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First principles assessment Why Introduce Concessionary Fares? The main reason for introducing concessionary fares is to enable low income groups to have the sam e access to public transport as the rest of the population. As such conces si onary fares are seen as a key element in tackling the problem of social exclu si on. Conces si onary fares within the UK must be implement ed by law (Transport Act 2000) for the elderly and disabl ed . In addition conces si ons are frequently extend ed to other groups such as people under 18 years of age who are in full-time ed ucation. The introduction of these conces si onary fares has provid ed a large section of society with a realistic alternative to private transport. Any movement from private to public transport will help to decrease the congestion in focal areas, such as city centres, where it will also help to r ed uce the pollution being caus ed on the environment by gaseous emis si ons from exhausts and from noise pollution. Providing access to transport for those on low incomes will increase their opportunities to travel and allow them to access services and shops which previously were not available to them. Whilst this will have an intrin si c value in itself it will also provide very tangible ben efits in the form of access to cheaper goods, cheaper services, ed ucation and employment. Demand ImpactsConces si onary fares can help to increase the usage of public transport, mainly buses, by r ed ucing the generalis ed cost of public transport and so encouraging private transport users to change modes. Another important element to con si der is the generation of addition trips particularly by those whose access to public transport was previously limit ed due to financial reasons. The Demand for Public Transport book (2004) estimat ed a generation factor of between 1.5-2.2 for schemes that offer free travel suggesting that between 150-220% additional journeys are being m ade as a direct result of offering free travel. For schemes offering half fare travel the generation factor is between 1.5 & 2.2, whilst for schemes that offer a flat fare the factor is between 1.2 & 1.9. This suggests that conces si onary schemes are making transport more affordable for the groups it is targeting. A study by Balcombe et al (1998) inferr ed conces si onary fare elasticities of between 0.04 to 0.27, compar ed with full fare elasticities of between -0.27 and 1.03. This suggests that for many of the passengers travelling on conces si onary fares the trips they are making are either essential and/or that bus is the only mode of transport they can afford/access. Statistics however would appear to suggest that, among the elderly at least, affordability and access are becoming less of an issue. Between 1998 and 2000, 98% of pen si oners in Great Britain had some form of conces si onary fare available to them. The take up rate for such schemes was only 48%, a 12% fall from the 1989-1991 period when 60% of those schemes were ta ken up (CfIT, 2003). This reflects the upward trend in car use and driver licence holding that has been experienc ed among older people in recent years. Take up in areas was highest in London (81%) and lowest in rural areas (29%) where dependence on cars is higher and there are few bus services.
Level of Response Amongst the elderly, growth in conces si onary fare travel by bus is likely to see an increase from the first year they qualify. This will be a result of r ed uc ed income and savings and becoming more comfortable with public transport as their experience increases. However as they become older a r ed uction in mobility is likely to see travel tail off. Table 3 Concessionary Fares: Demand Impacts 2
Supply Impacts Adopting conces si onary fares may lead to an uptake in the usage of public transport however this increase is unlikely to lead to an increase in the current bus services and buses requirements to run the timetable. The majority of conces si onary journeys are underta ken during the off-peak (because of cost and the types of journeys underta ken by the elderly) and the majority of bus operators have plenty of spare capacity during this period to cater for any upturn in demand. If there was excess demand the choice of whether to increase the service is a deci si on for the bus operators, in the UK at least, to make. If such services would be profitable then it is likely the operator would introduce them. The operator might even tailor the bus type to suit the elderly by introducing low floor buses to make boarding and alighting easier Financing Requirements The cost of implementing conces si onary fares is difficult to estimate as is it likely to vary from location to location. It would be fair to say, however, that the initial set up costs would be low with little adverti si ng needed, and the production and distribution of passes quick and cheap. By far the biggest costs are those associated with running a conces si onary fares scheme, in particular the reimbursement of operators. This can be a contentious issue in some areas si nce without smart card' technology it can sometimes be difficult to agree upon how many concessionary trips have been undertaken and at what fare. The usual method is to derive a formula based upon passenger surveys, but the final settlement can still come down to some hard bargaining from both sides. If the concessionary fares system is a success then more frequent buses will be needed , however any such measures will , in the UK at least, only be implemented if they are self-financing. Elsewhere the bus operator may well have to increase the bus supply to meet any additional demand. They may also be forc ed to introduce suitable vehicles (e.g. low floor) to cater for the type of passenger who might generate the excess demand again adding to costs. Expected Impact on Key Policy Objectives The main objective of concessionary fares is to overcome social boundaries and provide equal opportunities to all. This allows people to access a wider range of goods and services and employment opportunities which might improve economic growth. A side effect of concessionary fares is to decrease the private transport usage in an area which in turn helps to reduce noise and exhaust pollution from having a fewer number of cars on the road. Table 5 Concessionary Fares: Expected Impacts
Expected Impact on Alleviation of Problems Concessionary fares could reduce car use in the area, and hence reduce congestion, unreliability, environmental impact and accidents. When considering the problem of social exclusion, the implementation of concessionary fares will assist by allowing those who are receiving the concession to be given a more equal chance of access via public transport. This will aid them in pursuing what they want, i.e. to get a job in a previously inaccessible area, or go shopping in different locations. Expected Winners and Losers Winners from concessionary fares would be those who qualify for the concession. Car owners may also benefit from reduced congestion and delays. Retailers and employers might also expect to benefit from an increase in shopping and a larger available workforce. Taxpayers lose out because they have to finance the concessionary schemes. Table 6 Concessionary Fares: Winners/Losers
Barriers to Implementation Legally there should be very few barriers following the enactment of the Transport Act 2000. The cost of implementation is very low and so not a major barrier, what does cause problems is agreeing upon the financial reimbursement of bus operators which can be a long drawn out process. Politically there is enormous pressure on local authorities to implement these schemes from local constituents. Within government however there may be problems about the level of finance such schemes require and whether such money can best be spent elsewhere. In terms of feasibility the process is easy to implement and operate Table 7 Concessionary Fares: Barriers to Implementation
Text edited at the Institute for Transport Studies,
University of Leeds, Leeds LS2 9JT
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