Tax warning over OAP bus passes (From Times Series)

Tax warning over OAP bus passes

9:20am Thursday 12th January 2006 in

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A GOVERNMENT scheme for free bus passes for pensioners threatens to increase council tax in St Albans and stop cheap rides to neighbouring towns and local hospitals.

Talks between local bus comapanies and the district council on funding the new passes, due to come into force in April, are stuck, and the district council may have to cut back on its existing scheme.

Resources portfolio holder Chris Oxley said: "It is a terrible dilemma."

Chancellor Gordon Brown announced last year that all local authorities would have to provide free off-peak travel for the disabled and people over 60.

Although St Albans has been given an extra £472,000 of government cash to cover the cost of buying passes, the bus companies are asking for much more. The council already funds a concessionary bus fare scheme, under which over 60s can buy a pass which gives them half-price travel not just in St Albans, but throughout Hertfordshire.

The disabled and people over 70 can buy a pass giving free travel to hospitals and town centres in Watford, Hemel Hempstead, Luton and Welwyn Garden City.

But the bus companies say the new free district-wide passes will cost the council £338,000 more than it pays at the moment, even if the cheap travel outside St Albans is dropped.

The sum currently being demanded would mean an increase of 3.5 per cent in the portion of council tax charged by the district council, which Councillor Oxley, who holds the purse strings, says is completely unacceptable.

Head of finance Ian Duffield told last week's cabinet meeting: "It is proving a difficult process.

"It may be we can not reach agreement."

Cabinet member Geoff Churchard said: "It could cost us a lot more money and some people will get a much worse service.

"It is very unsatisfactory."

The negotiations are stymied over doubts about how many elderly people actually use the buses, and the authority, in co-operation with neighbouring district councils, is engaging consultants to look into the figures. If agreement can't be reached the Hertfordshire district councils could jointly impose a level of payment, but it could be overturned by a formal arbitration process.