Funding and Implementation - Total Mobility Scheme Review

The Total Mobility Scheme

5. FUNDING AND IMPLEMENTATION OF THE PROPOSED POLICY FRAMEWORK

5.1 Implications for Local government and Land Transport NZ

Local government engagement and support is pivotal to the successful implementation of any improvements to the Scheme. The proposed policy framework outlined in this report clearly positions the Scheme as a local government responsibility, consistent with their responsibilities in the provision of public transport. All of the recommendations have significant impacts for local authorities, and if these are to be acceptable, they will need to be supported by a significant funding increase to the Scheme from central government.

It has been made very clear from local government representatives (and officials) that they have significant concerns about the current funding of the Scheme. Some have called for a considerably more generous central government contribution while others have argued that central government should accept full financial responsibility for the Scheme. A recent meeting of regional council chief executives (May 2005) expressed a strong concern about unsustainable "exponential" growth in the regional council share of funding. They were also critical that the issue of "who should pay for the Scheme" and "why" had not been addressed by the Review, and considered the Scheme was a central rather than a local government responsibility. It should be noted however, that while the Scheme is a high cost service and growth has been steady, it has not been exponential.

The recommendations contained in this report also have significant resource implications for Land Transport NZ. They assign Land Transport NZ a key role in providing the necessary leadership, co-ordination and funding to implement these recommendations.

5.2 Changes to the Financial Assistance Rate (FAR)

The Financial Assistance Rate (FAR) for the Scheme will need to be increased to implement the recommendations contained in this report. Table One below recommends phasing staged increases to the FAR to implement the recommended improvements.

These phases will be further described under each of the recommendations below. It should be noted that the costs of implementing the recommendations are based on estimates, and that these are subject to significant data deficiencies. Further details about the estimated costs linked with each recommendation are shown in Appendix 10. This table also assumes that the funding allocation to the Scheme by local authorities will remain at current levels, and that they will be prepared to implement the improvements sought by government at the increased FAR.

5.3 Recommended Improvements

gg)For those local authorities that implement specified recommended changes to the Total Mobility Scheme as outlined in section 5.2, central government (through Land Transport NZ) will increase its share of funding responsibility for the Scheme to 50%. This is subject to local authority funding to the Scheme not falling below budgeted 2005/06 levels. This increase to a 50% FAR will be effective for the current financial year (2005/06).

This recommendation is shown as phase one on Table One above. Phase one provides for an increased FAR of 50% effective from 1 July 2005, to align the FAR with that which applies to the patronage funding Scheme⁵². This increase would apply to all local authorities operating the Scheme, and who agree to implement specific immediate improvements with regard to the Scheme purpose, eligibility and some aspects of entitlement. These are:

• To agree to the recommended purpose statement (recommendations a, b and c). Agreeing to the purpose statement requires a commitment to implement a series of future improvements to the Scheme in order to give it proper effect.
• To agree to implement the recommended eligibility criteria (recommendation d).
• To agree that people with impairments who meet the criteria for the Scheme, and are able to use bus, train or ferry services some of the time, but not all of the time, are eligible for the Scheme (recommendation e).
• To agree that people who meet the criteria for the Scheme and have an impairment that has lasted or is expected to last for six months or more, are eligible for the Scheme (recommendation f).
• To agree that children with impairments who meet the criteria for the Scheme will be accepted on the Scheme (recommendation g).
• To agree that people who live in residential care who meet the criteria for the Scheme will be accepted on the Scheme (recommendation h).
• To agree that the fare subsidy for the Scheme will be 50% (recommendation j).
• To agree that the Scheme will have no minimum fare threshold (recommendation k).
• To agree that there will be no restrictions on the purpose of the trip for the Total Mobility Scheme (recommendation o).

This increased financial assistance rate would provide additional support until the commencement of the second phase. It also signals government commitment to improve access and mobility for the transport disadvantaged, and to the NZ Disability Strategy.

hh)For those local authorities that implement specified recommended changes to the Total Mobility Scheme as negotiated with Land Transport New Zealand, central government (through Land Transport NZ) will increase its share of funding responsibility for the Scheme to 60%. This is subject to local authority funding to the Scheme not falling below budgeted 2005/06 levels. The increase to a 60% FAR will be operative commencing in the 2006/07 financial year.

Phase two provides for an increased financial assistance rate to 60% subject to local authority agreement to implement further improvements to their respective schemes. It is proposed that local authority funding to the Scheme does not reduce below the budgeted 2005/06 levels. This phase will assist all local authorities implement most of the recommendations except two (i and z) which relate to increasing the coverage of the Scheme.

ii)A further increase in the FAR, or an alternative incentive will be available for those local authorities that implement some targeted promotion of the Total Mobility Scheme, and extend coverage to people who live in areas without access to public transport, as negotiated with Land Transport New Zealand. For those local authorities, central government (through Land Transport NZ) will increase its share of funding responsibility for the Scheme. The increase will be operative commencing in the 2007/08 financial year.

This recommendation, shown as phase three on Table One provides for an increased FAR or an alternative incentive for local authorities to undertake some targeted promotion of the Scheme (recommendation z), and to extend coverage to people who live in areas without access to bus, train or ferry services (recommendation i). As each local authority is at a different starting point, some will be ready to implement these recommendations before other local authorities. Those local authorities which are in a position to implement these two recommendations (whether fully or partially), and have negotiated an appropriate implementation plan with Land Transport NZ, should be eligible for an increased FAR or an alternative incentive for the Scheme.

At this time it is not prudent to recommend increases in the FAR above 60% until estimates can be undertaken using more reliable data. Potentially up to 29,600 additional people become eligible for the Scheme, although it is highly unlikely that all will choose to join (if they know about it). Table One assumes that 24,000 additional people will become members of the Scheme as a basis for estimating costs. Promotion of the Scheme undertaken during this phase should be carefully targeted and the effects closely monitored. This will provide additional information to improve estimates regarding potential numbers of new members and associated costs.

Phase four is not recommended at this time, for two reasons. Firstly local authorities are not in a position to fully implement recommendations that will lead to significantly increased members on the Scheme. This could potentially overwhelm the current structure of the Scheme. Secondly, it is unclear as to the number of potential members that may choose to join the Scheme, and the level of funding that could be necessary. The figures shown on Table One are indicative estimates only, and should be recalculated at a future time when more reliable data becomes available.

The estimated costs that are associated with phase four significantly increases current Land Transport NZ spending on the Scheme. This very rough estimate assumes that 64,000⁵³ additional new members will be accepted into the Scheme, and that these members will use the Scheme to the same level as other Scheme members. It is highly likely that the estimated increase in numbers is overstated, as many people will choose not to use the Scheme, even if they know about it.

The recommended improvement to promote the Scheme (recommendation z) is estimated to significantly increase costs to the Scheme, more than any other single recommendation. Nonetheless it should be a priority recommendation over extending coverage of the Scheme to people who are currently not eligible (recommendation i). It is difficult to justify extending the eligibility criteria to a new group, before ensuring that current eligible members are aware of the Scheme and using it if they choose to do so.


Footnotes:

47. Source of funding estimates: Land Transport New Zealand. Estimates are based on expenditure for 2005/06, and do not take into account the $450,000 average per annum growth in total expenditure on the Scheme that may need to be factored into final funding forecasts.
48. This is the real cost, and excludes any rebate via the FAR. It is assumed that local authorities would agree to maintain at least the same level of expenditure on Total Mobility as present.
49. Land Transport NZ has allocated $3.86 million for the Scheme (including funding for wheelchair hoist replacement) for the 2005/06 financial year.
50. This figure does not include costs related to the replacement of wheelchair hoists ($190,100 in the 2005/06 financial year). The replacement of wheelchair hoists currently attracts a 60% FAR.
51. This may be achieved either through an increased FAR or an alternative incentive.
52. The patronage funding Scheme has an average FAR 50% in 2005/06.
53. This is based on the fact that while there are approximately 43,000 members on the Scheme, this could potentially increase to108,000 eligible people. This is a very rough estimate based on data provided by Statistics New Zealand (see Appendix 8).

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