Is Pensioner free travel forcing up prices?

Discussion in 'Buses & Coaches' started by philthetube, 10 Feb 2017.

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  1. philthetube

    philthetube Member

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    Has free travel forced up single fares on buses?

    Firms get paid a percentage of the fare when a pass is used, it seems to me that fares have increased recently by way above inflation and prices of other tickets.
     
  2. Paul Sidorczuk

    Paul Sidorczuk Veteran Member

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    The so-called ENCTS "free travel" which you make mention of does not cover any of the journeys on Mondays to Fridays in the TfGM area prior to the 0930 peak-period time when the holders of these passes are liable to pay the full adult fare.
     
    Last edited: 19 Feb 2017
  3. philthetube

    philthetube Member

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    Indeed but operators get a percentage of the full fare, say 50% for easy maths. If you put fares up by 20% you gain 10% increase in revenue from all ENTCS pass holders with no resistance to increases from this group.
     
  4. Paul Sidorczuk

    Paul Sidorczuk Veteran Member

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    Have you considered the fact that staff pay rises, fuel costs, etc, are other items to be considered in the scenario you posed.
     
  5. philthetube

    philthetube Member

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    yes,but single fares seem to be increasing in price way above inflation, wages, fuel and daily,weekly etc. tickets don't seem to be rising at the same rate.
     
  6. Marc

    Marc Member

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    that isnt always the case. it varies between council or lta but if the scheme is administrated properly the payment per journey can reduce if fares go up. this is because the dft publish a calculator spread sheet with very complicated formulas to calculate the payment to the operator. the mantra is always -no better or worse than if the scheme didnt exist- but that means that if the operator gets more cash from fare payers then the pensioner payment reduces.

    having said all that not many councils bother to go throguh all the hassle of changing the calcs each time an operator changes fares.
     
  7. Ianno87

    Ianno87 Established Member

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    In Greater Manchester (and possibly some other areas) the previously heavily subsidised child fares have risen very significantly since the introduction of ENCTS in order to cover the funding shortfall for the scheme.
     
  8. Harpers Tate

    Harpers Tate Member

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    The answer is yes - as regards pay-the-driver SINGLE fares.

    And the reasoning is quite easy. The formula for calculating the ENCTS payment starts with the average adult single fare. The higher this is, therefore, the greater the subsidy. Thus bus companies have intentionally increased single fares so as to raise their subsidy. Slowly, inexorably, and knowingly. At the same time, prices of day passes and anything longer have not increased proportionately; they are the product that is priced competitively without other considerations, which in turn is why we see typical day pass prices barely more than a long-distance single.
     
  9. AM9

    AM9 Established Member

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    Given that service buses run to timetables whether they are full or empty, it would be naiive to think that every ENCTS passenger would still travel and pay the full fare should the scheme be withdrawn. So their journeys would drastically reduce thereby cutting the operator's return for services after the morning peak. After a couple of years, many routes would be reduced to peak-only, not really helping those who have to pay their fares off-peak. Then in turn those passengers would make other arrangements.
    Bus services at their current levels are to an extent dependent on the ENCTS scheme, so any political attempt to 'save money' or reduce the 'free perks' for pass holders would have unintended impacts.
     
  10. daikilo

    daikilo Established Member

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    For prices to be "forced up" presumably there would need to be a link between additional price and additional cost. If we assume that the "free" travel would not have happened if it had not been free then it leads to a tiny additional fuel cost, maybe a slightly extended average stop time and possibly an increase in size of bus. As the so-called "free" travel isn't actually without revenue then I think the answer is a clear no, there is no direct link.

    Conversely, withdrawal of subsidised fares which leads to loss of travel can lead to fare increases for others as costs are spread over fewer customers.
     
  11. carlberry

    carlberry Member

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    The operators do not receive a subsidy, the ENCTS holder is the person receiving the subsidy. The operators get an, ever reducing, percentage of the average single fare which means the reduced income has to come from somewhere else.
     
  12. the101

    the101 Member

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    Yet again, we are treated to something straight out of the 'opinion presented as fact' bin as is so common on here.

    As Carl points out, you don't even realise that concessionary reimbursement is not a subsidy.
     
  13. Marc

    Marc Member

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    this is wrong. initial calculations take in to account single, return, day, multiple journey and season tickets all weighted at different levels according to their percieved use.

    calculations also take in to account the total income of the service -or group of services- being operated. this means that putting up single -or any- fares can result in reimbursements going down if they are recalculated by the authority paying for travel. likewise the calculations are only likely to be revised if requested -and probably paid for- by the operator.
     
  14. Arctic Troll

    Arctic Troll Established Member

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    I'm going to say what I always say.

    Firstly, ENCTS reimbursement- it isn't a subsidy, it is payment for services- is calculated from a starting point largely based on the single adult fare. Therefore there is a perverse incentive for bus operators to have very high single fares for short journeys, which most of them do. It's only when you look at day and weekly tickets that you start to get fares that are not distorted by this.

    Secondly, ENCTS only reimburses for the passengers who would have paid, not everyone who travels. This has an effect where operators have to increase capacity to accommodate ENCTS passholders but do not receive additional income to pay for the increased capacity. Notable examples include Arriva Teesside having to convert the X93 to double deckers because of ENCTS passholders, and Yorkshire Coastliner having to get rid of their single deckers because they couldn't cope for the same reason. This means the additional capacity has to be paid for by fare-paying passengers, leading to inflation.

    Thirdly, ENCTS reimbursement rates are falling because of significant and prolonged cuts to council budgets. DfT no longer contribute towards the cost of ENCTS, and the councils' central formula grant funding has been falling for the last seven years due to austerity. This means that bus operators are getting less money for carrying the ENCTS passholders, a revenue stream that they cannot control, therefore the shortfall inevitably has to be made from increases in revenue streams that they do control. That means farepaying passengers.

    There are also the other costs that bus operators have that increase and, again, they can only cover the shortfall from revenue streams that they do control. This means that, in areas with a lot of ENCTS pass usage, fare rises have to be much higher than inflation just to balance the books.

    The essential problem is that the government have precisely no intention of funding the ENCTS reimbursements properly, but they lack the political courage to abolish what is an unaffordable freebie.
     
  15. Arctic Troll

    Arctic Troll Established Member

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    ENCTS reimbursements are calculated based on how many people would have paid to travel. It is reimbursement for the fares the operator would have received if people had had to pay, and is largely based on the adult single fare, but does take into account how many passholders would buy daily or weekly tickets instead. It is not based on how many people travelled, it's based on how many people would, hypothetically, have paid.

    Bus services aren't dependent on ENCTS reimbursement revenue for this very reason. A commercial service that can survive on ENCTS should, by the very nature of the calculation, survive on commercial revenue.
     
  16. Harpers Tate

    Harpers Tate Member

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    The ENCTS holder receives nothing. They are transported for "free" and the carrier is given a subsidy to do so.
    Opinion presented as fact. I represent information given to me by someone who I believe and who is in a position to know. I am not prepared to offer details.
    this is wrong.
    In fact, there are several models that can be used for this calculation. Yours is one; mine is another.
     
    Last edited: 10 Feb 2017
  17. jcollins

    jcollins Veteran Member

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    In Cheshire East holders of such passes pay 50% of the adult fare, while in Greater Manchester it's full fare.
     
  18. jcollins

    jcollins Veteran Member

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    Returns/Day tickets have gone up a lot as well. In 2007 an Arriva North West day ticket costed £3.50, today it costs £5.30.

    In the case of the bus operator High Peak buses they think if you charged a return fare of £3.50 in 2012 you can charge £6.55 in 2017.
     
  19. Arctic Troll

    Arctic Troll Established Member

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    We're probably arguing over semantics here, but ENCTS reimbursement isn't a subsidy, it is payment in lieu of fares for the passholders who travel for free.

    The passholder receives the benefit of the service, transportation for free, not the operator (many of whom would privately- and not so privately in the case of Martin Griffiths- like to see the back of ENCTS).
     
  20. radamfi

    radamfi Established Member

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    ENCTS is not compatible with bus deregulation as it is impossible to calibrate an appropriate reimbursement rate which is fair to the taxpayer, operator and other passengers at the same time. Reimbursement is not required where the operator is simply paid the cost of running the service.
     
  21. TheGrandWazoo

    TheGrandWazoo Established Member

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    I could have guessed ;) The answer is re-regulation and state control....now what's the question?

    The idea that a commercial operator cannot be adequately reimbursed is rubbish. Working on that basis, housing benefit to private landlords would also not be feasible.

    The issue is funding and has been since the nasty party got into power. The cuts are only going to get worse too. I'm now of the opinion that the ENCTS needs to be fundamentally restructured - perhaps to remove it being wholly free at point of use. However, grey haired people vote.....
     
  22. Teflon Lettuce

    Teflon Lettuce Member

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    so we have another round of "my bus fare is being pushed up by free travel for pensioners" do we?

    this oft trotted out argument is flawed on one historical fact... single cash fares had been going up faster than inflation for years before the national free pass schemes started in ALL constituent parts of the UK.

    The truth is that since deregulation there has been competition... as part of their strategy for passenger loyalty many network operators have, over the years, put up their single and return fares at a faster rate than their day and period tickets. There is a simple reason for this... once you have bought a pass from an operator you are highly unlikely to pay again to use a competitors service.

    It has obviously now got to the point where a day ticket is cheaper than 2 singles or (where available) a day return.

    It works on the same principle as many amusement parks work on... look at an amusement park that offers single ride tickets and a day pass.. and then work out how few rides you need to make before a day ticket becomes the cheaper option.

    In fact the argument that free travel schemes are pushing fares up is also flawed because of a false premise... re-imbursement rates do not go up every time fares go up... the usual practice is for a re-imbursement rate to be agreed on the average single fare at the time the council decides to make it's survey.... and then is fixed until the council can be bothered to re survey the network... here in wales some councils that I know of haven't done so in the last 5 years!

    To those who say that the travel schemes are a subsidy to operators... quite simply they are NOT. They are a payment for a service that the operators HAVE to provide by law... if an operator were to refuse to participate in the scheme they would not be entitled to BSOG. I wonder how many people who think these schemes are subsidy would like to be told they HAD to provide a service and that they would be paid x amount.....no negotiation...no consultation.... take it or leave it.

    Perhaps someone would like to try going into Tesco's, load up a trolley with a weeks shopping... and then telling the store manager that seeing as though his costs would have been the same whether you'd shopped there or not, you'll only pay £20 for your shopping because you believe that will cover the store's costs and leave it no better or worse off? If anyone does... please tell me what his answer was :D:D:D
     
  23. Paul Sidorczuk

    Paul Sidorczuk Veteran Member

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    I used the full fare example, as this is how matters are dealt with in the TfGM area. It is not often that our own council of Cheshire East are seen as more lenient than TfGM...:oops:
     
  24. johnnychips

    johnnychips Established Member

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    Arctic Troll, I sort of see where you're getting at, but who calculates and how, "people who would have paid to travel?"
     
    Last edited: 10 Feb 2017
  25. radamfi

    radamfi Established Member

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    Housing benefit is different as it is easy to compare with market rents in the area. Most renting is not paid for by housing benefit so private renting paid for by housing benefit doesn't really distort the rental market so much, except perhaps in a few isolated areas. There is also no obvious alternative to housing benefit whereas of course bus deregulation is an anomaly confined to very few developed countries.
     
    Last edited: 10 Feb 2017
  26. Busaholic

    Busaholic Established Member

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    I could have quite a lot to say on this subject but, in this instance, I'll restrict it to this. London accounts for about half the bus journeys made in England, if not the UK, and there is and has been a freeze on bus fares there, with (arguably) a decrease for some with the advent of the Hopper concession. In London, bus travel is free 24 hours per day not only for Freedom Pass holders (i.e. Greater London residents) but anyone with an English national pass. This ought to be borne in mind before pontificating about the effects on bus operation of the scheme, particularly by those who make the statement it is 'unaffordable' which is a political, subjective judgement, and can be easily countered.
     
  27. Teflon Lettuce

    Teflon Lettuce Member

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    a strange contention there that housing benefit doesn't distort the rental market... and the inference that the housing market isn't deregulated.

    Since the mid 80's social housing stock has been sold to tenants without much replacement... therefore forcing more and more people into private rent... are you telling me that the unaffordable rents charged in some areas would still be as high if landlords didn't have the difference made up by housing benefit? surely if there was more social housing and no housing benefit landlords would have to charge affordable rents otherwise their properties would stay empty... unlike free pensioner travel which is a service paid for by councils and NOT subsidy... arguably housing benefit IS a subsidy to fund the greed of landlords and to hide the failure of housing policy over the last 30 odd years!
     
  28. Starmill

    Starmill Established Member

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    The thing that I find most inequitable is free rail travel for ENCTS pass holders in areas where we are constantly told there is not enough revenue (despite much of it walking out of the door because of a lack of ticket issuing facilities) and that prices are too low. Why has free rail travel (as opposed to a generous 50% discount on the normal fare) survided while fares for everyone else have skyrocketed by the imposition of restrictions and :wub:0% rises in off-peak tickets?

    Sure I would love for ENCTS pass holders to get as much free travel as they can because it enhances their quality of life. I would also love for the Government not to persist with the crazy notion that public transport must pay for itself entirely. As it seems that's not the way things are going why do we have to make up all of the shortfall? I'm looking at you TfGMC. What's the bill to rail companies for free ENCTS travel, and what could you spend that money on instead?
     
  29. radamfi

    radamfi Established Member

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    Most landlords don't want tenants who pay housing benefit so you can simply look at the rent paid by such tenants as the "market rent". Housing benefit will rarely pay more than this. Whereas with bus fares there is it openly conceded that single fares have risen in order to maximise the free pass reimbursement. For a while, First in Greater Manchester actually had single fares *higher* than the price of a day ticket in order to profit from the funding formula. Suppose the reimbursement rate was increased. Would single fares get cut? I doubt it!
     
  30. johnnychips

    johnnychips Established Member

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    Please could you provide examples of where the single ticket price was greater than a day ticket price? Not doubting you, but if true, this is barmy.
     
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