“Unfair” Cycle to Work scheme “problems” need to be addressed, admits government minister

The Labour government has admitted that it “absolutely recognises” there are “problems” with the current Cycle to Work scheme, which MPs have claimed is “unfair” and excludes people on low incomes from buying a bike or taking up cycling.

Simon Lightwood, the current Parliamentary Under-Secretary of State for Transport, made the admission that Cycle to Work – which has been the subject of criticism from both active travel campaigners and cycling retailers in recent months – needs to be addressed during Thursday’s transport questions in the House of Commons.

In September, cycling and walking charity Sustrans published a report which found that 38 per cent of people in the UK on low incomes or in unemployment (or around 1.9 million people) are currently priced out of buying a bike due to the high costs and lack of discounts available.

> Almost 2 million people on low income or not in employment want to cycle, but are “effectively excluded” due to high costs and lack of discounts like Cycle to Work, finds Sustrans research

Introduced in 1999, the UK government’s Cycle to Work employee benefit scheme offers a tax-friendly initiative which enables people to buy a bike and cycling accessories through salary sacrifice.

However, the initiative excludes anyone who would earn less than the minimum wage of £17,000 a year once the salary deductions are taken into account, as well as those who are not in work, self-employed, or work for a non-participating employer.

The consequence of the scheme’s minimum entry point, Sustrans pointed out, is that just 30 per cent of people on a low income or not in employment have access to a cycle. On the other hand, data from Sustrans’ Walking and Cycling Index found that 59 per cent of people in professional occupations have access to a bike.

To help mitigate this disparity, Sustrans has suggested the introduction of a voucher scheme offering a 40 per cent discount on new bike and accessory purchases for people on low incomes, which would work in parallel with the current Cycle to Work initiative and, the charity argues, reduce the burden on the NHS, cut the number of sick days taken across the UK, improve access to work and education, and boost the local economy.

> Can 50% of Brits really not afford to buy a bike? Cycling and affordability discussed

Today in the House of Commons, the SNP MP for Aberdeenshire North and Moray East Seamus Logan asked transport minister Simon Lightwood what the Labour government was doing to address the concerns highlighted by Sustrans.

“The brilliant Cycle to Work scheme runs across the four nations of the islands, but under current rules, it can’t be used if you earn less than £17,000 a year,” Logan said.

“This is almost certainly contributing to the fact that only 30 per cent of people on lower incomes have access to a cycle compared to 59 per cent on higher incomes, that’s almost double.

“Various solutions have been proposed, including Sustrans’ suggestion of a voucher giving 40 per cent off the cost of a cycle.

“Can the minister do anything to address this unfair situation and help our national governments to support people on lower incomes who would like to be able to take advantage of the Cycle to Work scheme?”

Simon Lightwood (Official portrait, UK Parliament)

Responding to the question, Lightwood, the MP for Wakefield and Rothwell, said: “I absolutely recognise the problems that we have with that scheme and will be working closely with our colleagues in the Treasury regarding that.

“I was delighted to be at the launch of the report by Sustrans in the Palace [of Westminster] a couple of weeks ago and will be paying careful attention to the recommendations that they have placed in that report.”

> Almost half of British people can’t afford to buy a bike – and a quarter say it would take at least six months to save for one, new research for Cycle to Work Day finds

Announcing the publication of their report into “cycling inequality” last month, Sustrans CEO Xavier Brice said: “A new UK Government brings new opportunities. Their focus on the economy, opportunity and health is critical, and integrating transport with walking, wheeling and cycling must be a part of this. To include those at all economic levels in this is a priority, or we risk leaving two million people to the dangers of transport poverty.

“The UK has 11.7 million people earning less than £17,000 per year or not in employment. People in this group are much less likely to have access to a car compared to the general population. For those who do, rising costs are making it unaffordable to run.

“The opportunity to get more people cycling is right here for the taking. The Cycle to Work scheme has existed for 25 years. Why shouldn’t the same opportunities be extended to the people that need it most – now?

“Using the Cycling Opportunity voucher scheme, we can tackle this inequality together and enjoy the benefits together too; for our bank accounts, our NHS and our environment.”

> "Cycle to work schemes are sucking the lifeblood out of cycle shops": Bike shops tell Parliamentary Committee of "need for urgent systemic change" to Cycle to Work scheme

While Sustrans have suggested the creation of a scheme parallel to Cycle to Work, the initiative itself has come under strain over the past year, after senior figures from the cycling retail world met with MPs in January to make their case about the “need for urgent systematic change”.

The meeting came two months after the Association of Cycle Traders and bike shops hit out at one of the scheme’s main providers, Cyclescheme, for deciding to prevent retailers from charging additional fees on bikes purchased using the scheme, a move described by the representative of independent cycle retailers as the “straw that broke the camel’s back”.

“The ACT is calling for a collaboration of everyone in the cycle industry to work together to reform Cycle to Work as the priority growth strategy for the cycle trade and to increase cycling for all,” the association’s director Jonathan Harrison told the All Party Parliamentary Group for Cycling and Walking earlier this year.

Highlighting challenges for retailers with the current operation, he added that the scheme is too complicated: “Typically, the employer pays for the voucher, the provider owns the bike, the worker hires the bike, the voucher is paid back via salary sacrifice and there is often a misinterpretation around ownership and many users never truly understand how the scheme actually works.

“The end of the initial hire period is another area of complication which needs reviewing. Typically, workers enter an extended hire period after salary sacrifice finishes. During the extended hire period the bicycle was still owned by the provider, with some providers charging fees providing an additional source of income whilst others do not. Often these fees come as a surprise to the end user.”

Most importantly, Harrison suggested that the scheme no longer fits the purpose for which it was originally intended – to get people cycling to work.