06 February 2009
By Mark Smulian
Essex County Council is to bail out district councils that have lost money on the controversial concessionary bus fares scheme, which allows free travel on most buses in England by people who are aged over 60 or are disabled.
It is the first county to take this step, although the government has indicated that it intends to hand the schemes over to counties in the long term.
Under the scheme, councils have to reimburse bus operators for all free journeys made in their area, regardless of where the passengers live. This has left councils in popular areas, such as resorts and major retail areas, with heavy bills. Many are not covered by the £212m special grant the government divided between them in April, based on an estimate of their liabilities.
A council spokesman said Essex would use the wellbeing power to meet the excess costs of the scheme. County leader Lord Hanningfield said: 'With the burden of concessionary fares now unexpectedly and unfairly [falling] on local taxpayers, we have had to step in if other services are not to suffer.'
The Local Government Association said in a January briefing that 43% of councils faced costs in excess of their grant share. Among the greatest shortfalls were Brighton & Hove at £2m, Nottingham at £1.6m and Cambridge and Exeter, both £1.3m.
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