Ninth Standing Committee on Delegated Legislation
Thursday 13 May 1999
[Mrs. Gwyneth Dunwoody in the Chair]
Local Government Finance (England) Special Grant Report (No. 47) on Rural Bus Subsidy Grants for 1999-2000 (HC 407)
4.32 pm
The Chairman: Before the Committee begins, I should make it clear that if there is a second Division in the House, I shall suspend the Committee.
The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Ms Glenda Jackson): I beg to move,
That the Committee has considered the Local Government Finance (England) Special Grant Report (No. 47) on Rural Bus Subsidy Grants for 1999-2000 (HC 407).
It is a pleasure to be serving under your chairmanship, Mrs. Dunwoody, after what seems an unnecessarily long time.
The special grant to which report No. 47 refers is for rural bus services. It is part of the Government's positive action to support rural communities and, in particular, to improve their mobility and ensure more travel choice. Some £50 million a year of new money for the support of such services was announced by my right hon. Friend the Chancellor in his 1998 Budget—[Interruption.]
The Chairman: Order.
Mr. Andy King (Rugby and Kenilworth): I apologise, Mrs. Dunwoody. I was trying to clarify something.
The Chairman: Perhaps the hon. Gentleman would resume his seat while he carries out this interesting clarification. The Minister is on her feet introducing the order.
Ms Glenda Jackson: This is the second year of the new grant.
It is well known that in rural areas, car ownership is higher than in the towns. That can only make transport more difficult for the minority who do not have a car. People without ready access to a car find their lives and choices restricted: access to jobs, shops, schools, entertainment and hospitals can be more difficult, but public transport can address those difficulties.
Local bus services have a crucial role to play in offering transport choice. They can provide lifelines by offering a flexible and adaptable way of meeting rural needs, but buses may need revenue support from local authorities. That is why the £50 million a year is so important. It shows our commitment to helping rural communities flourish and protects the environment by providing an alternative to the private car. It also shows our commitment to local government. The grant is distributed to local authorities in proportion to their rural population and I pay tribute to the hard work that they have done in letting bus subsidy contracts.
The £50 million is an annual total for the whole of the United Kingdom. It is divided between the four nations by the Barnett formula. The English share is £41.7 million. Of that, £32.5 million is being distributed to local authorities as set out in this report. It will be used to support new or improved rural bus services.
We have also set aside separate funding for the rural bus challenge competition. The results of the first competition were announced in December last year. Following a further allocation in this year's Budget, funding for the next two challenges will be increased to at least £15 million a year. The remaining £4.2 million a year has been devoted to community-based initiatives and is being administered by the new Countryside Agency. It will build on the success of existing schemes and facilitate better co-ordination of voluntary, local authority and commercial services.
We attach considerable importance to monitoring the impact and effectiveness of the new money. Returns from 55 of the 71 authorities revealed that more than 550 totally new services and 740 enhanced or improved services were in operation as a result of the first year's funding. I am sure that hon. Members agree that that is a significant impact.
Each of the respondents has given us examples of their success stories—new services that are already proving popular and meeting a clear need. I trust that it will be in order for me to give just a few examples of those new services.
In Northamptonshire, three new Saturday return services between Grafton Underwood and Kettering offer access to the town centre, hospital and leisure village. In Gloucestershire, a new service has provided the opportunity for five previously unemployed residents of Lydney to find work in Coleford. In Cumbria, an improved network of services into Ulverston near Barrow offers four sevices every 90 minutes. They connect with an express bus service to Kendal, whose frequency has also been enhanced.
To allow continuity, grant distribution has been kept the same this year as last. We have asked local authorities for detailed monitoring of the impact of the grant. A survey is being conducted with the help of the Association of Transport Co-ordinating officers.
In the interests of continuity and stability, we have decided in the second year to keep the allocation of grant the same. Similarly, the conditions under which the grant can and cannot be used remain the same. The grant is new money for new services in rural areas.
The precise amounts that are payable to local authorities for this financial year are listed in annex A of the report. Hon. Members will note that nine authorities are to receive more than £1 million and that a further 25 will receive more than £500,000. I am sure that all hon. Members will agree that those are substantial sums.
Annex B details the report's main features, including the mechanism for calculating the distribution of funds on the basis of rural population. It has produced a straightforward, equitable and reasonable distribution to rural areas.
The grant must not be used to support a service that is essentially the same as one that was being operated as at 1 May 1998. However, that does not preclude the use of grant to provide additions to an existing service.
A service must be registered with the traffic commissioner as a local bus service. It must run either entirely in a rural area outside a settlement of 10,000 people or, if it serves urban and rural areas, for at least three miles outside a settlement of 10,000 people and have at least one stopping place outside such an area.
The grant will be paid in three instalments. The first 40 per cent. of each authority's total allocation will be paid upon receipt of approval by the House of Commons of the report. The second 40 per cent. will be paid in October on receipt of confirmation from the authority that it can spend the grant and that expenditure will be in accordance with the conditions that are set out in the reports. The remainder will be paid on receipt of an updated forecast later in the financial year. Once again, that should confirm that the authority can spend its allocation. If an authority confirms that the amount that it can spend this financial year is less than its current allocation, its allocation will be reduced to the lower figure and the balance will be put towards additional funding for the rural bus challenge.
The special grant deals with rural transport, which was neglected for too long. It demonstrates the importance that the Government attach to the rural community and to the transport opportunities that are available to it. It shows that we are determined, as part of an integrated transport policy, to ensure that people have transport options other than the private car. It shows that the Government are concerned that those who cannot afford a private car but still have transport needs deserve to be brought into the wider community of work and leisure. I commend the report to the Committee.
4.39 pm
Mr. Bernard Jenkin (North Essex): I echo the Minister's welcome to you, Mrs. Dunwoody. In your impartial way, you bring an unrivalled expertise to these matters, but we cannot benefit from it today.
I begin by saying how welcome these extra amounts for local authorities to spend on rural bus services are. I welcome the fact that my own local authority, Essex county council, is one of the nine authorities that will receive more than £1 million from this allocation of grant. However, the Minister must be honest about how substantial those amounts are.
Although the sums may be substantial in terms of the amount that is spent on rural bus services, they are ludicrously insubstantial compared with, for example, the amount that the Government are taking away from rural areas in the fuel duty escalator, which will raise an extra £9 billion over and above the plans that the Government inherited from the Conservatives. We learned this afternoon in Treasury questions that the Government are to continue with the fuel duty escalator until at least 2004. If one works that out, one realises that rural drivers are going to be paying £7 a gallon for their petrol.
Mr. Gordon Prentice (Pendle): Will the hon. Gentleman give way?
Mr. Jenkin: I am a little wary of giving way to the hon. Gentleman because I think that he intends to talk extensively about the fuel duty escalator—
The Chairman: I think not.
Mr. Jenkin: You may have some difficulty with that, Mrs. Dunwoody.
Mr. Prentice: The hon. Gentleman should not anticipate my remarks. Bus operators in rural areas receive subsidies through green diesel. What does the hon. Gentleman have to say about that?
Mr. Jenkin: The bus fuel duty rebate existed under the Conservative Government.
The important thing is that the amounts that the Government are putting into rural bus services are dwarfed by the vast amounts that they are taking away. If the hon. Member for Pendle (Mr. Prentice) really thinks that a million pounds here and a million there will recompense rural areas, when in just a few years they will be paying more than £7 a gallon for their petrol, he has another thing coming. I doubt that the Labour party will hold a single rural seat if that continues to be its policy.
Mr. Peter Bradley (The Wrekin): The hon. Gentleman has been in the House longer than I have. Will he clarify whether he spoke against his Government's proposals to deregulate buses or against a former Conservative Chancellor's proposal to bring in the escalator?
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