COUNCILS in Greater Manchester are keeping é4m a year of the money given to them by the government to pay for free travel for over 60s and spending it on other things, it has emerged.

The Treasury handed over nearly é26m to the 10 districts so they could reimburse private bus companies when the national scheme to allow pensioners to ride for nothing after 9.30am was introduced last April.

But the councils passed on only é22m to Greater Manchester Passenger Transport Authority to give to the operators. The rest was absorbed into the councils' own budgets.

Because of the way the system of supporting public transport works, it is impossible to know what the money was used for but the same will happen in the next financial year.

The complicated way the government allocates grants to councils means that Manchester benefited the most from the decision not to hand all the cash over, whereas Stockport, Trafford, and Bolton got nothing.

Six bus companies appealed and just last week were awarded é3.4m a year extra to be paid by the PTA.

That decision by an independent assessor led the PTA to increase concessionary fares for almost 400,000 children all day by 40 per cent from 50p to 70p. The same increase on a single fare will apply for pensioners and the disabled travelling before 9.30am.

Result

The result led to one senior PTA councillor describing the bus operators as "robber barons". But now the operators have hit back and say there would have been no need for the massive increase in concessionary fares if they had been given all which was due.

And they claim that money given by the government specifically for buses, was also siphoned off by the PTA into rail and Metrolink services by allowing free fares on train and trams which are not covered by the government cash.

Stagecoach managing director Mark Threapleton, who is also chairman of the Greater Manchester Bus Operators Association, said: "The additional é26m to the 10 Greater Manchester District Authorities, to cover the cost of the free off-peak bus travel, was based on GMPTA's estimates of the sums required, which the bus operators agreed was a fair settlement."

The government paid out é350m nationally to councils by increasing their grants but placed no restrictions on how they could spend the money and Mr Threapleton said the operators had no option but to appeal to the Department for Transport over the "serious shortfall".

"The independent assessor's emphatic view was that in Greater Manchester the concessionary scheme is significantly under funded, Mr Threapleton added. "Rather than wrongly accusing the bus operators, the PTA councillors ought to be asking why the money was not handed over initially, and what has it since been spent on?"

And Ian Davies, managing director of Greater Manchester's biggest bus company, First, said: "More funding had actually been provided from central government to the local district councils than was passed on to the bus operators.

"We understand that there has been some difficulty for GMPTA in receiving the funds from the local districts, but this should not prevent it from passing the funds on to bus operators so that they can provide the best possible service to customers."

Martin Bott, managing director of South Lancs Travel, Greater Manchester's largest independent operator with more than 50 buses running in the Wigan and Bolton areas, won his appeal.

He said: "We were awarded a six figure sum from the appeal so the big companies must have got a lot more.

"Basically, the Department for Transport is saying that the re-imbursement scheme in Greater Manchester is not fit for purpose and they have got to go back and rethink it."

Disappointed

The authority says it is disappointed at the appeal decisions and is carrying out a review. Chairman Coun Roger Jones said: "We do drive a hard bargain because it is not our money, it is public money.

"But the result of these appeals only means that the money will go straight into their profits. They may say they are carrying a lot extra people but they are not putting on any extra services."

And Interim Director of Finance, James Aspinall said: "The é25.9 million awarded to the ten district councils in Greater Manchester by the government last year covers the difference between the cost of providing a half fare scheme and a free scheme for older and disabled people.

"However, we were already paying the bus companies so that disabled people and those aged 60 and over could travel by bus for 50p instead of half fare. We therefore only needed é22 million to make up the cost of providing a free travel scheme.

"In total, we will have paid the commercial bus firms é55 million to support cheaper or free travel for young, older and disabled people by the end of this financial year. We receive all of that money from the district councils before passing it on to the operators."

The free fares scheme, restricted to pensioners' local areas, has proved hugely popular and is due to be extended in April, 2008 so that over-60s will be able to ride for nothing anywhere in the country.

A Department for Transport spokesman said: "As long as the authorities meet their statutory responsibilities to provide the minimum services, we would not interfere with how they spend the money. That is local democracy and they are answerable to their own electorates."

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