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Scrutiny Committee 28 November 2006 Item 16 1 NO 16 CHRISTCHURCH BOROUGH COUNCIL/COUNCIL/ SCRUTINY COMMITTEE Page 1 SCRUTINY COMMITTEE 28 November 2006 THE CHRISTCHURCH BOROUGH COUNCIL

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Page 1: Scrutiny Committee 28 November 2006 Item 16 1 NO 16 CHRISTCHURCH BOROUGH COUNCIL/COUNCIL/ SCRUTINY COMMITTEE Page 1 SCRUTINY COMMITTEE 28 November 2006 THE CHRISTCHURCH BOROUGH COUNCIL

ITEM NO 16

CHRISTCHURCH BOROUGH COUNCIL/COUNCIL/ SCRUTINY COMMITTEE

Page 1

SCRUTINY COMMITTEE 28 November 2006

THE CHRISTCHURCH BOROUGH COUNCIL CONCESSIONARY TRAVEL SCHEME REPORT FROM THE CTI TASK AND FINISH GROUPS

1.0 PURPOSE OF REPORT

1.1 This report sets out the findings of the Concessionary Travel Investigation (CTI) Task and Finish Groups following a investigation into various aspects of the Concessionary Travel Scheme which was introduced in April 2006.

1.2 The investigation covered the setting of the budget for the scheme, the

implementation of the scheme by the bus companies and the level of payments which were generated.

1.3 The Task and Finish Groups also considered the internal and external controls

which were applied. Recommendations are made for modifications to the scheme.

1.4 The report was supported by the results of detailed investigations as follows: *Concessionary Journeys in 2005/2006 and 2006/2007 *Using the Revenue Displacement Method *Estimates using the DfT Tool Kits *Bus Routes and Usage *Fare Structures *Journeys by Bus Risk Analysis – Appendix 1 Legal Aspects* Terms of Reference of the Working Groups Appendix 2. Those indicated by an “*” contain details of fare, costs and passenger

numbers which could be commercially sensitive and are therefore not reproduced in this report but are included in a confidential version, which Members have received.

2.0 BACKGROUND

2.1 The ”Free” Travel Scheme was implemented on 1 April 2006 . The objective was to provide free travel on buses for the over sixties and for those who had some form of impairment. The scheme built on the experience of the half-fare concessionary travel scheme which had been in place since April 2003. An objective (but not a duty) of the scheme was that bus operators should be "no better/no worse off" as a result of participating in a concessionary fare scheme.

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2.2 The scheme has been very successful in that approaching 11,000 bus passes have been issued. The take-up is around 65% of those eligible and hence a quarter of the population of the borough has “ free” bus travel.

However, the reimbursement to the bus companies has already exceeded the budget estimates. Action was taken to reduce the payments from 1st October. The Council met with representatives of the bus companies on 3 October where they objected to the measures.

2.3 The Leader of the Council requested that the Scrutiny Committee should

investigate the setting of the budget and the reasons why the expenditure was exceeding forecasts. At its meeting on October 17 the committee considered evidence from officers and a written response from Wilts and Dorset to preliminary questions raised by the committee. The Committee was concerned that even with the measures taken there would be a significant overspend and requested that the Resources Committee considered whether payments to the bus companies should be reduced further from 1 December 2006 taking into account any justified claims from the companies for additional expenditure.

2.4 The Committee set up two working groups:- one to consider in more detail the

internal aspects of the scheme and the other to consider its implementation by the bus companies. This report presents the outcome of their investigations.

3.0 FINDINGS Features of the Half-fare Scheme 3.1 The statutory minimum scheme was to subsidise travel for the over 60s and

other eligible residents from 9.30 am on Monday to Fridays plus all day on Saturdays and Sundays. Concessionary travel would only extend to the boundary of the Borough. On production of a pass the eligible resident paid just half the fare (single or return). The Council paid the other half but an allowance was made so that the value of travel generated by the scheme was deducted.

3.2 The half-fare scheme introduced by the Council had no time restriction and

after extending the scheme to include travel to and from Bournemouth Hospital the agreed scheme was extended to include bus routes starting, terminating or passing through Christchurch to their point of termination beyond the borough boundary.

3.3 The allowance for the added journeys was set at 15% of those which were

made before the scheme started. Members sought to obtain the view of the bus companies on whether the no better off/no worse off objective had been met.

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The ‘Generation factor’ is normally defined as the number of additional journeys caused by the scheme divided by the number of journeys that would have taken place in the absence of a scheme

3.4 The current owners of Wilts & Dorset inherited the half fare scheme, which had been in operation for some time and had not evaluated the scheme. The Head of Revenues and Benefits confirmed that the Council had not received any claims for additional costs. In a survey report for the Council MCL Transport Consultants pointed out that the 15% generation factor was the lowest value that the Department of Transport expected to be applied. Higher values would apply where there were higher bus frequencies and higher car ownership.

3.5 Early findings of the Scrutiny investigation were that Council had been

charged for routes which were not valid and that one company had been overcharging by using an incorrect reimbursement factor.

Setting the Budget Requirement for Concessionary Travel 3.6 The budget requirements were presented to the Resources Committee in

August 2005. It consisted of three elements with an estimate provided for each element as follows: � Over sixties free bus pass: £366,750 � Travel Tokens: £17,500 � Passes for the blind: £5,000

The total estimate was £389.250. Later, the overall budget was increased to £413,000.

Over-Sixties Element 3.7 The Scrutiny Committee took the view that the evidence suggested that the

bus companies were not worse off as a result of participating in the half-fare scheme. In August 2005 the projected reimbursement to the bus companies for the half price scheme was £140,000. Using a factor of 2.7 (since the generation factor was 15%) this represents a total revenue of £378,000 if there had been no concessionary scheme. On this basis if the Council paid this amount for the same number of journeys under the free scheme the companies would be no worse off.

Using a different approach the Management Board proposed a budget of £366,750 which is comparable.

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Comparison with Other Authorities 3.8 Estimated net costs for Hampshire authorities (advised by MCL Transport

Consultants) are set out below. It can be seen that a factor of around 3.1 has been applied which is consistent with the authority schemes being based on a generation factor of 21.5% for the half-fare scheme.

AUTHORITY CURRENT SCHEME £

FREE TRAVEL SCHEME £

Basingstoke and Deane

131,401 394,907

Eastleigh 157,631 471,872 Gosport 126,223 379,845

Department for Transport Guidance 3.9 The Council’s estimates were made in August 2005 and the guidance was not

published until November of that year. Using the Revenue Displacement method resulted in an estimate of £353,000. However the method does rely on fairly accurate estimates of the number of journeys and the Council has not had this information from the bus companies for the half-fare scheme.

Nevertheless the budget estimate is in the same region. Estimates using the four tool kits generally supported a figure between £358,000 and £395,000

Additional Costs 3.10 The DfT suggested that: Additional costs to operators might reasonably include:

� the cost of running extra journeys net of new fares revenue from paying passengers attracted by the additional travel opportunities (if any);

� replacing smaller buses with larger buses (capital and operating costs); � slower running times (although experience in areas that have recently

introduced free travel suggests that this is seldom a problem where there are no longer cash payments being made and where pass checking/ticket issuing arrangements are simple);

� additional passenger claims. The best approach to this would be to identify the current cost of claims per thousand passenger journeys (or even better claims by concessionary passengers per thousand concessionary journeys) and assume that extra travel generated by the scheme gives rise to the same level of claims as the existing journeys;

� additional publicity costs. Passengers newly able to travel free are likely to want plenty of support from operators' information channels. If

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operators meet some costs of Traveline, it may be reasonable to assume that growth in call demand around 1 April 2006 is attributable to the free travel scheme and therefore recoverable as an extra cost;

� set up costs associated with the new scheme.

No additional costs were budgeted for but the generated travel factor in the scheme was set to allow for these.

Other eligible residents

3.11 The blind passes provided for the pass holder plus a companion so although in the region of 100 passes were in circulation, it potentially could have been for up to 200 users The value of the blind passes was estimated at £50 per pass because there was unlimited free travel under the old scheme. Reimbursement for journeys made by these pass holders are now included in the overall scheme.

Tokens

3.12 The cost of tokens is not within this review but it is noted that £17,500 is within the budget estimates.

Government Grants

3.13 Grant calculations are based on formulae related to Needs and Resources and there are only 2 services for which the grant is specific to services i.e. Flood Defence and Coast Protection.

3.14 It is not therefore possible to determine an amount for any other service, including Concessionary Travel.

3.15 However, when calculating the grant for 2006/7 the Government makes adjustments for new services/ changed responsibilities and then measures grant changes (in percentage terms) against the amended base. The base for 2006/7 was increased (over 2005/6) by £237,000 for Concessionary Travel.

3.16 The Council’s 2005/6 original budget for "Fare Concessions/Tokens" was £143,000. The revised estimate was £155,000. Using the higher of the 2 figures and adding £237,000 gives a total of £392,000. The amount included in the 2006/7 budget was £413,000.

However, the amount included in any budget is the "best estimate" that can be made of the likely expenditure and not related to the overall grant.

Details of the Free Travel Scheme 3.17 The scope of the scheme is defined clearly as follows:

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3.18 “The Scheme will apply to the Borough of Christchurch, and where necessary to give effect to the travel concession provided shall be deemed to extend to a point of termination and return outside of the Borough. For the avoidance of doubt “the point of termination and return” shall refer to the destination point of any journey not involving a change of vehicle, or where a journey would involve a change of vehicle, the point at which a change of vehicle would be required.”

3.19 To calculate the net revenue forgone the Council will use data from Bus Pass

acceptance. The Operators will record each time a Bus Pass is used. Operators of eligible services will provide, on a monthly basis, information by service of the number of journeys made by Bus Pass holders and the average adult single fare paid by fare paying passengers on each eligible service during the month. For each service, the product of the average adult single fare and number of journeys made will represent the gross revenue foregone. The resulting gross revenue foregone will be adjusted to take account of generated travel in respect of the concession.

3.20 Initially the generated travel was set at 20% (generation factor). This level was

set after brief consultation with the bus companies. There was pressure to finalise the scheme by 1 December 2005 and without the benefit of DfT guidance which was not provided till late November.

3.21 After reviewing the scheme the Council changed the generation factor from

1st October to 49.2% which brought it in line with the Bournemouth and Poole Connect scheme. A further change will be introduced from 1st December to restrict the scheme to off-peak travel (after 9.30 am) on Monday - Friday

Eligible residents were defined as :

(a)persons who are aged sixty years or over and resident within the Borough;

(b)persons who are blind;

(c)persons who are partially sighted;

(d)persons who are deaf;

(e)persons who are without speech;

(f) persons who have a disability or have suffered an injury which has a substantial and long-term adverse effect on their ability to walk;

(g)persons who have a learning disability, that is a state of arrested or incomplete development of mind which includes significant impairment of intelligence and social functioning;

(h) persons who, if they applied for the grant of a licence to drive a motor car, would have their applications refused on medical

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(i) grounds otherwise than on the ground of persistent misuse of drugs or alcohol; and

(j) any person travelling as the companion of a person who is eligible to receive travel concessions because they satisfy any of the above criteria and requires the assistance of a companion so that they can travel on journeys on public transport

(k) grounds otherwise than on the ground of persistent misuse of drugs or alcohol; and

(l) any person travelling as the companion of a person who is eligible to receive travel concessions because they satisfy any of the above criteria and requires the assistance of a companion so that they can travel on journeys on public transport

Implementation of the Scheme General 3.22 A risk analysis was carried out to identify where there was a risk of

expenditure exceeding the budget estimate. On the basis of this a series of questions were put to the bus companies. Wilts and Dorset responded in writing but Yellow buses would only go as far as saying that “Bus operators have similar issues to each other and I would presume that the response by other operators, who choose to attend the meeting, will be broadly similar in content to any response I may have given”. This section relies strongly on the responses to the questions and the further investigations of the working group.

Issuance of Passes 3.23 Each applicant had to submit an application form with proofs of identity and

eligibility. The total number of eligible residents was estimated as 16,300 Distinctive passes were issued which incorporated a photograph of the holder. 160 are in respect of those disabled persons (presumably under 60 years of age) that currently had a pass under the 2005/2006 scheme; these passes are distinctive to indicate that the holder could be accompanied by a person who also would travel free of charge.

3.24 The passes were issued over a period and the cumulative monthly total for the

passes issues at the start of each month is shown below. This shows the increasing take-up as the months have gone by. At the beginning of November 10,680 have been issued which is a take up of 65%. Passes are being issued at the rate of around 40 per week.

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3.25 Each pass was numbered and had a photograph of the holder. Members

considered that it would not be difficult to forge a pass; however the gains in doing so and using it would not be high. Loss of a pass and it being used by another was possible since there was no way of taking a pass out of the system, this would be possible if the pass contained a chip and a swipe system were to be used on the buses.

Overall members considered that pass fraud was unlikely to be significant. Validity of Routes 3.26 Several routes were wrongly booked to Christchurch Borough Council and

this has been drawn to the attention of the bus companies and refunds have been arranged.

3.27 Members considered there had been insufficient control procedures within the

bus company and within the Council. Controls on Recording Journeys

3.28 Under the half fare scheme, passengers paid half the appropriate adult fare on the bus and a proportion of the other half of the fare was claimed from the Borough. Drivers issued a ticket recording the fare and the identity of the concessionary authority. These ticket sales were then recorded by the electronic ticket machine, downloaded by the driver’s module to the company’s revenue system and the appropriate invoice generated.

3.29 Recording for the current scheme is different as no money changes hands

during the transaction of the passenger boarding the bus. When a passenger presents their pass, the driver records the pass on the ticket machine by calling up the concessionary pass screen on his/her ticket machine. This screen includes the various concessionary schemes in which Wilts & Dorset participates and the driver records the identity of the pass holder accordingly. Wilts and Dorset opted, along with Yellow Buses, not to issue zero value tickets to pass holders as to so do would increase boarding times. This in turn would slow services up, thereby increasing costs and acting as a disincentive to bus travel. They avoided asking passengers to state their destination as they considered that they would overstate the journey length made, and also create further delays. They also felt that issuing tickets was counterintuitive to a free travel scheme.

3.30 Wilts & Dorset participates in seven concessionary fares schemes across its area. Each authority’s pass is of a different design and the drivers are able to recognise passes from different schemes. Each driver is trained on the use of ticket machines and ticket information as part of their basic training. Each driver is issued with a colour illustrated guide showing different types of

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concessionary pass. Members questioned whether colour-blindness could be an issue.

3.31 Each driver’s performance is assessed regularly by his manager and the

company undertakes regular ticket checks on buses to ensure all passengers have a valid ticket and that the correct type of passes are being recorded. On the rare occasions when this is found not to be the case, drivers are subject to disciplinary action.

3.32 The Council has not conducted an independent survey of the working of this

scheme. However, a survey was made of the half-fare scheme by MCL Transport Consultants in 2003. They found that there was booking of journeys to the wrong authority but the incidence was quite low.

3.33 Members noted that the process had been largely determined by the wishes of

the bus companies and that the Council had not appeared to have any input. The Council had not carried out any independent survey of the bus companies’ operations and so relied totally on the bus companies.

3.34 Members considered that driver fraud in allowing passengers to travel without

a pass or ticket was possible but that booking of those journeys as free passes was unlikely.

The Average Fare

3.35 The bus companies submit invoices which detail the number of journeys recorded for each route. Yellow buses charge on the basis of an average single Adult fare which is applied to all routes. This is considered to be reasonable as there is a high degree of commonality between the routes. Wilts and Dorset have a different charge for each route which given the diversity of the routes is considered to be reasonable. This practice accords with the specification in the scheme. However it results in the Council paying more than if long-term promotional fares were to be taken into account, Details are discussed in Appendix 7. Whilst the principles are understood more information is required from the bus companies before supported conclusions can be drawn.

Reimbursement 3.36 Charging is based on the rate of 83.3% of the average adult single fare for the

period on the services concerned. Each journey is therefore charged at a flat rate in the period. This rate applies to both companies but the way in which they present the information is different. Wilts and Dorset make the adjustment by adjusting the fare on the returns for each route whereas Yellow Buses apply the allowance to the total charge for all routes.

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From 1 October the generation factor was increased by the Council to 49.2%; this results in a reimbursement of 67%.

Transition from Half Fare Scheme to Free Travel Scheme 3.37 There were some variations in the returns for the half-fare scheme but the

level was substantially constant. With the introduction of the free travel scheme from the 1st April there is a step increase which can only be due to the scheme coming into force. The level is seen to increase with each monthly return.

Journeys 3.38 It is estimated that the average number of journeys per year per pass

increased from about 60 to 90 when the free fare scheme was introduced. Passes are still being issued at the rate of around 40/week. It is expected that the number of journeys will increase in the run-up to Christmas and bad weather will reduce the journeys.

Reimbursement 3.39 The returns up to the end of September are based on the generation factor of

20% and a generation factor of 49.2% from the 1st October. The plots suggests that the budget level could be exceeded by a significant extent even with the measure that has been taken. No attempt has been made to predict the effect of restricting travel to off-peak.

Further Changes to the Scheme 3.40 If trends continue then every month that goes by adds a significant amount to

the concessionary travel expenditure. The Council can change the scheme at 28 days notice. The most direct way of doing this would be to cap the payments. The advice from the Borough Solicitor is that capping would not be consistent with the scheme. A less radical measure would be to increase the generation factor in the scheme to 900% which would reduce payments by 90% by introducing a reimbursement factor of 0.1.

Internal Control 3.41 The proposed budget was reported to and approved by the Resources

Committee in 2005. A key area of concern was that given the high proportion of over sixties resident in Christchurch that government funding would be inadequate.

3.42 The value of the generation factor was set by officers without reference back

to Members. Given the pressure to meet a deadline and the lack of DfT guidance this is understandable and was not crucial since the scheme

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permitted updating should the need arise. There was the opportunity to vary the scheme before 1 April 2006; however this opportunity was not taken. Reduced capacity due to illness may have had an influence. Neighbouring authorities did not set the factor for their schemes until later and the Connect Scheme was set at 49.2%.

3.43 In setting the value of the generation factor officers may have been influenced

unduly by the bus companies who expressed concern that they would be worse off.

3.44 With the benefit of hindsight the high take up of passes beyond the estimated

level and the high expenditure from the first month of the scheme should have resulted in a formal review. Those closely involved could well have thought that the novelty would wear off and monthly expenditure would fall. However, the continuing high levels in the subsequent months could have been a trigger.

3.45 A change in the reporting cycle meant that revenue expenditure was not

formally reviewed until the end of August. At this stage action was proposed but the need for giving 28 days notice prevented the increase in generation rate being implemented before October 1st. The increase in generation factor to 49.2% was driven by a wish to align with the Connect scheme in Bournemouth and Poole which the bus companies had accepted. Members of the Resources Committee were made aware that the officer’s best estimate of the expenditure was close to £800,000 compared with a budget of £400,000. Again with the benefit of hindsight the generation factor could have been increased further. Some members were more concerned about honouring the perceived commitment to the 20% generation factor than lowering the reimbursements, upsetting the bus companies and having to go to appeal.

3.46 During August an informal Scrutiny investigation was started which was

formalised at the meeting of Resources Committee on 27 September when the Leader requested that an investigation be initiated. At that meeting the Committee agreed to reduce the scheme by limiting it to off-peak travel.

3.47 On 3 October Council representatives met with those of the bus companies.

The companies objected to the reduction in reimbursement from 1 October which was being imposed and commented on the restriction to off-peak travel.

3.48 The Scrutiny Committee met on 17 October and received a presentation from

the Management Board and the answers to prepared questions from The Head of Revenues and Benefits and Wilts and Dorset. The Committee was concerned that even with the measures taken there would be a significant overspend and requested that the Resources Committee consider whether payments to the bus companies should be reduced further from 1 December 2006 taking into account any justified claims from the companies for additional expenditure. This was confirmed by the Chairman of Scrutiny to the Leader,

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Chairman of Resources C. Ex, and DoR on 25 October following the results from this investigation.

Establishing the 2007/2008 Scheme 3.49 The DfT should be issuing new guidance later this year so it is not appropriate

to make an assessment at this time. However pass numbers will rise as projections of the number of over-sixties suggest changes of 600 in 2006 to 2008: 1000 in 2006/2009 and 1100 in 2006 to 2010. It is noted that the Council will be employing consultants to advise on the 2007/2008 scheme and this is welcomed.

If the wishes of the bus companies are to be taken into account it will be based on a price per passenger journey.

4.0 IMPLICATIONS

Corporate Plan 4.1 This review accords with the role of the Scrutiny Committee set out in the

Constitution.

Legal 4.2 Under the scheme the Council has the right to vary the terms and conditions at

any time. Not less than 28 days notice of any variation is required. In setting up the scheme the bus companies would have been expected to have greater expertise than the Council. The companies may appeal to the Secretary of State if they object to variations to the Council’s scheme.

Environmental

4.3 There are none.

Financial 4.4 Significant levels of expenditure above the budget estimates are predicted. Equalities 4.5 There are none

5.0 CONCLUSION

5.1 The Task and Finish Groups have come to the following conclusions as the result of their findings:

� Early findings of the Scrutiny investigation of the half-fare scheme were

that Council had been charged for routes which were not valid and that one company had been overcharging by using an incorrect reimbursement factor.

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� The bus companies were unable or unwilling to demonstrate that they were any worse off because of the introduction of the schemes. They made no claims for additional payments on the half-fare scheme nor the free scheme.

� From this Group’s investigations It is reasonable to conclude that the

bus companies were no worse off as a result of the half-fare scheme.

� The estimated budget for 2006/2007 was set at a fair level.

� The 65% uptake by those eligible and use of passes has been higher than predicted.

� About a quarter of the population of the borough have passes for free

bus travel � The number of journeys appears to average at around 6.6/month per

pass holder. � The reason for the high usage can be explained subjectively as largely

being due to shopping. Increased usage can be expected in the run-up to Christmas and the January sales but adverse weather will be a factor.

� The initial generation factor specified at the introduction of the scheme

has resulted in an excessive level of reimbursement. The bus companies had a significant influence on the level set and on details of the implementation of the scheme.

� Guidance from DfT was placed on its web-site but notification to the

Local Authority was not provided other than through a press release. This is considered to be unsatisfactory.

� The scheme allows for changes to be made to the scheme during the

year to reduce the level of reimbursement at 28 days notice.

� The Council was slow to respond to the high level of billing. The system of internal control could have been better.

� Action was taken to reduce the level of payments from 1 October.

Whilst this measure will reduce the overspend the current usage is likely to continue and there is a risk of a significant overspend.

� The overspend will be reduced by restricting the use of the pass to off-

peak travel but without more information this must be assumed to have little effect.

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� A further reduction in payments is necessary as soon as possible to reduce the overspend either by capping at the earliest opportunity or specifying a very high generation factor to limit reimbursement.

� The bus companies’ controls seem reasonable although some small

errors through cross-bookings by drivers are inevitable. The Council has not carried out a survey of the operations.

� The Council was charged for invalid routes and this has been corrected.

� The Groups have had no co-operation from the Yellow Buses and this

is regretable.

� The use of consultants to advise on the setting up the 2007/2008 scheme is welcomed.

6.0 RECOMMENDATION

� A further reduction in payments to limit expenditure should be implemented as soon after 1st December as possible.

� The Council should initiate independent surveys of the bus companies

operations during the implementation of the 2007/2008 scheme.

� The Council should review its internal controls for dealing with the introduction of schemes such as the Concessionary Travel Scheme (or major changes to them).

� The Concessionary Travel Scheme should be audited by the Internal

Auditors.

CONTACT OFFICER:- ACKNOWLEDGEMENTS

Members are grateful to Kelvin White, Paul Attwater, Barbara Boot and Glynis Kelleher for their comments, advice and support. CONTACT OFFICER:- Mrs G Kelleher, Democratic Services Officer, (Telephone 01202 495141, E-mail: [email protected])

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References Concessionary Scheme - Statutory Changes Resources Committee Item 7, 31 August 2005 Concessionary Travel Scheme Resources Committee, Exempt Item 15, 30 August 2006 Concessionary Travel Scheme, Resources Committee Item 5, 27 September 2006. Concessionary Travel Scheme 2006/2007 - Budget Overspend Scrutiny Committee Item 13 17 October 2006 Travel Concession Scheme 2006 (as varied) CBC dated 2 October 2006. Concessionary fares for older and disabled people: Local Authority Guidance DfT 22 November 2005. Minute 334, Council and Committee Minutes 2006/2007, Volume 4. Minute 299, Council and Committee Minutes 2006/2007, Volume 4. The State of Christchurch Concessionary Travel Analysis Final Report from MCL Transport Consultants February 2004.

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APPENDIX 1

FREE BUS PASSES - RISK ANALYSIS OUTLAY EXCEEDS BUDGET I I I------- AVERAGE FARE INCORRECT I I------- TOTAL INCORRECT I I------- JOURNEYS INCORRECT I I------- NO OF CHRISTCHURCH USERS INCORRECT I I------- DRIVER ERROR I I I------- DRIVER RECORDS TOO MANY I I I------- DRIVER PRESSES WRONG BUTTON I I I------- CARDS TOO ALIKE I I I I------- COMPANY ERROR I I I------ DRIVER ERROR I I I-------- ROUTE INVALID I I------- DRIVER FRAUD I I I I------- BUS PASS FRAUD I I------ OWNER NOT 60 + I I------ FORGERY I I I I------- USER NOT PASS-HOLDER I I------- PASS TRANSFERRED BY OWNER I I------- THEFT I I------- LOSS I I------- DRIVER ERROR I I------- FORMULA FAVOURS COMPANY I I-------- GENERATION FACTOR GENEROUS I I-------- GENERATION FACTOR NOT UPDATED I I-------- AVERAGE FARE CALCULATION FAVOURS I COMPANY I I------- EX-SEASON TICKETS HOLDERS JOIN THE SCHEME I I------- USE BY OVER-60 ELIGIBLE GROUPS HAS BEEN

UNDERESTIMATED I I------- USE BY OTHER ELIGIBLE GROUPS HAS BEEN

UNDERESTIMATED

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The ‘Generation factor’ is normally defined as the number of additional journeys caused by the scheme divided by the number of journeys that would have taken place in the absence of a scheme. ASSESSMENT

CAUSE RISK PROB RISK OWNER

1.0. AVERAGE FARE INCORRECT 1.1 TOTAL INCORRECT 1.2 JOURNEYS INCORRECT

1 1 1

1 1 1

BC BC BC

2.0 NO OF CHRISTCHURCH USERS INCORRECT 2.1 DRIVER ERROR 2.2.1 DRIVER RECORDS TOO MANY 2.2.2 DRIVER PRESSES WRONG BUTTON 2,2,2,1 CARDS TOO ALIKE 2.2.2.2.1 COMPANY ERROR 2.2.2.2 DRIVER ERROR 2.2.2.2.1. ROUTE INVALID 2.2 DRIVER FRAUD 2.3 BUS PASS FRAUD 2.3.1 OWNER NOT 60+ RESIDENT 2.3.2 FORGERY 2.3.3 USER NOT PASS-HOLDER 2.3.3.1 PASS TRANSFERRED BY OWNER 2.3.3.2 THEFT 2.3.3.3 LOSS 2.3.3.4 DRIVER ERROR

2 1 1 1 1 1 1 1 1 1 1 1 1 1 1

2 1 2 2 1 2 2 1 1 1 1 2 1 2 2

BC D D BC BC D D/BC/CBC D CBC D D HOLDER HOLDER HOLDER D

3.0 FORMULA FAVOURS COMPANY 3.1 GENERATION FACTOR GENEROUS 3.2 GENERATION FACTOR NOT UPDATED 3,3 AVERAGE FARE CALCULATION FAVOURS COMPANY

3 3 3 3

3 3 2 3

CBC CBC CBC CBC

4.0 EX-SEASON TICKET HOLDERS JOIN THE SCHEME

3 2 CBC

5.0 USE BY OVER SIXTY ELIGIBLE GROUPS HAS BEEN UNDERESTIMATED

3 3 CBC

6. USE BY OTHER ELIGIBLE GROUPS HAS BEEN UNDER-ESTIMATED

3 3 CBC

CBC: Christchurch Borough Council BC: Bus Companies D: Driver Probability: 1 - likely; 2 - very likely; 3 - extremely likely. Risk: 1 - £1000 2 - £10,000 3 - £100,000

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APPENDIX 2

CONCESSIONARY TRAVEL INVESTIGATION (CTI)

WORKING GROUPS

EXTERNAL (CTIE) - Cllrs Flagg, Mawbey, Mrs Payne and Vick TOR To investigate the implementation of the scheme by the bus companies and factors influencing their billing of the Council. Tasks 1. To review the method used by the bus companies to record journeys made using

the Christchurch Borough Council Bus Pass and identify any issues which could lead to recording errors

2. To review the MCL Survey carried out in 2003 and consider any implications for

the current scheme. 3. Identify valid bus routes and ensure that all routes for which the Council is billed

are valid. 4. Consider possible reasons for the increase in the number of journeys. 5. Compare the fare structures before and after the implementation of the free

scheme including concessions and season tickets. 6. Compare the timetables for relevant routes and establish whether additional

services have been established in the latest timetables. 7. Consider projected estimates of residents qualifying for a bus in future years 8*. Consider whether the Council would be better off if it was billed per journey for an

equivalent average fare which took into account single and return fares rather than an average adult single fare.

9. Seek to establish how many pass holders had season tickets before the Introduction of the current scheme.

* has high priority since if there is an advantage the scheme could be amended in December and savings made this year.

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INTERNAL (CTII) - Cllrs Campbell, Jones, Mawbey and Mrs Spittle. TORs To review the process by which the budget and concessionary travel scheme was set up and propose any necessary action to improve it in the light of experience. Tasks 1. Review the estimates used by CBC to derive the budget for concessionary travel. 2. Review the reasons why the demand was higher than predicted and arrive at a reasoned estimate for “elasticity” 3. Establish what demand and reimbursement would have been predicted using the DfT toolkit using data available in the Autumn of 2005 4. Use the DfT toolkit to analyse the current and projected trends 5. Establish and justify a reasonable reimbursement level for 2006/2007 6. Establish the legal position regarding amending the current scheme and the no better off nor worse off principle. 7. Consider the in-house management at officer and member level to establish whether there are any lessons to be learned.