Sunday, 9 February 2014

Freedom Passes - Who pays in Barnet?

See update below in red
The Freedom Pass is a tricky subject and a number of people have warned me off speaking about it but I think it is an area where there needs to be more of a debate.

In Barnet we paid £15.3 million this year towards the cost of Freedom Passes. That comes out of council tax ,not from the separate GLA precept, and represents an average of £110 per household or around 10% of the band D council tax. Now I want to make it clear that I don't object to people having Freedom Passes but I do want more people to understand exactly what they cost and who pays. Each year the cost of Freedom Passes goes up, typically by above inflation levels, mirroring the increase in cost of tube and bus fares. In 2014/15 the cost of Freedom Passes will rise by 4.7% - this increase has been agreed by the London Council who administer the freedom pass scheme (hat tip to Mr Mustard for forwarding on the papers). For Barnet that means the cost of Freedom Passes will increase by approximately £720,000 to just a shade over £16 million per annum.

"So what", you may say "people are entitled to Freedom Passes, it's their right". The problem is that since 2010 Barnet have frozen the council tax and in April they are introducing a 1% cut. That means that to pay for the Freedom Pass increase, other services have to be cut even further. Every other service in Barnet has been subject to scrutiny and review and for many, severe cuts, but Freedom Passes, which make up 10% of the Council Tax we pay, are exempt from any form of debate or challenge. I suspect this is because politicians see this area as a massive voter loser.

From my perspective I am definitely not saying that Freedom Passes should be cut, but that we should at least be honest about what they cost and if we want to maintain them, then recover the cost through an increase in council tax. The problem is that this is an election year and local politicians want to give residents a small cut when the politicians know they can't afford it without making cuts elsewhere. If they had put council tax up by a modest 1% that would have at least covered the increase cost of the Freedom Passes along with some of other contracts which have in-built inflationary increase formulae (such as the contract with Agilisys, the One Barnet implementation consultants). But instead they are cutting council tax by 1% meaning other budgets have a double whammy cut.

So in summary who pays for the "free" Freedom Passes - we all do through our council tax but critically people in receipt of adult social care and children's services are increasingly bearing the burden through cuts in their services as the cost of Freedom Passes rise every year and that, in my opinion, is wrong. Let's at least have an honest debate about council tax cuts and freezes and who increasingly is bearing the burden of Freedom Passes - the most vulnerable in Barnet.

I shall be attending the BAPS Question Time on Monday 17th February 7pm at St James Church on East Barnet Road and I hope I will get the opportunity to raise this with politicians and see what they have to say.

As I have been asked about the cost of Freedom Passes I have set out below a response I received under the Freedom of Information Act to TFL in 2011

Dear Mr Dix

TfL Ref: FOI-0255-1112

Thank you for your email received by Transport for London (TfL) on 3 June
2011 asking for information about Freedom Pass usage.

Your request has been considered in accordance with the requirements of
the Freedom of Information Act and TfL’s information access policy. I
can confirm TfL holds some of the information you require. For ease of
reference I will address each part of the response as outlined in your
request.

1. The number of bus, rail and underground journeys made using the Freedom
Pass in the financial year 2010/11, (or calendar year 2010 if that is how
the data is collected). Please can you state clearly if this is an actual
recorded number or simply an estimated number.

The latest readily available recorded figures are for the year ending 30
September 2010. The number of journeys taken was:

Bus 307.7 million

Underground 49.9 million.

National Rail (NR) services are not provided by TfL, and TfL does not have
comprehensive information on usage of Freedom Passes on NR services.

2. If the number is of actual recorded journeys, please can you tell me
the cost of those journeys based on standard fare charges.

These numbers are based on Oyster validations plus an estimate for
unvalidated journeys. We are unsure what is meant by “standard fare
charges”.

For illustration, at 2010 fares, the standard Pay As You Go (PAYG) fare on
buses was £1.20, which would give a total value of bus journeys of
£369.2 million; the average PAYG fare on the Underground was £1.78 which
would give a total value of Underground journeys of £88.8 million.

3. The total number of Freedom Passes issued and charged to London
Boroughs for the same time period.

Freedom Passes are issued by the London Boroughs, not TfL. The Boroughs
are not charged on a “per permit” basis (see below). TfL understands
that the number of holders is around 1.1 million.

4. Please can you tell me if the number of journeys made by Freedom Pass
holders can be attributed to the London Borough who issued the Freedom
Pass.

Yes, where an Oyster validation is obtained.

4. Please can you tell me how the cost to London Boroughs for each Freedom
Pass is calculated.

A total cost (i.e. not a “per permit” figure) is agreed in respect of
each financial year. The basis of the payment (as set down in the GLA Act)
is that TfL’s costs should be met. The main elements in the calculations
are as follows:

● The number of Freedom Pass journeys are estimated (after
removing journeys during the AM peak Mon-Fri for which the Boroughs do not
pay)

Econometric models are used:

a) to assess the number of journeys that would still be made in the
absence of the Freedom Pass scheme;

b) to estimate an appropriate average fare, based on the likely
ticket-type mix (cash fares, Pay As You Go, Travelcards etc.) of those
journeys;

c) to estimate the costs in incurred in providing additional
buses to carry the additional journeys the free scheme generates.


● The values of a) and b) for each mode of transport (Buses,
Underground, DLR, Tramlink, Overground) are then multiplied together to
give a payment for each mode. These are then added, together with the
amount in c), to give the total payment by the Boroughs.

The allocation of this cost between individual Boroughs is a matter for
them individually.


4 comments:

  1. Hi Mr R, there is less than a decade for me to wait to get a pass to travel free on the tube. Now I will be able to afford to pay for the freedom pass in my retirement and I suspect that lots of other people will also be sufficiently comfortable not to need it. I think that what should happen is that there should be a voluntary scheme whereby people who have annual income above £xxxxx should be nudged to not apply with no adverse sanction if they decide to all the same. That way numbers of applicants could fall and so could the bill to the council i.e. us.

    It would be jolly handy though for me to go to PATAS each week completely free of charge to contest PCN.

    Mr M.

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  2. Is it possible to find out what the actual cost IS?

    How do they assess this? Is most of the cost the administration itself or is it fees given to transport companies to offset the free travel they give to those holding the passes?

    Can we find out how many residents in Barnet qualify for these passes, so we know what the Per Person cost is too?

    I'm flabbergasted that the cost is so high. Like you, I believe in the idea of providing Freedom Passes but had no idea they took such an enormous chunk of what we are all paying in council tax.

    Thanks

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  3. Hi Kavey,

    I have now attached the details of how the cost of freedom passes are calculated by TFL. This is a matter I have been considering for several years and is an area where I suggested the council should negotiate much harder to get Barnet's share reduced. As soon as I read the words "econometric model" I start to worry that someone somewhere has fudged the figures.

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  4. Thank you so much for looking into this further...
    I'm concerned that the actual cost of Freedom Passes is based on estimates of how many paid journeys would still be made if the passes didn't exist (if I'm understanding right) and that seems to be an impossible calculation. Furthermore, it's very vague indeed about exactly how the total cost is divided amongst the London boroughs - it seems it's not something simple like a ratio based on numbers of people in the boroughs or anything of that basis, but a matter for them to "agree" between them...
    It's all a bit too hazy, isn't it?

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