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Sink or swim for budgets
Local Government Chronicle – 9 April 2009

Free swimming has started, a year after free bus travel began. Both concessions command wide support but some councils face ruinous bills, says Mark Smulian

Should a council throw its hands in the air, or bury its head in them, when an elderly resident catches a bus to a swimming pool, has an invigorating dip, takes another bus to the shops, then a third home?

And when someone aged under 16 goes swimming does a council congratulate itself on reducing obesity - and perhaps antisocial behaviour - or cast a worried look at its coffers?

It's a year since the implementation of free bus travel throughout England for people aged over 60 and those with disabilities, and this anniversary has coincided with the launch of free swimming for those aged over 60 or under 16.

The only change made so far came last week, when the government exempted from free travel some tourist and longdistance services, and buses that serve park-and-ride sites.

Although ostensibly unrelated, the 212m bus travel and the 140m swimming scheme raise the same issue - both are concessions made by central government but delivered by councils, and both have been funded by Whitehall through complex mechanisms that cause alarming local anomalies.

There is wide agreement that while both concessions are desirable, the argument is about who pays.

Free bus travel for elderly people hits a number of targets dear to many local area agreements.

It helps to reduce social exclusion, car travel and older people's enforced dependence on others.

Swimming for free has obvious benefits for fitness in both this and the under-16 age groups, and in the latter may also be a useful diversion from undesirable behaviour.

In both cases the scheme rules are set nationally, but they are paid for locally out of centrally distributed grants, which is where the financial problem arises.

Councils are liable to reimburse bus operators for all free journeys made in their area regardless of where the passenger concerned lives.

Thus, people might travel from a dozen districts into a regional retail centre, but while each passenger's council will pay for the outward journey, the council at the retail centre pays for all the return ones.

A similar effect happens with swimming, where the money was allocated among councils on a per-head basis regardless of whether they had any swimming pools, with the result that councils that own pools fear an unaffordable influx of swimmers from neighbours.

The Local Government Association convened a meeting in January attended by 59 councils which had lost money from the bus scheme.

Information gathered showed that 20% of councils expected a shortfall for 2008-09, and for at least 10 this would exceed 1m, with the situation expected to worsen for 2009-10.

LGA regeneration and transport board chair David Sparks (Lab) says: "The establishment of concessionary fares has been a major success for the majority of councils and recipients.

"However, there are still major problems over the methods used for the allocation of government subsidy.

"Some local authorities are massively out of pocket and a solution needs to be identified as a matter of urgency to enable the scheme to function viably in the long term."

Among the worst affected is Brighton & Hove City Council , which is vulnerable both as a retail centre and as a popular resort to a huge number of journeys by non-residents.

A council spokesperson said the shortfall would be some 1.8m, lower than expected but only because last summer's poor weather deterred visitors.

"With tourism a key part of our city's economy, the move to funding all journeys that start in the city could have repercussions for us with more people holidaying at home during the recession," he says.

"Our budget for 2009-10 allows for a significant increase in journey numbers. "We hope that the government's promised review in 2011 will take into account the burden being placed on our taxpayers."

Norwich City Council was similarly hit. Deputy leader Brian Morrey (Lab) says: "We had budgeted 500,000 for free bus travel, but it has cost us 1.5m. We've been very seriously affected because of the numbers of people that come in to Norwich as a regional centre. It's us that has to pay for their return journeys."

There have been complex disputes in some areas as to how bus companies record the number of free journeys made, and whether their claims for reimbursement by councils have been improperly inflated.

But Cllr Morrey says Norwich has faced this huge cost on the basis of figures provided by independent bus monitors that the council has no reason to challenge.

"It's not bus operators trying it on, the problem is the way the government distributed the money," he says. "Norwich has taken 1m out of the budget for this, so there are other things we now cannot do." Its experience with buses has led Norwich to refuse to offer free swimming - which unlike free buses is optional for councils that do not mind the local political flak that could arise from rejecting it.

This means it does not get the government grant involved. Cllr Morrey explains: "We've refused because Broadland has no pools, so we would have to pay for all the people from there that wanted to use ours. Instead, we're offering discounts for our residents.

"Both concessionary fares and free swimming are good ideas, and if they just looked at redistribution for councils in our position it would not be a problem."

A Broadland District Council spokesman says the council has shared its swimming grant among _its other neighbours, though their pools are less conveniently located than those in Norwich _for some residents. "We understand that Norwich City Council is not taking part and we have no such arrangement with them," he said.

Neighbour use poses a problem for Islington Council, which feels it is being accidentally penalised for past good performance and has been unable to secure sufficient contributions from other councils.

It already offers free swimming to older people, so that is not an issue. But executive member for leisure and culture Ruth Polling (Lib Dem) explains: "The problem is under 16s, we have successfully encouraged large numbers of them to swim by offering pool admission at very reduced rates."

Islington will thus lose its income from this charge, just as it expects a surge in usage of its four pools by residents of neighbouring boroughs, where swimming opportunities are limited. But Islington's population is relatively low, so it loses out on a swimming grant allocated on a per head basis, rather than per pool.

Cllr Polling says: "We will get about 96,000 in grant but we will lose up to 380,000 through the loss of the reduced entry fee income and the cost of employing more staff to cope with increased use."

This factor led Basildon District Council to refuse to offer free swimming. Leader Malcolm Buckley (Con) also notes that the government grant lasts only two years and "we would have taken the blame for ending it after that, or would have had to pay for it ourselves". He adds: "If the government wants us to do this it should fully fund it."

According to the government 80% of English councils have taken up free swimming for over-60s and 200 for under-16s.

Hartlepool Borough Council is full of enthusiasm for free swimming, but even so had nervous moments. Cabinet member for leisure and culture Victor Tumilty (Ind) says: "The finance was not clear when we decided to go ahead, we didn't so much dip a toe in the water as put both feet in and just hoped we'd find the bottom. "We're doing it to promote health, and in the case of older people we may get some saving on adult care if they are fitter, while for under 16s we saw it also as a contribution towards reducing anti social behaviour by giving them something to do to stop hanging around in the streets."

Hartlepool will get 111,000 in grants and its local primary care trust has made up a 10,000 shortfall, says sport and recreation manager Pat Usher. She estimates that free swimming will add some 25,000 visits to the 200,629 made last year to the council's pools, but says this is manageable within current staff numbers.

The LGA's first rough estimate on swimming shows that on average costs will exceed grant by 18% for over-60s use, and by 34% for under-16s.

Its culture, tourism and sport board chair, Chris White (Lib Dem), says: "The ring-fenced grant ends in two years' time, and the danger is that if the government does not continue to fund it, councils will have to. "This is like the bus scheme, a good idea but why couldn't they have talked to us before?"

The government has indicated that it will shift responsibility for free buses from districts to counties, which would at least spread the costs across a larger base.

Money unclaimed by councils that have opted out of free swimming could be redistributed to those in difficulty, but this will be at best marginal.

Next time the government has a bright idea, councils hope it will engage with them before it decides how to finance it.