Operators Scamming Councils With Concessionary Passengers?

[neilmc]

Consider this situation in Cumbria:

I go for a day out from Kendal to Keswick with my wife; I am an ENCTS pass holder, but she is not yet eligible.

We get on the Stagecoach bus service 555. I show my pass to the driver, he prints out a single zero-fare ticket from Kendal to Keswick and I sit down.

My wife goes to pay the driver.

"Single fare is £10.80," he advises. "But you can buy a North West Explorer for £11.50, that will cover you all day." So she does.

When we return later, she shows the day ticket and I show my ENCTS pass and get a similar single ticket.

So Stagecoach have received £11.50 from my wife. However, they will receive 58% (the agreed ENCTS recompense) of two single journeys costed at £10.80 EACH which is a sum total of £12.52, from the County Council!

Is this fundamentally correct or have I missed something? Obviously Stagecoach are deliberately pricing single tickets quite highly so that the ENCTS return is higher, whilst offering all-day tickets for little more than the single fare for a fairly long journey for those who don't qualify for a pass.

I admit I have a dog in this race, I am part of a political group considering transport provision in Cumbria and I want to be sure I have my facts right before considering possible options post-devolution..

 

[Contains Nuts]

The bus operator received a percentage of the AVERAGE fare across the network, which will include all of the short distance fares combined with the long distance fares. In the case specified I’d be surprised if Stagecoach received more than three quid reimbursement.

Note that the ENCTS scheme dictates that operators should be ‘no better or worse off’ and there is a calculator issued by the DfT whereby if the number of passengers or the average fare goes up, the total reimbursement usually goes down.

 

[carlberry]

Consider this situation in Cumbria:

I go for a day out from Kendal to Keswick with my wife; I am an ENCTS pass holder, but she is not yet eligible.

We get on the Stagecoach bus service 555. I show my pass to the driver, he prints out a single zero-fare ticket from Kendal to Keswick and I sit down.

My wife goes to pay the driver.

"Single fare is £10.80," he advises. "But you can buy a North West Explorer for £11.50, that will cover you all day." So she does.

When we return later, she shows the day ticket and I show my ENCTS pass and get a similar single ticket.

So Stagecoach have received £11.50 from my wife. However, they will receive 58% (the agreed ENCTS recompense) of two single journeys costed at £10.80 EACH which is a sum total of £12.52, from the County Council!

Is this fundamentally correct or have I missed something? Obviously Stagecoach are deliberately pricing single tickets quite highly so that the ENCTS return is higher, whilst offering all-day tickets for little more than the single fare for a fairly long journey for those who don't qualify for a pass.

I admit I have a dog in this race, I am part of a political group considering transport provision in Cumbria and I want to be sure I have my facts right before considering possible options post-devolution..

I'd suggest scamming is an over the top statement for a situation that's appears to just follow the stated rules. There has been evidence of some bus companies scamming the scheme (i.e. claiming for jounneys that have not been made) which have been closed down as a result. Cumbria has suffered from having a council without an interest in bus services (wintess the abandonment of all subsidised services) however I wasn't aware of any English councils or regions that were actually even considering devolution, let alone if they'd be allowed to.

== Doublepost prevention - post automatically merged: 5 Nov 2021 ==

Can I just go on a slight tangent seeing as we're talking about a similar thing? I have a West Yorkshire 19-25 Mcard, costing £16.50 a week. How does this get split up? For example if I go out bashing and ride 10 individual buses across let's say 3 different companies, how much does the operator claim for each journey? If they claim £2 for each ride for example; that £16.50 isn't going a long way to cover the compensation.

The payments for any offers like this would have been negotiated between the authority and the operators. Often the arrangements are simplified so it's an agreed percentage either based on the number of journeys that each operator operates, or the percentage of trips that each operator records over a fixed period of time. It would be unusual to break down an individual payment.

 

[jammy36]

Consider this situation in Cumbria:

I go for a day out from Kendal to Keswick with my wife; I am an ENCTS pass holder, but she is not yet eligible.

We get on the Stagecoach bus service 555. I show my pass to the driver, he prints out a single zero-fare ticket from Kendal to Keswick and I sit down.

My wife goes to pay the driver.

"Single fare is £10.80," he advises. "But you can buy a North West Explorer for £11.50, that will cover you all day." So she does.

When we return later, she shows the day ticket and I show my ENCTS pass and get a similar single ticket.

So Stagecoach have received £11.50 from my wife. However, they will receive 58% (the agreed ENCTS recompense) of two single journeys costed at £10.80 EACH which is a sum total of £12.52, from the County Council!

Is this fundamentally correct or have I missed something? Obviously Stagecoach are deliberately pricing single tickets quite highly so that the ENCTS return is higher, whilst offering all-day tickets for little more than the single fare for a fairly long journey for those who don't qualify for a pass.

I admit I have a dog in this race, I am part of a political group considering transport provision in Cumbria and I want to be sure I have my facts right before considering possible options post-devolution..

I do not know the precise formula that Cumbria use, but certainly they won't simply be paying 58% of the single fare. The 58% reimbursement figure relates to the gross revenue forgone - i.e it takes account of the additional passengers generated by participating in the scheme. The actual reimbursement to the operator will likely include a "product discount" that reflects the proportion of passengers who would be travelling using the various discounted tickets (including day, return, period, network tickets, etc). Effectively this probably means that the more Explorer tickets issued the less the overall reimbursement payment.

 

[ANDREW_D_WEBB]

Scamming seems like quite a harsh comment, suggesting criminal intent. What might be interesting is what would fare levels be like if the ‘bus pass’ hadn’t been introduced. Have operators had to raise fares more than expected for other groups in order to compensate for what is viewed by the industry as very poor reimbursement rates for accepting the pass? Probably impossible to work out.

 

[neilmc]

It's probably a comparable situation in every rural county, I wasn't suggesting that Stagecoach weren't doing anything other bus operators don't do by fixing single fares near to the cost of an all-day ticket, on the grounds that hardly anybody will buy a single ticket!

Are people suggesting that the bus company will NOT receive 58% of the fare the passenger would have paid had they paid cash per single journey, or that the county will reduce this on the grounds that the pass holder MIGHT have been making a return journey - there is obviously no way of knowing this!

== Doublepost prevention - post automatically merged: 5 Nov 2021 ==

Ah, I think I've partly answered my own question, from Cumbria County Council's information on the ENCTS scheme:

The net revenue foregone will be determined every month from the relevant adult single fare for the journey, adjusted for the estimated discount that would have been available to passengers making the journey. This is termed the product discount and is applicable to return tickets and day rider type tickets. 26. For each operator the following will be ascertained: • The number of single, return and day rider type tickets sold during the times when the ENCTS applies. • The rates of discounts given on return and day rider type tickets 27. Based on the information in clauses 25 and 26, the total full fare equivalent will be adjusted. This is based on the assumption that the same percentage of concessionary travel pass holders would purchase discounted tickets (day and return) as fee paying passengers in the absence of the scheme. 28. The shadow fare used for reimbursement will be capped at any maximum return or day type fare available for the journey.

In other words, if say 80% of full fare paying passengers actually buy all-day tickets after 09:30, the assumption is that 80% of ENCTS passholders would do likewise and the full fare equivalent would be reduced by ... what?? The ENCTS passengers might make much shorter journeys than the average fare-paying tourist if the buses are used for lots of residents travel, is the system clever enough to record such things, or when the same passenger buys more than one ticket per day based on the ENCTS pass details?.

 

[jammy36]

Are people suggesting that the bus company will NOT receive 58% of the fare the passenger would have paid had they paid cash per single journey, or that the county will reduce this on the grounds that the pass holder MIGHT have been making a return journey - there is obviously no way of knowing this!

As I said above the reimbursement paid to the operator will likely include a "product discount", but I do not know the precise formula that Cumbria uses. The reimbursement will be based on a "shadow fare" which uses the single journey fare as a baseline. The "product discount" formula would then be applied to this "shadow fare". This would likely be calculated by looking at the non-ENCTS tickets sold at the times the scheme applies and adjusting the reimbursement payment based on the percentage of single, return and discount tickets sold. I.e. the reimbursement would assume that if 50% of fare-paying passengers are travelling on a discounted ticket, then 50% of the ENCTS tickets would (in the absence of the scheme) also have purchased a discounted ticket and the "shadow fare" reduced accordingly.

 

[Citistar]

I may be wrong, but the 58% figure doesn't sound right to me. Each year, the DfT publishes a calculator spreadsheet which is intended to be used for settling reimbursement rates. It can be found here.

As a comparison, i am a bus operator running very rural weekly shoppers services commercially in Bath & North East Somerset / North Somerset, i will receive slightly less than 44% of the maximum adult single fare for each concession scan once the guaranteed concession reimbursements from Covid and recovery funding come to an end. Our fares don't get anywhere remotely close to the £10.80 of the Stagecoach service and we've been consistently told by the local authorities that if fares go up then concessionary payments go down and this is consistent with how the calculator spreadsheet appears to function.

 

[Man of Kent]

Many large operators have agreed fixed annual deals for ENCTS reimbursement, which gives certainty both to the operator (a known income) and the local authority (a fixed cost).

This was not the case in Lancashire some years ago, when I last had an involvement. Figures were calculated on actual use every month. As Cumbria is part of the "NowCard" scheme organised by Lancashire, this may apply here too.

With most modern ticket machines, it is perfectly possible to check the successive boarding points of an individual ENCTS card, to understand the journey patterns being made. An interesting question is that with the government's push via "Bus Back Better" for tap-on tap-off fares, is whether ENCTS holders will be encouraged to tap off, so that journeys can be recorded more accurately.

 

[Dai Corner]

I may be wrong, but the 58% figure doesn't sound right to me. Each year, the DfT publishes a calculator spreadsheet which is intended to be used for settling reimbursement rates. It can be found here.

As a comparison, i am a bus operator running very rural weekly shoppers services commercially in Bath & North East Somerset / North Somerset, i will receive slightly less than 44% of the maximum adult single fare for each concession scan once the guaranteed concession reimbursements from Covid and recovery funding come to an end. Our fares don't get anywhere remotely close to the £10.80 of the Stagecoach service and we've been consistently told by the local authorities that if fares go up then concessionary payments go down and this is consistent with how the calculator spreadsheet appears to function.

I've yet to make it to rural Somerset on a weekday morning to observe for myself but I'd imagine that the number of fare-paying passengers on this kind of service would be approximately zero. If I was an operator of one I'd be tempted to reverse-engineer the DfT's spreadsheet and set my (effectively hypothetical) fares to maximise my reimbursement.

 

[Citistar]

I've yet to make it to rural Somerset on a weekday morning to observe for myself but I'd imagine that the number of fare-paying passengers on this kind of service would be approximately zero. If I was an operator of one I'd be tempted to reverse-engineer the DfT's spreadsheet and set my (effectively hypothetical) fares to maximise my reimbursement.

The local authority responsible have made it clear that they aren't interested in discussing the matter. I think i'd have to take them to arbitration to get it reassessed.

Their default position is that any concessionary boardings in the former Avon area are worth 92.24p and has been for over a decade, regardless of journey length. Having challenged this (in 2013, backed up with the DfT calculator as evidence) that figure for my services is £1.75. Recent increases in fuel prices now mean i'm effectively providing labour for the services on a voluntary basis. The situation isn't sustainable, but nobody at the authorities care because they're planning some demand responsive nonsense to serve the area, which will probably be disruptive enough to scare off the 20-30 passengers i carry each journey as many of them have access to their own transport.

But of course, us scumbag bus operators are all busy "scamming" the councils to make our fortune.

 

[Dai Corner]

The local authority responsible have made it clear that they aren't interested in discussing the matter. I think i'd have to take them to arbitration to get it reassessed.

Their default position is that any concessionary boardings in the former Avon area are worth 92.24p and has been for over a decade, regardless of journey length. Having challenged this (in 2013, backed up with the DfT calculator as evidence) that figure for my services is £1.75. Recent increases in fuel prices now mean i'm effectively providing labour for the services on a voluntary basis. The situation isn't sustainable, but nobody at the authorities care because they're planning some demand responsive nonsense to serve the area, which will probably be disruptive enough to scare off the 20-30 passengers i carry each journey as many of them have access to their own transport.

But of course, us scumbag bus operators are all busy "scamming" the councils to make our fortune.

So basically you're taking this little group of pensioners shopping in Weston and bringing them home for about fifty quid? Pretty sure the Darby and Joan Club wouldn't be able to hire a bus/coach for that!

Oh, and don't get me going on DRT (Dreadful Rural Transport).

 

[Megafuss]

The single price is quite high, but I assume Stagecoach cross subsidise the busy summer with the very quiet winter (I've seen it first hand) so that they can still provide a service for the local ENCTS pass holders when no tourists are about plugging the gap between the cost of providing a service when a very small number of fare payers at that time of year

 

[Tom Gallacher]

Regarding operators "scamming" the system I remember up here in Scotland when the government changed the system from manual recording to digital. A lot of small operators suddenly decided that they no longer wished to be in the business. Could have been a co-incidence of course

 

[RT4038]

Consider this situation in Cumbria:

I go for a day out from Kendal to Keswick with my wife; I am an ENCTS pass holder, but she is not yet eligible.

We get on the Stagecoach bus service 555. I show my pass to the driver, he prints out a single zero-fare ticket from Kendal to Keswick and I sit down.

My wife goes to pay the driver.

"Single fare is £10.80," he advises. "But you can buy a North West Explorer for £11.50, that will cover you all day." So she does.

When we return later, she shows the day ticket and I show my ENCTS pass and get a similar single ticket.

So Stagecoach have received £11.50 from my wife. However, they will receive 58% (the agreed ENCTS recompense) of two single journeys costed at £10.80 EACH which is a sum total of £12.52, from the County Council!

Is this fundamentally correct or have I missed something? Obviously Stagecoach are deliberately pricing single tickets quite highly so that the ENCTS return is higher, whilst offering all-day tickets for little more than the single fare for a fairly long journey for those who don't qualify for a pass.

I admit I have a dog in this race, I am part of a political group considering transport provision in Cumbria and I want to be sure I have my facts right before considering possible options post-devolution..

As others have pointed out, the ENCTS recompense is based on a an average of fares across the whole bus company, single (x1 journey), return (x2 journeys) and day (by 3 probably), and then paid at a %, [58% sounds quite high], with some other complexities. The number of passengers travelling in the county buying single tickets as high as £10.80 will be very small indeed, and probably has little effect on the average 'single journey' fare. The bus company will be setting the Explorer fare on a commercial basis of what they think passengers will be prepared to pay, not on the basis of what a small percentage of passengers may be travelling long distances on multiple buses with it.

The bus companies in this country are not making excessive profits, so I think that scamming County Councils is fairly unlikely. County Councils are also mindful that squeezing bus companies too hard will merely result in further de-registrations, which is probably not in their interest.

== Doublepost prevention - post automatically merged: 6 Nov 2021 ==

Many large operators have agreed fixed annual deals for ENCTS reimbursement, which gives certainty both to the operator (a known income) and the local authority (a fixed cost).

This is also true, but the fixed deals are also reviewed annually in line with actual use. It only gives certainty for the year ahead.

== Doublepost prevention - post automatically merged: 6 Nov 2021 ==

If I was an operator of one I'd be tempted to reverse-engineer the DfT's spreadsheet and set my (effectively hypothetical) fares to maximise my reimbursement.

I think the issue is that the higher the fare the greater the 'generation factor' [i.e. the formula that calculates the number of generated passengers caused by the free pass compared to paying the ordinary fare 'no better and no worse off' for operators. The higher the fare, the higher the generation factor, so the bus company can't easily game the system].

 

[carlberry]

The bus companies in this country are not making excessive profits, so I think that scamming County Councils is fairly unlikely. County Councils are also mindful that squeezing bus companies too hard will merely result in further de-registrations, which is probably not in their interest.

In Cumbria the opposite is true, the more routes the bus companies de-register the less the council has to pay out for ENCTS so they win.

 

[Simon75]

How different is the English system compared with the rest of the UK, as Scotland is paid direct from the Scottish government

 

[neilmc]

For Cumbria, the 58% reimbursement rate is no secret, it's on the county council's website if you go looking for it. However it's clearly more complicated than that based on the council's assessment of how many ENCTS passengers would buy discounted all-day tickets if they had to pay the normal fare, and that I don't know. I'm pleased that they're not just doling out 58% of the rather high fares without any further assessment as that would reward even higher single fare setting.

 

[TheGrandWazoo]

For Cumbria, the 58% reimbursement rate is no secret, it's on the county council's website if you go looking for it. However it's clearly more complicated than that based on the council's assessment of how many ENCTS passengers would buy discounted all-day tickets if they had to pay the normal fare, and that I don't know. I'm pleased that they're not just doling out 58% of the rather high fares without any further assessment as that would reward even higher single fare setting.

So you're now happy that Stagecoach, or other major operators (and many small ones) are not scamming councils?

In fact, I can only think of a couple of instances of such behaviour, both curiously in Gwynedd with Padarn Bus and Express Motors, with the directors being prosecuted accordingly.

 

[neilmc]

Well, I rather suspected the possibility of scamming once I saw that if the recompense is based purely on a percentage of single fares bus operators may end up recouping MORE than the likely fare would have cost given that relatively few journeys are genuinely single, but I realise that's not the case in Cumbria (I think) given that the council appear wise to the possibilities; I never suggested that there was anything illegal going on, just that operators would set their single fares very high to maximise revenue from the councils rather than come up with a viable fare scale.

If I were an operator out to scam the council I think I'd send my granny into somewhere like Carlisle which is one of the few places with reasonable frequency services and tell her she has to joyride on at least twenty buses before I make her any tea, and if she recruits three or four mates to ride round with her all day she can have a small sherry on the side. (Does anyone do this??)

 

[Contains Nuts]

If I were an operator out to scam the council I think I'd send my granny into somewhere like Carlisle which is one of the few places with reasonable frequency services and tell her she has to joyride on at least twenty buses before I make her any tea, and if she recruits three or four mates to ride round with her all day she can have a small sherry on the side. (Does anyone do this??)

It is quite common for individuals or small groups of pass holders to ‘go for the ride round’ but this falls into the category of ‘no better or worse off’ where the reimbursement is reduced because if the passengers were paying the fare they would be unlikely to travel for more than their essential journey.

In reality, there are several operators who have tried to ‘scam’ the system - as mentioned above the two north Wales operators who had high profile cases brought against them, but there have been others I have seen. In some cases they have had local authority contracts taken off them, and I’ve seen instances where an operator has been made to purchase smartcard-enabled ticket machines to prevent the over-use of a ‘free pass’ button on the ticket machine.

It is true that since the introduction of the free concessionary travel scheme single fares have risen disproportionately, but the way the reimbursement mechanism works many operators have been forced to do this to cover basic costs, otherwise you could carry a bus-load of passengers and make a loss on it.

Going back to the original point, it’s almost inconceivable that the largest bus operator in the UK would deliberately attempt to defraud an organisation as the consequences of this would be huge, both for the business and the directors.

Really, what the bus industry needs at present is a lot of support to recover from the pandemic, rather than people trying to point the finger at operators who have enough to worry about.

 

[Simon75]

* note I'm not accusingly any company of scamming, but what happened*

First Potteries (pre ticketer) example
Hanley to Leek, but traveled to Snyed Green about 1 mile or so, ticket showed destination as Leek, not Snyed Green
How come that happened

== Doublepost prevention - post automatically merged: 7 Nov 2021 ==

It is quite common for individuals or small groups of pass holders to ‘go for the ride round’ but this falls into the category of ‘no better or worse off’ where the reimbursement is reduced because if the passengers were paying the fare they would be unlikely to travel for more than their essential journey.

In reality, there are several operators who have tried to ‘scam’ the system - as mentioned above the two north Wales operators who had high profile cases brought against them, but there have been others I have seen. In some cases they have had local authority contracts taken off them, and I’ve seen instances where an operator has been made to purchase smartcard-enabled ticket machines to prevent the over-use of a ‘free pass’ button on the ticket machine.

It is true that since the introduction of the free concessionary travel scheme single fares have risen disproportionately, but the way the reimbursement mechanism works many operators have been forced to do this to cover basic costs, otherwise you could carry a bus-load of passengers and make a loss on it.

Going back to the original point, it’s almost inconceivable that the largest bus operator in the UK would deliberately attempt to defraud an organisation as the consequences of this would be huge, both for the business and the directors.

Really, what the bus industry needs at present is a lot of support to recover from the pandemic, rather than people trying to point the finger at operators who have enough to worry about.

Once First Potteries 18 Hanley to Leek extended to Haregate estate.
My self and and a friend (disability pass),were at Leek bus station travelling back to Hanley, but didn't want to stand around for about 20 minutes, so we got the bus to Haregate, before it came back to the bus station. Told the driver we were going to Hanley. Scanned our passes. Once it got to Haregate we had to scan them again.
Not sure why, but j guess it was classed a 2 separate journeys

 

[markymark2000]

First Potteries (pre ticketer) example
Hanley to Leek, but traveled to Snyed Green about 1 mile or so, ticket showed destination as Leek, not Snyed Green
How come that happened

The rules about stating end destination were from a while ago where this was more important and payments were given based off the end destination. Now everyone saves time and it's just logged as a concessionary pass which has been used on that journey and your destination doesn't really matter. That said, even back before this became mainstream, it's too time consuming to go back and change the destination. Especially if it's the same fare. Why waste time doing silly things like that. It holds everyone up.

Once First Potteries 18 Hanley to Leek extended to Haregate estate.
My self and and a friend (disability pass),were at Leek bus station travelling back to Hanley, but didn't want to stand around for about 20 minutes, so we got the bus to Haregate, before it came back to the bus station. Told the driver we were going to Hanley. Scanned our passes. Once it got to Haregate we had to scan them again.
Not sure why, but j guess it was classed a 2 separate journeys

Two separate trips officially. This is a driver preference one really. It is 2 separate journeys being made. Some drivers will ask for it to be recorded again, others won't because of saving time and hassle. A driver mate of mine will do it if it's a tendered trip. We had a Chester - Kinnerton 62 (Cheshire West tender) which interworked onto the Kinnerton - Mold 63 (Flintshire tender) and many drivers wouldn't ask for passes again so it would look like the passenger numbers were much lower than they actually were. It would show 3 people used a trip when infact, it was 6. 3 got the trip earlier and remained on the bus. Less passengers means a higher case for it to be withdrawn.