Agenda item

Peter Osborne (Cabinet Member for Highways and Transport), Simon Jones (Corporate Director for Growth Environment and Transport) and Shane Bushell (Head of Service: Public Transport) were in attendance for this item.

 

1.Mr Osborne presented the following:

 

a)    The Committee was informed that the Kent Travel Saver pass currently supported approximately 23,000 students to travel to school by bus through discounted fares.

 

b)    The cost of operating the scheme had increased, primarily due to higher charges from bus operators and rising demands. Whilst Government funding had provided some support, this would not fully offset the increased costs.

 

c)    It was reported that, in order to maintain the scheme’s sustainability and affordability, a proposed annual fee increase of £35 for fee paying users was being considered. The Cabinet Member elaborated that despite the increase, the pass would continue to represent good value for money when compared to standard bus fares and would safeguard support for those most in need.

 

2. In response to comments and questions from Members, the discussion covered the following:

 

a)    Concerns regarding the proposed increase impact to 3,100 low income families, noting a rise of 26% (from £135 to £170 per child), equating to an overall additional cost of £108,000 were raised by a number of Members.

 

b)    Members queried the distribution of low income passholders across districts and questioned the rationale for the scale of the increase, particularly in comparison to the previous year’s 12.5% rise and average fare increases of around 6%. Concern was expressed that low income families were being disproportionately affected.

 

c)    Further questions were raised regarding the role of bus operators, including whether the increase reflected operator requests or anticipated cost pressures. Members additionally queried on how cost increases were validated, including whether access to operator financial data or audit mechanisms were in place to ensure that funding requests were justified.

 

d)    Officers explained that eligibility for the reduced cost Kent Travel Saver pass were based on qualification for targeted free school meals, and that any eligible family in Kent would be able to apply for and receive the reduced fare.

 

e)    The Committee was further informed that increases to costs were not directly set by operator requests but were calculated through a concessionary travel funding mechanism aligned with Department for Transport (DfT) requirements. It was explained that a formula determined reimbursement to operators based on journeys undertaken and reflected the fares that would otherwise have been paid.

 

f)      Cost increases had been influenced by factors including rising operator fares and additional usage of the scheme, which had seen significant expansion in recent years.

 

g)    Members questioned if operators were being reimbursed at an appropriate level under the concessionary travel scheme, referring to concerns that reimbursement rates might exceed the principle that operators should be “no better off and no worse off.”

 

h)    Clarification was sought on how the Council challenged and verified operator claims to ensure that reimbursement accurately reflected actual foregone revenue and did not result in unintended profit.

 

i)      Officers acknowledged the points and responded that the cost associated with each pass varied depending on usage. Members noted that the reimbursement mechanism included a “generation factor” within its calculation.

 

j)      It was explained that this factor accounted for additional journeys generated as a result of the scheme being more attractive than standard commercial fares. The approach was intended to ensure compliance with the principle that operators should be no better off and no worse off overall.

 

k)    Members suggested that the subject of operator profit be explored further at some point. The Committee queried the interaction between BSIP?funded subsidised routes and the Kent Travel Saver scheme.

 

l)      Questions were raised whether the Council was required to reimburse operators for Travel Saver journeys on routes that were already subsidised, and if so, raised concerns that this could result in the Council effectively funding both the service provision and the passenger usage.

 

3. Additional comments and questions from Members, encompassed the following:

 

a)    The Committee was advised that bus service contracts were structured in two main ways. In some cases, operators retained passenger revenue, including concessionary reimbursements. This aspect would be reflected in their contract pricing through the competitive tender process.

 

b)    Officers discussed that the Council did not pay the full cost of the service, as anticipated revenue was considered. It was noted that contracts were increasingly structured so that the Council assumed the financial risk or benefit. In these instances, fare revenue had effectively operated as an internal funding mechanism between the Travel Saver scheme and the supported bus service budget. Officers reassured Members that the Council did not pay twice for the same service provision and passenger usage.

 

c)    In response to a question on projected costs, officers advised that increases within the scheme reflected assumed inflation in both the number of passes issued and the volume of journeys undertaken, as well as increases in the per journey reimbursement rate. It was noted that there had been a consistent rise in pass numbers from 2021/22 through to 2024/25, with this growth largely driven by an increase in free and reduced?cost passes.

 

d)    The Committee further discussed a shift in the overall composition of passholders, with a decreasing proportion contributing full or partial payments. This trend was identified as a key factor contributing to the anticipated financial pressure for the forthcoming scheme year.

 

e)    Members asked if the full increase of £35 was necessary, although it was noted that this would be partially mitigated by the option for payment by monthly instalments.

 

f)      Raised questions regarding the financial assumptions set out in the report, noting that paragraph 5.1 identified £479,000 in inflationary pressures, while paragraph 5.3 projected £575,000.

 

g)    In additional income from the proposed £35 increase, leaving an apparent surplus of approximately £96,000. Members suggested that, based on these figures, there may be scope to reduce the level of increase, particularly for the 3,100 low income passholders, and queried whether a smaller rise could be applied.

 

h)    The Committee therefore asked whether the remaining amount was being retained as a contingency or reserve, and whether this approach was appropriate in the context of the impact on users.

 

i)      In response officers advised that the final cost of the scheme would ultimately depend on actual usage over the course of the year, with a detailed methodology underpinning the calculation and advised that it was not possible to reliably predict a surplus at year end. It was further indicated that any such surplus would likely be managed through existing mechanisms, including alignment with Bus Service Improvement Plan (BSIP) funding.

 

j)      Concerns regarding the application of a flat £35 increase across all users, noting that this represented a proportionally higher increase for those on reduced or supported fares compared to those paying the full cost.

 

k)    Members observed that this approach could place a greater financial burden on lower income families and queried the rationale for applying a uniform increase rather than a percentage based approach.

 

l)      Clarification on whether alternative models had been considered, specifically an option applying a consistent percentage increase across different fee bands to achieve the same overall revenue of £575,000, and why this approach had not been adopted.

 

m)  The Committee was advised that the approach to fee increases had considered the growing disparity between full fare and reduced fare users over recent years. Full fare charges had increased considerably in the past, while reduced fares for low income users had remained relatively stable. This had resulted in a widening gap between the two groups.

 

n)    Officers explained that further increasing full fares alone would have effectively required those users to continue subsidising reduced fare users to a greater extent. It was explained that this had been a key consideration in the decision to apply a flat rate increase across the scheme.

 

o)    Members expressed strong concerns regarding the proposed flat £35 increase, noting that it placed a disproportionate burden on lower income families and departed from the Council’s previous approach of protecting those eligible for reduced fares.

 

p)    A recommendation was proposed and seconded that a percentage increase be explored. The recommendation was put to the vote:

 

 

      The recommendation was put to the vote and unsuccessful.

.

 

q)    A recommendation was proposed and seconded to endorse the original decision:

 

 

         The recommendation was put to the vote and was successful.

 

 

4.Mr Hood asked that his objection to the KTS price increase be noted in the minutes.

 

 

 

RESOLVED to endorse the proposed decision, namely:

 

 

a)    APPROVE the increase in the price of KTS and

 

b)    DELEGATE authority to the Corporate Director to take all relevant actions and decisions necessary for its implementation.