Issue details

Proposed decision –

To increase the price of the Kent Travel Saver bus pass scheme by £35 per annum for all fee paying customers. 

Reason for the decision

-      To ensure the Kent Travel Saver scheme remains sustainable and deliverable within the Council’s medium?term financial planning assumptions, by addressing inflationary cost increases and supporting value for money aligned to the Strategic Statement.  

Background

-      The KTS scheme has been in operation since 2007 and offers subsidised travel on bus services across the county for students aged between 11-16 to support their access to education or work based learning.

-      There are currently circa 23,000 passes issued to eligible scheme users with users paying varying amounts subject to their status. The cohorts accessing the scheme and the amount they currently pay for their pass are:

o   Full payers (£580 per annum) 

o   Those on low-income (£135 per annum)

o   Those in care (Free)

o   Young carers (Free)

o   Care leavers (Free)

o   Sibling offer- families with 3 or more children (Free for any 3^rd and 4^th pass)

-   The scheme supports many of KCC’s key functions in enabling school aged children to access education and to support corporate parenting pledges by reducing the cost of bus travel against operator fares and offers an enhanced subsidy for Low Income Households and those in care or those identified as young carers and care leavers.

-      The number of pupils accessing the scheme has increased by 16% in the last three years, largely in the Low -Income and Free cost pass cohorts.  In turn, the number of Travel Saver journeys made has increased and coupled with an increase to the costs of reimbursement, this has increased the cost of providing the scheme. 

-      The scheme operates as a concessionary travel scheme, working to the same principles as the English National Concessionary Travel Scheme (the older and disabled persons pass).   The framework which all schemes have to operate in demands that Travel Saver reimburses bus operators reflecting the cash fare that they would otherwise have received from the passenger working to a principle that ensures that bus operators are left “no better and no worse off” financially as a result of the scheme.   Essentially, every journey made using a Travel Saver pass attracts a cost to KCC. 

-      Application fees paid by families represent a contribution to scheme costs.  The cost of providing the scheme exceeds income received through the application fees and costs have to be reviewed annually to ensure that the scheme remains sustainable within KCC’s budget when also having to account for expected inflationary increases to scheme costs, largely linked to the increased costs of reimbursement.   Despite continuing to use Government Bus Funding to keep pass costs as low as possible, this does mean that typically pass costs have to increase to keep pace with industry inflation.  

-      Although over time, it has proven necessary to increase the contribution made by passholders though the application fee, even when accounting for this increase, a full cost pass will equate to £3.15 per school day / £1.57 per journey and a reduced cost pass will cost £0.87 per school day / £0.43 per journey.   This is considered to continue to represent excellent value for money against the cost of operator provided season tickets which in many instances would cost over £1,000 per annum. 

Options (other options considered but discarded)

-      Greater cost increase to the full payers and low income cohorts but rejected due to the financial impact on families.

-      Introduction of charges for young carers and care leavers cohort but such measures require public consultation and carry potential implications for other KCC Directorates.

-      Increase to the administration fee relating to Direct Debit applications but rejected as this would unfairly target increases on those able to pay in full, up front.

-      Greater contribution from DFT Bus Grant allocation but rejected due to the disparity of usage of grant and the requirement to protect local bus services designated for all residents across the county.

How the proposed decision supports the Council’s Strategic Statement

-      Levelling Up Kent - Inclusive transport across all divisions

-      Sustainability – reducing the number of vehicles used in the transport of children and adults to reduce emissions.

-      Congestion – reducing the number of vehicle numbers to ease congestion on Kent roads.

-      Communities – supporting them to grow by ensuring access to work, education and local amenities.

Financial Implications

-   KCC’s Medium Term Financial Plan estimates inflationary increases to scheme costs of £479k linked to higher rates of operator reimbursement.    Additionally, an allowance needs to be made for any increase in pass numbers where each pass carries an overall NET cost to KCC. 

-   The MTFP also identified an increased income target of £290k linked to a review of charging.    In part, this supports an increase to KCC’s Supported Bus Services Budget.   It is this budget which is used to provide financial support for non-commercially viable bus services, many of which are required by Travel Saver students.    Protecting the school bus network is critical to the value of the scheme for users and the adjustments between these budgets mean that KCC will increase its total expenditure on school buses in Kent in 2026/27. 

-   The £35 increase to pass costs is estimated to represent an additional £575k additional  scheme income in 2026/27.   Through this and the continued use of DFT Bus Grant funding and increasing the application fee, the KTS scheme budget will be deliverable for 26/27. 

-   The estimated cost of delivering the scheme for 26/27 is broken down as follows:

o   Gross Scheme Costs : £15,441,553

o   Application fee income £8,549,586

o   Government Bus Fund contribution £2,106,737

o   NET cost to KCC- £4,785,500

o   (Total Subsidy to Passholders : £6,892,237)