The National Transport Authority has raised concerns over the viability of the Free Travel Scheme on public transport after warning last year that it is underfunded annually by over €42m.
The NTA has claimed that fare-paying passengers have effectively been subsidising the cost of the FTS for most of the past decade through rising fares.
Documents obtained under the Freedom of Information Act show a report prepared by the NTA last September warned the Government that a planned expansion of regional bus services might not go ahead unless significant extra funding was made available for the FTS.
“Most immediately at risk are new services planned for medium-sized towns, including Carlow, Letterkenny, Ennis, Wicklow, Mullingar, and enhanced services in Dundalk and Drogheda,” said the NTA.
The Department of Employment Affairs and Social Protection funds the FTS, which was established in 1967 by Charles Haughey, for those aged 66 and over, as well as individuals with certain disabilities for use on public transport such as services run by over 80 private operators.
More than 976,400 people currently have a free travel card, with the figure increasing to 1.6m when companion cards are included.
Excluding Expressway routes, the NTA said FTS funding for the four main operators — Dublin Bus, Bus Éireann, Iarnród Éireann, and Luas — was frozen at €51.63m between 2011 and 2018. The figure increased to nearly €57m last year.
The NTA said it was facing a difficult choice of curtailing an expansion of public transport services at a time of growing demand or increasing fares unless the FTS contributed its fair share of the funding.
“In total if we allow for bus market opening, Local Link operating costs, fare increases, and passenger journey growth, the total additional funding requirement for 2020 is €42.39m,” said the NTA.
FTS card holders account for 45% of passengers on all Local Link rural bus services.
The NTA report said there was “a compelling argument to be made that the time has come for a properly funded free travel scheme”.
FTS passenger numbers between 2011 and 2018 increased by 10m, to just over 48m — an increase of 24.6%.
The NTA said the operators had suffered a large deficit as they had received no extra payment for these additional passenger journeys.
“Transport operators cannot continue to absorb the additional costs associated with carrying additional passengers. It is now time that the operators were properly compensated for carrying FTS passengers and that fare-paying passengers and PSO funding is not used to fund the FTS,” said the NTA.
A spokesperson for the department said the total budget allocation for the FTS, including private operators and cross-border services, had increased from €77m in 2016 to €95m last year. This year’s allocation is also €95m.
It is understood the largest share of the increase in recent years was apportioned to private bus firms.
The FTS payment is generally 60%-70% of the normal full fare.
The NTA pointed out the average revenue paid by the department per FTS passenger on the four main public transport services in 2011 was €1.36 but this had fallen to €1.08 by 2018. At the same time, the NTA said the public service obligation (PSO) subsidy to the three CIÉ companies in 2018 was 8.3% below 2011 levels.