supportive of individuals who are recognised as needing help with travel accessing a pass or voucher system on the local bus service. However, I am in no position to assess individual needs or, indeed, entitlement to such a pass. If I am faced with receiving no income from the issue of a bus pass, the net effect is to undermine the viability of the bus service and reduce the opportunity to expend funds on improving and enhancing it, with more routes or additional services on existing routes. This is not a helpful approach, especially when travel components are being included in overall benefits for anyone on Income Support. If there is an issue that job-seekers require more financial support for transport than non-job-seekers, then that is a matter for the Minister for Social Security.

I am sympathetic to the fact that current holders of HIE concessionary passes will, at some given date, become ineligible for free travel. I am willing to propose that a transitional arrangement is implemented which will allow current HIE cardholders to continue to travel for a limited period.

Recommendation

The Minister is recommended to approve the draft comments on P145/2007 and agree to them being lodged on 6 November 2007 for consideration when the proposition is debated on 20 November 2007.

Reasons for Recommendation

The Low Income Support Scheme will incorporate a financial component to cover transport costs and has been designed to centralise benefits under one Department. This will subsume the current requirement to subsidise low income families by allowing free bus travel funded by Transport and Technical Services.

Resource Implications

There will be less income foregone when HIE cardholders no longer have access to free bus travel but any savings that accrue will be used to offset the annual increase in the contract cost or for service improvements.

Actions Required

Arrange for the comments to be lodged with the States Greffe.

Written by:	Caroline Anderson – Director of Transport
Approved by:	John Richardson – Chief Officer