- Kable, Thursday 17 December 2009 11.47 GMT
Transport minister Lord Adonis said that the funding will be available to Greater Manchester, West Midlands, Tyne and Wear, Merseyside, South Yorkshire, West Yorkshire, Nottingham, Leicester and Bristol.
The funding will be provided through the government's Smart and Integrated Ticketing Strategy, published on 15 December 2009. This sets out a goal of introducing smart ticketing in major urban areas in England by 2015 and in every area of England by 2020.
The government estimates that integrated smart ticketing, where a ticket is stored on a microchip, on a smartcard, or in future a phone or bank card, and can be used across different modes of transport, could save taxpayers and private transport operators more than £1bn per year.
The strategy follows a consultation exercise, as well as an examination of integrated ticketing's use in Hong Kong, Chicago, Lyon and London's Oyster scheme.
A team within the Department for Transport will consider whether to introduce a national pre-pay scheme, as well as providing ongoing support to new and existing schemes and facilitating the sharing of best practice.
The document says that the ITSO (Integrated Transport Smartcard Organisation) specification will be key to the strategy, by providing interoperability between schemes and a technical toolkit.
Transport operators will be receive an additional 8% on their Bus Services Operator Grants for buses to be equipped with ITSO smart ticketing equipment. The document says will be worth about £800 a year for each bus.
The government is funding a £60m ITSO on Prestige (IOP) project which will enable London's Oyster system to read ITSO smart tickets. The government has also required that from April 2010 London Freedom Passes should be re-issued as dual Oyster-ITSO passes, providing £5m to cover the additional costs.
Lord Adonis said: "The benefits of smart ticketing to passengers are clear – quicker, easier and potentially better value journeys on trains, buses and trams, whichever company runs the service. We could even see the death of the paper ticket as direct payment and mobile phone technology picks up pace.
"If passengers had smart tickets they'd almost certainly use public transport more. That's why I'm incentivising bus operators to make our vision of universal coverage of smart ticketing in England a reality and why we'll continue to require ITSO smart ticketing in rail franchises."
