Freedom Pass Funding Cut

James Brokenshire has attacked the Government for having already made up its mind to claw back £28 million of funding from London boroughs intended for the Freedom Pass, even though a consultation on the proposals still has nearly three weeks left to run. The impact of this U-turn could leave London councils like Bexley and Havering with an unplanned hole of £1 million in their budgets.

The Freedom Pass allows Londoners aged 60 and over to travel free on the capital's buses, trains, London Underground, trams, and the Docklands Light Railway. It costs around £240 million a year and is funded by a combination of central Government grant and council tax contributions from all London boroughs.

In 2008 the Government agreed to give a special grant to London of approximately £58 million a year for three years as part of the introduction of the national concessionary bus scheme in England. But on 4 November the Department for Transport said that it was re-opening the third year of the funding settlement (2010/11), and launched consultation proposals to reallocate £28.6 million of London's special grant to other parts of the country. The consultation period is supposed to end on 30 December.

The MP's criticisms were made following comments by John Denham MP, the Secretary of State for Communities and Local Government, during a House of Commons debate yesterday on local government finance. During the debate Mr Denham admitted that

"...we needed to make some changes to the distribution of [concessionary fares] funding, because as the system came in, we could see that some areas were gainers and some were losers. That was the right thing to do."
He added that: "Even if adjustments in the formula have been proposed for the future, that reallocation was the right thing to do."

Speaking during the debate James said:

"I listened carefully to what the Secretary of State said, and it struck me that he had a closed mind, that no consultation is really taking place and that the Government have decided that that funding will not now be put in place. Saying to councils at the last moment, "We promised you the money, it's not there, you've got to deal with that now", hardly makes it easy for them to ensure that they deliver the value for money and council tax freezes that we want. The Government are reneging on the deal at the last minute and placing councils in an extremely difficult situation."

Commenting afterwards, James added:

"It's now pretty clear that this is a ‘done deal'. The Department for Transport is going through the motions of a consultation but in reality Minister's minds are made up. The impact is that London will be stripped of £28 million next year and councils and council taxpayers are simply being left to pick up the pieces. Ministers are effectively penalising local residents for the failings of their own policy in other parts of the country."

- ENDS -

Notes to Editors:

The full text of the local government finance debate on 8 December 2009 can be found by following the link set out below:
http://www.publications.parliament.uk/pa/cm200910/cmhansrd/cm091208/debtext/91208-0016.htm

Details of the Department for Transport consultation document on the re-allocation of concessionary fares funding can be found by following the link set out below:
http://www.dft.gov.uk/consultations/open/specialgrantfunding/consultationdocument.pdf

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