The Travel Concession Schemes Regulations 1986

5.—(1) Subject to regulations 4 and 12, and to paragraph (2) of this regulation, reimbursement arrangements adopted by an authority shall be so formulated that the costs to operators of providing concessions are met by the payments made by the authority to operators pursuant to section 93(6) of the Act.

(2) In paragraph (1) of this regulation, the reference to the costs to operators of providing concessions is a reference to the aggregate of—

(a) the revenue by way of fares which the authority calculate that the operator has foregone or estimate that he will forego in consequence of the provision of the concessions in question, less any additional revenue from fares which they estimate he has received or will receive by reason of the availability of the concessions; and

(b) any costs additional to basic operating costs which the authority calculate that the operator has necessarily incurred or estimate that he will necessarily incur in connection with providing concessions, less any reduction in basic operating costs which they estimate that he has achieved or will achieve by reason of the availability of the concessions.