Paul Holmes pushes Government to refund Chesterfield

4.29.08pm BST (GMT +0100) Tue 6th Apr 2010

Paul Holmes, Liberal Democrat MP for Chesterfield, today wrote to John Denham MP, Secretary of State for Communities and Local Government to ask the Government to repay Chesterfield Borough Council the shortfall in funding it has suffered over the last two years as a result of the Government's failure to fund the Concessionary Bus Fares Scheme properly.

Over the last two years, the underfunding of the concessionary scheme in Chesterfield has led to a £3.2 million shortfall - 11% of the Council's budget. Chesterfield Borough Council has had to make up this shortfall from its own reserves which had been set aside for local services and by making 35 council workers redundant.

In December 2009, the Audit Commission found that the Council "manages its finances soundly". However, "the unexpected cost of providing free bus travel through the concessionary bus fares scheme has had a significant impact on the Council's ability to deliver its plans to develop services. It has forced the council to make further savings to balance its budget…and it will either need to make further cuts or take money from its reserves."

In March, the House of Commons resolved to allocate Chesterfield Borough Council an extra £1.84 million in Special Grant funding needed to pay for the Concessionary Bus Scheme for the year ahead. However, this is not extra money and does not repay the Council for the shortfall from the last two years.

Chesterfield Borough Council is therefore making a claim to the Government under the 'historical anomalies' procedure for the £3.2 million it has had to spend from its reserves over the last two years to make up for the Government's short-funding.

"Just last month, the Minister for Transport, Sadiq Khan admitted that the Government had got its figures wrong and that Chesterfield needed £1.84 million more to fund the bus scheme for the year ahead.

"Given that Ministers now accept they got their sums wrong, it seems iniquitous that CBC should have to carry the very large loss of £3.2 million (11% of annual budget) from 2008-2010. Just over half of this came from Council reserves and should be returned there. The rest can be put to good use on the services that Chesterfield people elect their Council to deliver.

"The Government needs to accept the consequences of its mistake and give Chesterfield its money back."