75. During this inquiry there have been membership changes on the Committee—

    • Edward Mountain replaced Dean Lockhart as Convener.

    • Ash Regan replaced Natalie Don as a Committee Member.

    • Fiona Hyslop resigned as a Committee Member on 14 June 2023.

76. The Committee thanks all former Members for their contribution to the inquiry.

77. At our meeting on 15 March 2022, the Committee agreed to undertake an inquiry into ferry services.ⁱNet Zero, Energy and Transport Committee, Minutes, 15 March 2022 The Committee had been referred Petition 1872: Improve the reliability of island ferry services which said the unreliability of ferries has resulted in losses to island economies relying on tourism and in travel restrictions for island residents, who need reliable and regular services.

78. The Committee agreed the petition was important but noted there were concerns with island connections beyond those covered by the petition. We also noted the ten-year Scottish Ferries Plan (discussed below) was coming to an end, and this provided an opportunity to take a fresh look at the issue and to make recommendations. We agreed to take a comprehensive look at ferry services and to launch an inquiry into current and future ferry provision in Scotland.

79. After an evidence session where we heard from representatives of community groups, and shared a draft remit with them, we agreed a final remit for our inquiry.ⁱNet Zero, Energy and Transport Committee, Meeting Papers, 28 June 2022 This was drawn deliberately widely, to enable us to look at the whole issue of services for ferry-dependent communities in the round, with nothing off the table and with a focus on the future and on sustainability: both sustainable communities and sustainable transport.

80. A call for views took place over the summer of 2022, with just under 400 responses. People and groups have continued to provide the Committee with information and views throughout the inquiry.

81. Over 12 oral evidence sessions, we heard from private operators, business representatives, trade unions, ferry experts and academics, local authorities, ferry operators, including private operators, Caledonian Maritime Assets Limited (CMAL), and the Scottish Government. A full list of the evidence sessions is available at Annexe A.

82. We also made visits to Arran and the Western Isles to experience ferry services and hear people's views. In June 2022, some Committee Members visited Orkney. This was in relation to other business but the delegation took the time to discuss the state of local ferry services with the Council while there. This was instrumental in helping the Committee determine that Council-run ferry services should be within the inquiry remit. The Convener then made a follow-up visit to Orkney during the inquiry.

83. We also held online engagement events with—

    • Members of the Scottish Youth Parliament, including the Transport, Environment and Rural Affairs Committee; and

    • Residents of island communities around Scotland.

84. Summaries of the themes discussed at these events are available in Annexe C and D.

85. We wanted this to be an inquiry with community need at its heart. We are therefore grateful to have received so many submissions from people and groups who use ferry services, alongside a wide variety of other stakeholders. We are also grateful for the hospitality and assistance received during visits to island communities and to those who gave up their time to share their lived experiences with us in our engagement events. These added depth and important context to the evidence received in written format and in Parliament. We are especially grateful for engagement of this level in the context of the "consultation fatigue" reported by many ferry-dependent communities.

86. The key message of this inquiry from service users is that ferry services are not good enough and need to change.ⁱNet Zero, Energy and Transport Committee, Official Report, 1 November 2022, Col 13, Official Report, 8 November 2022, Col 5, 6 and 7, and Official Report, 31 January 2023, Col 4 This message is not just about "delivery", in the sense of reliable services, standards of service, customer relations, ticketing and so on, vitally important though these are. It is also about truly prioritising the needs of ferry-dependent communities, listening to them, restoring trust between users and providers, and putting all this at the heart of our ferry services.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 6. Any new vision for ferries and island connectivity must be based on meaningful engagement with communities by the Scottish Government.

87. The then Minister for Transport acknowledged "we now have to reform how ferry services are delivered in Scotland, but with the guiding principle that our island communities have to be part of what comes next."ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 36

88. Overall, dissatisfaction is high, particularly in relation to services along the western seaboard. In some communities, people have spoken of a feeling of being abandoned. Many council-run services are also viewed as being close to breaking point.ⁱNet Zero, Energy and Transport Committee, Official Report, 8 November 2022, Col 3 An overview of how lives and communities have been affected by the current standard of service would include—

    • Education and young people;

      • Missed school hours;ⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 26 and written submission from Mull and Iona Ferry Committee (declining weather). This was also an issue raised on our visits and at engagement events.

      • Lack of access to extra-curricular activities;^viWritten submissions from Jack White, Chrisina Brown, and Lewis and Harris Sports Council. This was also an issue raised on our visits and at engagement events.

    • Health, families and caring;

      • Disrupted attendance at medical appointments on the mainland or another island;ⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 3, 4 and 7. This was also an issue raised on our visits and at engagement events.

      • Lack of reliability causing anxiety and mental health issues;ⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 4 and 5 and Official Report, 31 January 2023, Col 35. This was also an issue raised on our visits and at engagement events.

      • Inability to reliably care for relatives and friends, disrupted end of life care; having to miss funerals;^viWritten Submission from Mobility and Access Committee for Scotland. This was also an issue raised on our visits and at engagement events.

    • Business and workⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 3 and Official Report, 8 November 2022, Col 11 and 12. This was also an issue raised on our visits and at engagement events.

      • Impact on tourism: the cost of cancelled holidays and the chilling effect that unreliable services have on future bookings;ⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 3 and 4 and Official Report, 8 November 2022, Col 3, 4, 13 and 27

      • Transport requirements of the whisky industry and the impact on its growing needs;ⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 4 and Official Report, 8 November 2022, Col 3

      • Agriculture, fishing and seafood, for instance missing the crucial window to get livestock or perishable foods to market;ⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 3 and 7, Official Report, 8 November 2022, Col 5, and written submissions from Liam McArthur MSP, Highlands and Island Enterprise, Beatrice Wishart MSP, and NFUS

      • Renewable energy industry requirements;^viWritten submissions from Highlands and Island Enterprise and Beatrice Wishart MSP

    • Depopulation;ⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 7 and written submissions including from NFUS.

      • Inability to recruit people to live and work on islands^viNet Zero, Energy and Transport Committee,Official Report, 28 June 2022, Col 7 and Official Report, 8 November 2022, Col 10, 12 and 13 and written submissions including from Auchrannie Resort. This was also an issue raised on our visits and at engagement events., including on ferries;ⁱNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 36 and

      • Commuting becomes impossible leaving people no choice but to move.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 7

89. Above all, people living on islands or other ferry-dependent communities have emphasised that ferry services are existential: they are literally lifeline services, necessary for the community's survival. We heard warnings of a tipping point or spiral effect when consistently poor or unreliable transport connections can risk leaving previously flourishing and robust communities fragile and potentially unviable.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 8 and written submission from Mobility and Access Committee for Scotland

90. There is some good practice to build on. Some services are broadly reliable and largely retain the trust of the communities they serve. Islanders also recognise that ferry staff - many of them islanders themselves - are trying to do their best under difficult conditions. Ferry-dependent communities are not looking to return to any perceived 'golden age' and recognise change is needed. They have spoken to the Committee with authority and insight derived from everyday lived experience about what reshaped ferry services could look like. They have also shared their ideas about more radical solutions such as fixed links and about reducing the environmental impact of maritime travel. Engaging with service users on their positive proposals for change was the most rewarding part of the inquiry. Taking our cue from them, we want this to be a forward-looking report.

91. As discussed later in the report, some progress has been made since 2021 with an acceleration of investment, new vessels with more being currently procured and built, and infrastructure upgrades all welcome developments in the last few years.

92. Service users' needs are straightforward although, starting from where we are right now, this does not necessarily mean that they will all be easily deliverable. They want services that—

    • Are reliable;

    • Are resilient and flexible;

    • Provide sufficient passenger and vehicle capacity;

    • Charge reasonable fares;

    • Are environmentally sustainable and future proofed, in terms of new technology and climate change;

    • Are easy to use;

    • Are accessible to the whole island community, including children and young people, older people, or people with disabilities; and

    • Are "listening services", with usable, trusted channels for dialogue between users and providers, with capacity to respond to reasonable requests. Many service users also wanted partially devolved decision-making to be a feature of future service provision.

93. We have kept these needs in mind throughout the inquiry and they have helped determine the content of this report.

94. The report is in three parts—

    • A brief factual overview of Scotland's ferries, recent relevant scrutiny by Scottish Parliament committees, and Scottish Government ferry plans.

    • The next section seeks to understand and measure what has gone wrong, focusing particularly on the current main reason for public concern about ferries: unreliable services, unavailable boats and cancellations.

    • The final section discusses vessel requirements; and how services could be better configured in future, asking what needs to change and in what way. It is the most important and therefore longest part of the report.

95. Ferry services in Scotland are delivered by a variety of bodies. The majority of these are publicly run services delivered by the Scottish Government and local authorities. Private operators and community groups also run several ferry services.

96. The Scottish Government currently supports ferry services in the Clyde and Hebrides and to the Northern Isles.

97. Most Clyde and Hebrides ferry services, and most services linking the Scottish mainland and Northern Isles are specified, let, and funded by Transport Scotland. Multi-year contracts for the provision of these services are awarded following competitive tendering exercises. The current operators are—

    • CalMac Ferries Ltd (CalMac): A subsidiary of David MacBrayne Ltd, a company wholly owned by the Scottish Ministers, which provides ferry services to the 22 islands and four peninsulas on the Clyde and Hebrides. The current contract runs between October 2016 and October 2024.

    • SERCO NorthLink: A subsidiary of Serco PLC which operates ferries between the Scottish mainland and the Northern Isles. The current contract runs between June 2020 and June 2028.

98. CalMac is part of what is known as the tripartite arrangement, a term used to describe current organisational structure for CHFS delivery. The three points of the triangle are the Scottish Government itself in the form of Transport Scotland (who report directly to the Scottish Government), CMAL, a company wholly owned by Scottish Ministers and CalMac.

99. Ferries for both the Clyde and Hebrides and Northern Isles services are owned not by the operators but by CMAL. CMAL also leads on the procurement of new vessels. It owns 37 ferries, 32 leased to CalMac and five to Serco NorthLink. CMAL also owns 16 Clyde and Hebrides harbours and owns or leases properties and port infrastructure at 10 other Clyde and Hebrides locations.

100. The current Clyde and Hebrides Ferry Service (CHFS) contract requires the operator to provide the specified services using vessels leased from CMAL. This requirement extends to using specified new vessels procured by CMAL, as and when they become available for use. This can be contrasted with the Northern Isles Ferry Service (NIFS) contract and rail service contracts where more flexibility over the stock used is available provided specified outcomes are delivered.

101. Inter-island services within Orkney and Shetland are also public services, provided by the two island councils, rather than under the tripartite arrangement. (This is further discussed in the Council-run ferry services section of this report). Argyll and Bute and Highland Councils also operate some ferry services. This includes the Corran ferry service on Loch Linnhe (run by Highland Council) which has run into crisis during the lifetime of this inquiry. There are a number of private sector operators, of which two - Western Ferries (Gourock-Dunoon) and Pentland Ferries (St. Margaret's Hope to Gills Bay) - run vehicle ferries.

102. All ferry services in Scotland are within the ambit of this inquiry, with a particular focus on those providing lifeline services to communities. The remit allowed us to reflect on whether private ferry companies, as well as overseas services, potentially offer any useful lessons for public sector ferry provision.

103. The Scottish Parliament's session 5 (2016-2021) Rural Economy and Connectivity (REC) Committee concluded an inquiry into Construction and Procurement of Ferry Vessels in Scotland in December 2020.ⁱRural Economy and Connectivity Committee. 12th Report, 2020 (Session 5). Construction and procurement of ferry vessels in Scotland. (SP Paper 879) Its report made a series of recommendations to the Scottish Government on previous construction and procurement processes, with its main focus on the process around new Hulls 801 and 802, then under construction by Ferguson Marine. It made strident criticisms of many aspects of that process. More generally, it criticised—

     "a cluttered decision-making landscape that lacks transparency and where there have been varying degrees of failure by all of those with decision-making responsibilities, including the Scottish Government."ⁱRural Economy and Connectivity Committee. 12th Report, 2020 (Session 5). Construction and procurement of ferry vessels in Scotland. (SP Paper 879)

104. The report further called for a "root and branch overhaul of current decision-making structures" in order to—

     "...consider the relative roles and responsibilities of all bodies involved in decision-making around the procurement of new vessels and should also include an appraisal of whether each of these bodies should continue to exist or whether there is scope to streamline and simplify decision-making structures by merging or abolishing certain of them."ⁱRural Economy and Connectivity Committee. 12th Report, 2020 (Session 5). Construction and procurement of ferry vessels in Scotland. (SP Paper 879)

105. Hulls 801 and 802 remain uncompleted. In this session, the Public Audit Committee has recently held an inquiry into an Audit Scotland report on the delivery of Hulls 801 and 802. The impact of these two vessels being absent from service has understandably been raised in evidence to this inquiry. Other than that, we have sought to avoid replicating detailed scrutiny of this issue, except in the context of learning lessons for future procurement.

106. In December 2012, the Scottish Government published its Ferries Plan 2013-2022, which it described as the "first ever comprehensive review of ferry services in Scotland."ⁱScottish Government (2012). Scottish Ferry Services: Ferries Plan (2013-2022) In 2018, this was complemented by a Vessel Replacement and Deployment Plan.ⁱⁱScottish Government (2018). Vessel Replacement and Deployment Plan 2016 Some of the goals set out in the two Plans have been met. For example, there have been port and harbour upgrades, increased sailings to some islands, additional services added and some services were brought within the CHFS network.ⁱⁱⁱLetter from the Minister for Transport to the Committee providing further information following the evidence session - 31 March 2023 Since 2013, the Scottish Government has delivered three new small hybrid vesselsⁱie a vessel capable of running on more than one fuel source. as well as the MV Loch Seaforth in 2014 and corresponding upgrades to the harbours.ⁱⁱⁱLetter from the Minister for Transport to the Committee providing further information following the evidence session - 31 March 2023 Contracts have been awarded to Cemre Marin Endustri A.S in Turkey to build four ferries to include services to Islay, Jura and the Little Minch. These have been scheduled for delivery in October 2024 and February, June and October 2025.^vCMAL. Key Construction Milestones met for the MV Loch Indaal and the first of two Little Minch Ferries. 25 May 2023

107. It has not achieved—

     • Replacements for the MV Hebridean Isles, MV Isle of Arran and MV Isle of Mull; and

     • Replacement of small vessels (MV Isle of Cumbrae, MV Loch Linnhe or MV Loch Riddon).ⁱⁱA list of all the vessels within the CHFS and NIFS network, and their ages, can be found at Annexe F.

108. It was a broadly shared view in evidence to this inquiry that delivery of some aspects of the Ferries Plan in isolation, without the required levels of fleet modernisation, was a cause of current difficulties. An example of this is the introduction of the Road Equivalent Tariff (RET), a scheme designed to achieve parity of fares based on distance that has tended to make fares less expensive. Without the level of fleet renewal anticipated in the Plan, this has placed additional pressure on the network. It is estimated that by 2018, RET has increased network-wide passenger numbers by 11.6% and cars carried by 20.6%.^viTransport Scotland (2020). Evaluation of Road Equivalent Tariff on the Clyde and Hebridean Network Statistics produced by Transport Scotland have shown passenger, commercial vehicles and buses, and car traffic on subsidised ferry services have risen each year since 2015 (not including reductions caused by the COVID-19 pandemic in 2020 and 2021).^viiTransport Scotland (2023). Scottish Transport Statistics 2022. There is a detailed breakdown in Annexe G, H and I

109. An Audit Scotland report on Transport Scotland’s ferry services was published in 2017 and noted the lack of "Scotland-wide, long-term strategy" for ferry services and ports and harbours. It called for this to be created, including provisions for measurement and review, how it would contribute to National outcomes, assessment of long-term affordability and details of how spending will be prioritised across the whole ferry network.^viiiAudit Scotland (2017). Transport Scotland’s ferry services

110. The Ferries Plan will be replaced by an Islands Connectivity Plan (ICP). The change of name indicates a change of emphasis away from ferries alone to considering island transport in the round including, for instance, the possibility of bridges or tunnels, as well as onwards and connecting travel.^ixScottish Government (2022). Islands Connectivity Plan Long-Term Plan for Vessels and Ports on the Clyde & Hebrides and Northern Isles networks (2023 – 2045) – Draft for Consultation It was not possible to consider these issues in depth during this inquiry, but they are important and there are short discussions of the main points raised on fixed links and integrated travel later in the report.

111. The draft of the first part of the plan published for consultation makes clear it refers only to CHFS and NIFS.^ixScottish Government (2022). Islands Connectivity Plan Long-Term Plan for Vessels and Ports on the Clyde & Hebrides and Northern Isles networks (2023 – 2045) – Draft for Consultation We heard views from local authority representatives that, at this early stage in the Plan's development, there had been little engagement with council services.^xiNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 57 Instead, it appeared that the Plan's focus would be on CalMac routes. They told us that it would be "disappointing" for communities served by council ferries if the Plan took this "narrow" approach.^xiNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 57

112. The Scottish Government had previously indicated that the ICP would be in place by the end of the 2022.^xiiiScottish Government (2019). ISLANDS TRANSPORT FORUM Sixth meeting – 9 May 2019 Note of meeting This has now been delayed and a revised completion date has not been announced.ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 38 and Letter from the Minister for Transport to the Committee providing further information following the evidence session - 31 March 2023 The delay is regrettable given the clear need for change, but it has enabled more time for this inquiry, as it has been our working assumption that the right place to implement our report recommendations would be in the Plan.

113. The plan is being developed in stages. (See Annexe E for a timeline, as currently understood by the Committee.) The first consultation is on the Long-Term Plan for Vessels and Ports on the Clyde & Hebrides and Northern Isles networks (2023 – 2045).^ixScottish Government (2022). Islands Connectivity Plan Long-Term Plan for Vessels and Ports on the Clyde & Hebrides and Northern Isles networks (2023 – 2045) – Draft for Consultation This was prioritised "to give confidence that investments are being planned and actions are being taken".^ixScottish Government (2022). Islands Connectivity Plan Long-Term Plan for Vessels and Ports on the Clyde & Hebrides and Northern Isles networks (2023 – 2045) – Draft for Consultation There appear to have been further delays, with the consultation not yet fully public, despite an announcement from the Scottish Government that a full draft would be made publicly available in "early 2023". (In February, the then Minister for Transport, Jenny Gilruth MSP, told us consultation would start in April.)^xiNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 38 The draft was instead shared with selected stakeholders for early comment.

114. While everyone agrees that a new Plan, and a fresh start, is needed, we note views from the Chair of the Ferries Community Board, Angus Campbell, that "there is space for more community voices in the shaping of it" and he committed to feeding back any views heard on the ICP during his consultation work on Project Neptune.^xviiiChair of Ferries Community Board, Net Zero, Energy and Transport Committee, Official Report, 31 January 2023, Cols 41 and 42

115. Project Neptune is a Scottish Government-commissioned review of the institutional arrangements for management and delivery of the CHFS. The report was delivered to the Scottish Government in February 2022 and published in September. It is in two parts—

     • Part One - Governance, Internal Controls and Value for Money;^ixScottish Government (2022). Governance, Internal Controls and Value for Money - Part 1 - Project Neptune and

     • Part Two - Strategic Framework of Options for the Clyde and Hebrides Ferry Service Network.^ixScottish Government (2022). Strategic framework of options for the CHFS network - Part 2 - Project Neptune

116. On most of the key issues discussed later in this report, the Project Neptune review seeks more to clarify available options, and their potential benefits and disbenefits rather than making express recommendations. It says it is for Transport Scotland and its stakeholders to further evaluate these options, in consultation with ferry-using communities.^ixScottish Government (2022). Strategic framework of options for the CHFS network - Part 2 - Project Neptune Options were assessed for their ability to provide best value.^ixScottish Government (2022). Strategic framework of options for the CHFS network - Part 2 - Project Neptune

118. Some issues with ferry provision are historic, going back some years. However, there is a growing sense of a worsening problem with ferries in Scotland, particularly on routes along the western seaboard, that many communities have even called a crisis. A mass of evidence from individuals, businesses and community groups gave examples of services gone wrong, alongside suggestions of various possible root causes. These included age or design of vessels or lack of maintenance, more extreme weather, staffing issues, or a more precautionary approach to piloting. More fundamental issues such as a lack of strategic leadership, lack of investment, lack of accountability or lack of incentives or self-correcting mechanisms within the current tripartite system were also cited.

119. None of these appear to the Committee to be mutually exclusive: they might be mutually reinforcing. For instance, it has been suggested anecdotally that some cancellations formally attributed to "weather" might be a result of greater risk aversion, itself a possible product of ageing vessels.ⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 43

120. Recognising that disentangling all these factors to better understand the root causes would not be easy, the Committee nonetheless asked for, and sought to interrogate further, the official data on reliability provided by the two main operators.

121. CalMac's figures showed "contractual reliability" for 2021-22 of 98.76%. For scheduled sailings delivered (described as "actual reliability"), the figure was 93.11%.ⁱLetter from CalMac to Convener of the Net Zero, Energy and Transport Committee in response to further questions on ferry data - 21 February 2023 NorthLink reported 2880 operated sailings in 2021-22 and 97 cancelled sailings, resulting in a reliability figure of 96.6%.ⁱⁱNorthLink Ferries (2022). Performance Monitoring Northern Isles Ferry Services 2020 – 2028 Contract Year 2

122. CalMac's figures include reasons for cancellation, as discussed below. NorthLink did not provide information broken down by reason for cancellation.ⁱⁱⁱLetter from NorthLink Ferries to the Committee in advance of evidence session - 30 January 2023

123. Particularly in the case of CalMac, the relatively high reliability figures recorded in operators' own data does not match the experiences communities were reporting to the Committee. In particular, it was suggested official reliability figures were not characteristic of travel on "major vessel(s)".^ivNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 48 Communities told us that official figures did not reflect their experiences and some are collecting their own figures.^ivNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 48-49 and written submissions from the Ferries Community Board and the Mull and Iona Ferry Committee (declining weather)

124. We heard that weather-related cancellations have become more common and sought to explore this further.^ivNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 5, and written submissions including from Mull and Iona Ferry Committee (declining weather) CalMac provided information showing that weather-related cancellationsⁱLetter from CalMac to Convener of the Net Zero, Energy and Transport Committee in response to further questions on ferry data - 21 February 2023 accounted for 50% of cancelled sailings in 2022, and in some areas over 90%. For example, on the Ullapool to Stornoway route 6% (146) of scheduled sailings were cancelled, but 91% (133) of these were due to the weather.ⁱⁱA table containing the weather related cancellations by route is available at Annexe J.

125. Cancellations due to weather are not included in contractual reliability statistics to avoid commercial pressures to sail.ⁱLetter from CalMac to Convener of the Net Zero, Energy and Transport Committee in response to further questions on ferry data - 21 February 2023 Robbie Drummond of CalMac suggested this explained the difference between the official statistics and what service users were telling the Committee.^ivNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 25 Despite describing the "actual performance" figures as "the real one that our islanders and communities understand", Mr Drummond said contractual reliability statistics were the "important" ones.^ivNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 25

126. In 2021/22, cancelled sailings on the CHFS network were 10,825, up from 8347 the year before. These included sailings caused by the following which CalMac considered to be within their control—

     • "Force Majeure" events which in 2021/22 accounted for 2053 cancelled sailings

     • Mechanical problems with ships which in 2021/22 cancelled 1678 (up from 1064 in 2019/20).

127. A category CalMac did not consider within their control were "Scottish Government Approved" cancellations, which rose from 120 in 2019/20 to 1551 in 2021/22.

128. In combination, these three categories of cancellation just outnumber the cancellations caused by weather (5282 against 5113 cancellations).

129. When CalMac gave oral evidence, we asked them to define "Force Majeure" and "Scottish Government Approved" cancellations. They could not do so at the meeting but undertook to follow up in writing.^ivNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 32 It transpired that "Force Majeure" refers to "... provision within the contract where sailings can be cancelled for unexpected, substantial events."^xiiLetter from CalMac to the Convener of the Net Zero, Energy and Transport Committee seeking clarification on definitions of Force Majeure and Scottish Government sanctioned cancellations - 8 March 2023 CalMac said all cancellations under this heading related to the COVID-19 pandemic—

     "These cancellations were due to either planned cancellations to service to minimise travel to the island communities in compliance with Scottish Government covid guidance around essential travel, or due to lack of crew/staff due to covid outbreaks."^xiiLetter from CalMac to the Convener of the Net Zero, Energy and Transport Committee seeking clarification on definitions of Force Majeure and Scottish Government sanctioned cancellations - 8 March 2023

130. This does not explain figures provided under that heading pre-March 2020. CalMac's letter also states "Exceptions are measured against the timetable published and agreed with Transport Scotland. During peak covid we were running essential only timetables and the lower number of sailings would not appear as force majeure."^xiiLetter from CalMac to the Convener of the Net Zero, Energy and Transport Committee seeking clarification on definitions of Force Majeure and Scottish Government sanctioned cancellations - 8 March 2023

131. In relation to "Scottish Government Approved" cancellations, Chris Wilcock of Transport Scotland said—

     "My understanding of CalMac’s categorisation is that that is when we give it relief for known events, such as closures at Uig or other places, or when there is an outage of a vessel and CalMac cascades other vessels to provide relief. There are arrangements and agreements in the contract that allow certain changes.....It is about my team asking whether there are legitimate elements whereby on a contractual basis those would not count in those statistics."

132. CalMac's letter told us that Scottish Government Approved figures refer to "...sailings which were cancelled to allow a vessel to be cascaded to another route to maintain lifeline connectivity."^xiiLetter from CalMac to the Convener of the Net Zero, Energy and Transport Committee seeking clarification on definitions of Force Majeure and Scottish Government sanctioned cancellations - 8 March 2023 Noting a lack of relief vessels, CalMac said cascading was the only option to ensure a lifeline service across the network.^xiiLetter from CalMac to the Convener of the Net Zero, Energy and Transport Committee seeking clarification on definitions of Force Majeure and Scottish Government sanctioned cancellations - 8 March 2023

133. CalMac said cascading did not appear in reliability statistics.ⁱⁱⁱThe letter to the Committee said "The contract also goes further to exempt against reasons which enhance the provision of lifeline services such as, medical emergencies, bereavement issues, emergency situations and cascading vessels to support elsewhere within the network."ⁱLetter from CalMac to Convener of the Net Zero, Energy and Transport Committee in response to further questions on ferry data - 21 February 2023 During visits and engagement events, people in some areas reported a feeling that cascading was a process that always favoured some routes over others. Collecting statistics on cascading would help evaluate that claim.

138. A subset of ferry-related data are statistics on customer satisfaction.

139. Passengers appear to be broadly satisfied with the service operated by NorthLink.ⁱNet Zero, Energy and Transport Committee, Official Report, 15 November 2022, Col 26 and Official Report, 7 February 2023, Col 21 Shetland's constituency MSP said it provided the "best service it can within the confines of the contract and current infrastructure".ⁱⁱWritten submission from Beatrice Wishart MSP (The maritime trade union, Nautilus International, suggested that - compared to CalMac - NorthLink benefited from slightly more modern vessels and timetables that afforded more time for maintenance time.ⁱNet Zero, Energy and Transport Committee, Official Report, 15 November 2022, Col 26)

140. CalMac reported meeting their target of 85% customer satisfaction.^ivDavid MacBrayne Ltd. (2022). Group Annual Report and Consolidated Financial Statements - 2021-2022 Some doubts were expressed about this by island communitiesⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 48 and the Committee notes that the level of satisfaction among island dwellers was consistently below this.ⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 48, Letter from CalMac to Convener of the Net Zero, Energy and Transport Committee in response to further questions on ferry data - 21 February 2023 and David MacBrayne Ltd. (2022). Group Annual Report and Consolidated Financial Statements - 2021-2022

141. CalMac told us it will be outsourcing collection of customer satisfaction information^viiLetter from CalMac to Convener of the Net Zero, Energy and Transport Committee in response to further questions on ferry data - 21 February 2023 and Transport Scotland said it is "developing performance indicators that will be distinct from contractual targets, to better reflect the real experience of passengers.”ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 35

143. Absent more reliable data, ascertaining the root causes of the decline in ferry services is harder than it should be. However, the wealth of evidence and other information presented to the Committee during the inquiry was useful in clarifying many key issues.

144. In its 2020 report, the then REC Committee commented on "a failure by successive administrations in Scotland to develop and implement an effective strategy for renewing the fleet".ⁱRural Economy and Connectivity Committee. 12th Report, 2020 (Session 5). Construction and procurement of ferry vessels in Scotland. (SP Paper 879) During this inquiry, we heard that the Scottish Government and its agencies must speed up vessel replacement.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 15 November 2022, Col 7, Official Report, 31 January 2023, Col 10, Official Report, 28 February 2023, Col 49 and written submissions including from HITRANS and Isle of Arran Ferry Committee The Scottish Government's failure to meet its own targets in its 2013-2022 Plan were outlined earlier. It is also not clear to the Committee why it took CMAL until 2021 to produce its Small Vessel Replacement ProgrammeⁱⁱⁱCMAL. Small Vessels Replacement Programme, intended to implement commitments set out in a ten-year plan by then reaching its final year.^ivLetter from the Minister for Transport to the Committee providing further information following the evidence session - 31 March 2023

145. The average age of the 37 vessels leased to CalMac and NorthLink is currently 24.5 years.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 18 A benchmarking exercise carried out under Project Neptune, comparing the CHFS fleet to those of four other countries or territories, indicates that this does not make Scotland an outlier, as fleets in those territories were around the same average age or older.ⁱThe Committee notes that Project Neptune's data on the age of Norwegian ferries does not appear consistent with evidence from a Norwegian expert [Dag Hole] which indicated that the Norwegian fleet is much younger than the Scottish fleet. However, the Scottish fleet has certainly been ageing contributing to increased unreliability, with more mechanical breakdowns and vessels spending more time out of service being fixed.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 4, 7 and 8, and Official Report, 15 November 2022, Col 7

146. CalMac's statistics showed that mechanical breakdown is one of the main reasons for cancellations on its routes.^viiLetter from CalMac to Convener of the Net Zero, Energy and Transport Committee in response to further questions on ferry data - 21 February 2023 In 2021-22, the Wemyss Bay to Rothesay route experienced the most mechanical problems. (One of the two vessels on this route, the MV Argyle, is one of three CalMac vessels not leased from CMAL.)

147. Older vessels are also more costly to maintainⁱⁱNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 25 and written submissions from Orkney Ferries Ltd and Comhairle nan Eilean Siar and money spent in this way is money not available for more strategic long-term purposes. We heard views that it is taking longer and costing more to find replacement parts, especially specialist parts for uniquely designed vessels.ⁱⁱWritten submissions from Auchrannie Resort and Orkney Ferries Ltd CMAL told us that responsibility for maintenance and repair lies with the ferry operator.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 18 Evidence from the private company Pentland Ferries highlighted the importance of inbuilt redundancy within their vessels, e.g. in the form of additional engines.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 1 November 2022, Col 18 CMAL confirmed to us that such redundancy would be designed into new vessels.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 18

148. In its first stage of consultation on a new ICP: the "Islands Connectivity Plan Long-Term Plan for Vessels and Ports on the Clyde & Hebrides and Northern Isles networks (2023 – 2045) – the Scottish Government sets out a commitment to reduce the average age of the fleet to 15 years by the end of the decade.

149. Fleet capacity (i.e. number of vessels in service) is, on paper, a distinct issue. However, it became clear in evidence that capacity is a key element in the overall "health" of any fleet, as the lack of it risks boats being overworked. A lack of slack within the fleet also increases the general risk of cancellations, delays and unpredictable service.^xiiiNet Zero, Energy and Transport Committee,Official Report, 1 November 2022, Col 13, 15 and 18, and Official Report, 15 November 2022, Col 3 It is clear that there is no excess capacity within CalMac operated services, and some Council-run services were also felt to be seriously overstretched. We heard views that this leads to the regular dry dock maintenance being missed.^xivThis view was expressed on a visit. We also heard that, as vessel maintenance programmes often take place in winter, this can leave vessels less capable in the seasonal conditions to operate the service, leading to more breakdowns or disruptions.^xvWritten Submission from the Tartan Road Ltd

150. The Committee heard of the urgent need for investment in the ferry serviceⁱⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 2 and of failure over a prolonged period to dedicate adequate funding required to maintain Scotland's ferry fleet to an acceptable standard.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 2, written submissions from Comhairle nan Eilean Siar and Robert Trythall (Jan 23) We were also told where funding had been made available, it was badly managed and failed to secure maximum benefit for passengers.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2023, Col 6 and 15, Official Report, 31 January 2023, Col 4

151. We heard views that operators should be looking to buy or lease existing vessels as a short-cut to increasing capacity.ⁱⁱWritten submissions from Highlands and Islands Enterprise and HITRANS CMAL and the Scottish Government both told us this was an option they had explored but that it was not easy to buy or lease the right type of vessel in a competitive market.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 25 and 35 Kevin Hobbs of CMAL said the organisation had looked at 650 ships over a 5-year period in a quest to secure additional second hand tonnage.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 26 The Scottish Government has since leased the MV Alfred from Pentland Ferries, although its transfer and entry into service was delayed.^xxiiBBC. Further delay to Orkney's Alfred joining CalMac fleet - 6 May 2023 Even more recently, the removal of the Alfred from the Pentland Firth route has had regrettable knock-on consequences for that service, underlining that (even if the cost implications, which may be considerable, are left aside) buying or leasing suitable vessels within Scotland may not be a simple short-cut.^xxiiBBC. Pentalina grounding: Two more weeks of Orkney ferry cancellations - 8 May 2023

152. While there was consensus that new boats were needed, and that this was a matter of relative urgency, community representatives stressed the importance of listening to ferry users about their needs before making major commitmentsⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 18, Official Report, 31 January 2023, Col 31, and Official Report, 21 February 2023, Col 15 and this was something CalMac agreed with.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 38 As discussed further below, there are a number of different views on which principles should guide decision-making on fleet replacement and on how these should be weighted.

153. With bad weather one of the main cause of cancellationsⁱScottish Government (2022). Islands Connectivity Plan Long-Term Plan for Vessels and Ports on the Clyde & Hebrides and Northern Isles networks (2023 – 2045) – Draft for Consultation, we sought to interrogate whether there has been a trend towards more extreme weather and if so whether this appears to be one of the root causes of a decline in services . (In the context of ferry sailings "extreme weather" mainly means high winds, although other factors such as visibility are of course important.) A Met Office report "about whether the climate of Scotland has been getting stormier with impacts on the ferry services to Scottish island communities"ⁱⁱMet Office (February 2023). UK Weather Patterns and Scottish Storms showed—

     • "Climatologically the period 1981-2010 saw predominantly higher occurrence of specific weather patterns associated with stormy conditions than the period 1951-1980.

     • The period 2011-2020 saw 10% more occurrence of these patterns than the 1981-2010 climatology.

     • Currently it is not possible to ascertain if this is either a) natural variability or b) a climate signal. It is entirely feasible it could be some combination of both. However, given we know that the natural variability can be quite large, identifying a climate signal as a trend is very difficult to do."ⁱⁱMet Office (February 2023). UK Weather Patterns and Scottish Storms

154. It added "Based on this analysis, a perception that it has become stormier in recent years (2011-2020) is a valid belief, and the period 1981-2020 is stormier than the mid-20th century."ⁱⁱMet Office (February 2023). UK Weather Patterns and Scottish Storms

155. It is clear that this is a potentially complex issue as it may be the interaction of weather conditions with other factors, rather than weather alone, that causes disruption. We heard—

     • Vessel^vWritten submissions from Mull and Iona Ferry Committee (declining weather) and port design were important features and some are insufficiently resilient to bad weather. CalMac noted the impact of weather was often on whether a vessel could berth, rather than sail at all.^viNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 34 CMAL said predicted sea level rises were being incorporated into designs of port works;^viNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 27

     • Safety must be the primary concern for Masters, with whom the ultimate decision and liability for sailing lies.^viNet Zero, Energy and Transport Committee, Official Report, 1 November 2022, Col 21, Official Report, 15 November 2022, Col 5 and 19, Official Report, 21 February 2023, Col 40, Official Report, 15 November 2022, Col 5 and 19-20, Official Report, 31 January 2023, Col 45 and Official Report, 21 February 2023, Col 36 Unions highlighted the expertise they demonstrated in taking a variety of factors into account in any decision on sailing.^viNet Zero, Energy and Transport Committee, Official Report, 15 November 2022, Col 19 and 20 CalMac said Masters were anecdotally reporting "increased depth of weather patterns and worse sea states that take longer to recover".^viNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 34 We heard the frustrations of communities when they were not provided with adequate vessels or port side infrastructure to allow sailings.^viNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 45 On visits, we were told local masters were more confident making crossings in all weathers because of their knowledge of the area;

     • Changes in the law meant the acceptability of certain practices has changed;^viNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 40 and

     • CMAL, NorthLink and CalMac highlighted increasing sophistication of weather monitoring tools.^viNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 36, Official Report, 28 February 2023, Col 27 and Letter from NorthLink to Committee in advance of evidence session - 30 January 2023

156. Where possible, CalMac said it would "seek weather windows to run additional sailings"^viNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 25 and Robbie Drummond suggested sailings were cancelled as a last resort as it is—

     "...far more challenging for us to cancel a sailing than to operate it. We keep making that point to communities. We do not cancel a sailing lightly. That is absolutely the last resort because, when we cancel a sailing, we have disruptive passengers to deal with, communications to issue, and a vessel out of synch."^viNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 40

157. On whether average sailing conditions are, objectively, worsening in a way that impacts sailings no clear view emerged. The then Minister for Transport said "weather is impacting on sailings in a way that it has never done in previous years".^viNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 35 NorthLink noted no specific trends.^xiiiLetter from NorthLink to Committee in advance of evidence session - 30 January 2023 CalMac and others suggested that increased weather disruption was anecdotal and called for more research into the impacts of climate change on weather and ferry services to inform future strategy.^viNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 34 and 41, Letter from CalMac to Committee in advance of evidence session - 31 January 2023 A submission from a community group shared data indicating no clear long-term trend towards more extreme weather in their area but an apparently increasing tendency to cancel sailings in high winds.^xixWritten submission from Mull and Iona Ferry Committee (declining weather)

158. During the inquiry, the Committee heard warm praise for staff across all aspects of ferry services, from booking offices to onboard crew. This report is a good opportunity to acknowledge the huge effort and the personal sacrifice of staff and crew during the COVID19 pandemic to support essential travel.ⁱNet Zero, Energy and Transport Committee, Official Report, 15 November 2022, Col 7 It also provides an opportunity to make clear that the threatening behaviour of a small number of passengers towards ferry staff is completely unacceptable.ⁱNet Zero, Energy and Transport Committee, Official Report, 15 November 2022, Col 6 and 7, and written submission from the Mobility and Access Committee for Scotland and Yell Community Council CalMac and NorthLink described processes to protect staff, including a zero-tolerance policy for violent and aggressive behaviour.ⁱⁱⁱLetter from CalMac to Committee in advance of evidence session - 31 January 2023 and Letter from NorthLink to Committee in advance of evidence session - 30 January 2023

159. Staffing issues have sometimes caused delay or cancellation, but were not raised during the inquiry as a major cause of unreliable ferry services, particularly in a post-pandemic context.ⁱWhere COVID or other illnesses rendered a sailing impossible due to lack of staff, it was suggested contingency staffing arrangements should have been made to facilitate the service.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 7 and written submissions including from Krystyna Manson, Euan Haig, Jean Mary Knowles, Lynette Peterson, and Mike Protts The need for investment to train and retain staff, partly with competitive and attractive remuneration packages, was highlighted to the Committee.ⁱNet Zero, Energy and Transport Committee, Official Report, 15 November 2022, Col 6 and 7, Official Report, 7 February 2023, Col 29 and 35 This included developing skills in propulsion systems of the future.

160. Referring mainly to the tripartite arrangement between the Scottish Government, CMAL and the two operators, the Rural Economy and Connectivity Committee's 2020 report described it as "a cluttered decision-making landscape that lacks transparency".ⁱRural Economy and Connectivity Committee. 12th Report, 2020 (Session 5). Construction and procurement of ferry vessels in Scotland. (SP Paper 879) Government support for ferry services in Scotland has been provided since the 1960s. The following graphic is timeline of how this system has developed.

161. There is a list of private, independent harbour owners in Annexe K.

162. The intention behind the 2006 decision to split Caledonian MacBrayne Limited was to avoid a breach of European state aid rules. At the time the Scottish Government said—

     "The European Commission has a duty under Article 88(1) of the Treaty to keep under review aids existing in Member States and to propose to the Member States appropriate measures required by the progressive development, or the functioning, of the Common Market. Following the introduction of Community guidelines on State aids to maritime transport, the Commission wrote to Ministers seeking information about the compatibility with Community law of our current arrangements whereby CalMac receives public subsidy to provide Western Isles and Clyde ferry services."

163. The tripartite arrangement is clearly not popular with stakeholders. It was not always wholly clear from evidence whether dissatisfaction is with the arrangement itself or with the perceived failings of any of the parties to it, for instance in relation to how they communicate or decisions they have taken. For many people, the two issues may understandably be merged. However, we heard views that the CMAL/ CalMac split was "artificial"ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 9 or was a "clumsy solution" to the legal problem.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 8 We also heard views that the arrangement was a consequence of Scotland (unlike most comparable countries) retaining a state-owned company rather than private operators for so many of its routes.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 11

164. Further specific criticism of the tripartite arrangement was that—

     • It is not transparent;^vWritten submission from North Ayrshire Council

     • It does not provide clarity on responsibility and accountability.ⁱOne example raised with the Committee was the closure of the mezzanine deck on the MV Hebrides during COVID and the subsequent decision to keep it closed. CalMac suggested in correspondence this was due to staffing and authorised by Transport Scotland.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 9 and 21, Official Report, 21 February 2023, Col 27 Official Report, 7 February 2023, Col 52, and written submissions from the Mobility and Access Committee for Scotland, Bute Ferry Committee and North Ayrshire Council. (In this connection, we note two instances during the inquiry itself of Transport Scotland correcting evidence of CMAL and CalMac on their role and responsibilitiesⁱⁱNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 48 and Letter from the Minister for Transport to the Committee providing further information following the evidence session - 31 March 2023);

     • It does not incentivise value for money;ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 9, 10 and 19 and

     • It does not seem to incentivise quality outcomes or effective decision-making.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 9

165. Joe Reade of the Mull and Iona Ferry Committee said—

     "when a vessel is being replaced, as is happening in Islay now, the decisions that go into the vessel design and bake in the operating costs....all those decisions about the operating costs of the vessel—are being taken by CMAL, whose success or otherwise is completely unrelated to the financial success of CalMac. If CMAL specifies a high-cost vessel, it makes no difference to its business or personal outcomes. In addition, CalMac can specify a vessel, but there is no opportunity for a competitor to offer a different vessel, because CalMac knows that the vessel that it specifies now is the same vessel that any competitor will be obliged to use, so it has no incentive in that regard."ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 9

166. On their roles and responsibilities, the Scottish Government acknowledged there is a perception of "a lack of accountability among the parties".^xiScottish Government (2022). Strategic framework of options for the CHFS network - Part 2 - Project Neptune CMAL CEO Kevin Hobbs conceded in their working relationship, the parties "might not be as joined up as we ought to be".ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 10 It was suggested the role of the Scottish Government and Transport Scotland should be focused on the tendering for contracts and the provision of capital funding for ferry procurement.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 59

167. Throughout this inquiry, there has been frequent reference to the importance of having visible leadership and strategic long-term thinking and planning on ferry services.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 6, Official Report, 8 November 2022, Col 7 Regardless of current complex arrangements, widely perceived as a barrier to accountability, ultimate responsibility for Scotland's ferry services rests with the Scottish Government, through the Minister for Transport, reporting to the Cabinet Secretary for Transport, Net Zero and Just Transition

168. Jenny Gilruth MSP was the Minister for Transport for most of this inquiry and was appointed to that role in January 2022. She was promoted to Cabinet Secretary for Education and Skills in March. Between April 2023 and June 2023, the role was held by Kevin Stewart MSP. In June 2023, Fiona Hyslop MSP was appointed Transport Minister. The new Minister for Transport is the eighth person in this role since the launch of the Scottish Ferries Plan in December 2012 and the Cabinet Secretary she will report to is the fifth Cabinet Secretary with responsibility for transport during this time.ⁱCabinet Secretaries with responsibility for Transport - Nicola Sturgeon MSP (Infrastructure, Capital Investment and Cities - 2012 - 2014), Keith Brown MSP (Infrastructure, Investment and Cities - 2014 - 2016), Fergus Ewing MSP (Rural Economy and Connectivity - 2016-2018), Michael Matheson MSP (Transport Infrastructure and Connectivity - 2018- 2021, and Cabinet Secretary for Net Zero, Energy and Transport - 2021 - April 2023), Mairi MacAllan MSP (Cabinet Secretary for Net Zero and a Just Transition April 2023-June 2023 and Cabinet Secretary for Transport, Net Zero and Just Transition June - June 2023 - Present); Transport Ministers - Keith Brown MSP (Transport and Veterans - 2012-2014), Derek Mackay (Transport and Islands - 2014-2016), Humza Yousaf MSP (Transport and the Islands - 2016 - 2018), Paul Wheelhouse (Transport, Infrastructure and Connectivity - 2018-2021), Graeme Dey MSP (Transport 2021 - 2022), Jenny Gilruth MSP (2022-April 2023), Kevin Stewart MSP (April 2023 - June 2023) and Fiona Hyslop MSP (June 2023 - Present)

169. The Committee understands that ministerial change is a fact of political life but this level of churn is unhelpful as we heard from island communities on our visits.

174. The Committee has been clear our inquiry has been about the future of Scotland's ferry services and the steps required to progress from the current situation to one which meets the self-identified needs of communities. We will discuss—

     • The organisational structure for delivery of public ferry services;

     • The next CHFS contract;

     • Vessel and service requirements and how to meet them;

     • Community voices in shaping ferry services;

     • Council run ferries; and

     • Fixed links.

175. The then Minister for Transport, Jenny Gilruth MSP, told us that the common theme arising from reports on ferry services was governance and that she did not yet believe the right structures were in place. She acknowledged Project Neptune's view the tripartite arrangement was often detached from Government Ministers, and agreed this was problematic. She highlighted the Ferry Communities Board, a now independent group of representatives of island communities, as having an important role in helping develop future structures.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 50

176. Ms Gilruth believed a restructuring of responsibility within Scottish Government was helping to strengthen the working relationship.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 49 She said collaboration had improved during her tenure as Minister but more needed to be done. However, she also suggested, for the sake of ferry communities, the priority right now should be to focus on addressing unreliability rather than governance issues.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 63

177. In this section of the report we have considered evidence presented to us on—

     • Project Neptune recommendations on a potential merger of CMAL and CalMac;

     • The role of Transport Scotland including how it utilises expert advice and whether the functions and expertise of CMAL should be assumed within Transport Scotland; and

     • The legal parameters of the Scottish Government's ability to restructure ferry delivery services.

178. Project Neptune considered the benefits and disbenefits of the tripartite arrangement and possible alternatives. Its recommended option was to establish a business case to consider the amalgamation of CMAL and CalMac. It said that this "has the potential to contribute towards the achievement of Best Value."

179. This proposal attracted widespread but not unanimous support. Professor Neil Kay described CMAL as "an extra party" in the ferries system that "could well be a redundant factor".ⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 3 We heard a merger could improve collaboration and achieve efficiency savings. Unions backed a CalMac/CMAL merger.ⁱNet Zero, Energy and Transport Committee, Official Report, 15 November 2023, Col 11 and 12 and written submission from the Transport Salaried Staffs' Association (TSSA)

180. Comhairle nan Eilean Siar was among those expressing doubts about a merger, on the ground that CMAL had shown a greater openness to dialogue and engagement than CalMac.ⁱⁱⁱWritten submission from Comhairle nan Eilean Siar They said this would make CMAL's merger into CalMac a "retrograde step". Instead, they suggested merging CMAL with Transport Scotland to create a "Ferries Scotland", provided this went together with a more devolved model of decision-taking.

181. Transport Scotland is an executive agency of the Scottish Government, accountable to the Transport Minister and the Cabinet Secretary for Transport, Net Zero and Just Transition. We heard views in evidence, as well as during engagement and on visits, that it does not seem to truly understand the needs of ferry-dependent communities or the detail of maritime transport policy.ⁱNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 54 Transport Scotland's lack of due diligence in relation to Hulls 801 and 802 has also been the subject of criticism by Parliamentary committees.ⁱⁱRural Economy and Connectivity Committee. 12th Report, 2020 (Session 5). Construction and procurement of ferry vessels in Scotland. (SP Paper 879) and Public Audit Committee. 1st Report, 2023 (Session 6). New vessels for the Clyde and Hebrides: Arrangements to deliver vessels 801 and 802. (SP Paper 344)

182. Transport Scotland told the Committee—

     "...we are generalist civil servants....we rely very much on the expertise in the other parts of the tripartite arrangement......We do not purport to be the overall experts with all the answers; our role is very much to support ministers in their engagement around contract specifications and other elements. As with other large Government contracts, we also rely on the advice of industry experts and consultants, as people would expect us to do as part of such work."ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 46

183. The Scottish Government previously convened a Ferry Expert Group. According to November 2018 minutes of the group’s meeting at which its purpose was discussed—

     “The collective view was that the group was here to help advise Transport Scotland and that they would then come to the group with a specific issue or questions and the group would in turn advise Transport Scotland on options for moving forward.”^ivScottish Government (2018). MINUTES OF THE EXPERT FERRY GROUP - 15 NOVEMBER 2018

184. However this was disbanded as, according to the Scottish Government it had "evolved into something away from its original aim".ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 48 Group members and othersⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 19 have suggested it was disbanded because their views were not fully incorporated into decisions.ⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 24 and written submissions from Alf Baird and Roy Pedersen Alf Baird said—

     "My experience in the EFG was that the tripartite members ignored most of the advice and recommendations made by the three independent members as to how to improve ferry service delivery, different vessels etc., and they simply continued to make costly mistakes on procurement, 'strategy' etc. The EFG was ended by officials when the very serious problems arose with vessels 801/02, and I expect the tripartite could no longer face independent members without some considerable embarrassment on their part; they had ignored our advice on alternative options and their 'strategy' had been found wanting."^viiiWritten submission from Alf Baird

185. Professor Neil Kay said he left due to the lack of transparency of issues under consideration.ⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 13 and BBC. Prof Neil Kay quits government's Expert Ferry Group - 4 February 2014 It is also not clear why this group was disbanded. It was convened to provide advice where required and appears to have done that. Advice of some members appears not to have been taken. The then Minister for Transport, Jenny Gilruth MSP, announced in September 2022 she had asked Transport Scotland to advise on establishing a round-table of experts at international level.^xScottish Parliament, Official Report, 8 September 2022, Col 78 The Committee also notes Transport Scotland has appointed consultancy firms to provide advice and expertise on the preparation of the next CHFS contract.^xiLetter from the Minister for Transport in response to the letter from Convener of the NZET Committee seeking clarity on the role of consultants - 31 May 2023

186. A further option considered by Project Neptune is a CMAL - Transport Scotland merger.ⁱScottish Government (2022). Strategic framework of options for the CHFS network - Part 2 - Project Neptune It would involve Transport Scotland taking on the direct role of asset owner with responsibility for procurement and fleet renewal. The report described this as "similar to the Scottish roads network, whereby major trunk roads are owned by the SG and maintenance is procured via four separate contracts".ⁱScottish Government (2022). Strategic framework of options for the CHFS network - Part 2 - Project Neptune The report notes—

     • This option has potentially negative and positive implications for expertise, noting if assimilated there is a danger key staff may leave, but further expertise could be sought using contractors or recruitment; and

     • It could help streamline the tripartite system and support accessibility to communities.

187. The report also noted some potential disadvantages: perceived complexities to do with the transfer of staff, pensions and chargeable assets.

188. Because of this, Project Neptune concluded, of the options available, a CMAL-Transport Scotland merger was not optimal.ⁱScottish Government (2022). Strategic framework of options for the CHFS network - Part 2 - Project Neptune

189. Given the origins of the tripartite arrangement (discussed in The tripartite arrangement section of this report), we sought to explore whether exit from the EU, and from being directly subject to EU competition law, meant the Scottish Government now had more freedom to reconfigure the arrangement. Ms Gilruth told us that UK legislation - the Subsidy Control Act 2022 - has much the same effect as previous EU competition law. She said

     "...despite the fact that we have left the EU, a lot of the legislation that was previously in place is now covered by the Subsidy Control Act 2022. It is not clear to me from the advice that I have had from officials whether we have the freedom to do things markedly differently from what was previously envisaged."ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 51

190. She said legal advice would be sought on whether it would be possible to reconfigure relationships and to do things "radically differently".ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 51 Follow-up correspondence from her ministerial successor confirmed this was still the position that they are seeking legal advice.ⁱⁱⁱLetter from the Minister for Transport to the Committee providing further information following the evidence session - 31 March 2023 We note the reported services of the consultancy firm hired to provide expertise on the preparation of the next CHFS contract includes legal advisers who provided support to the Scottish Government on "CHFS1 procurement and the associated restructuring of Caledonian MacBrayne in 2006".^ivLetter from the Minister for Transport in response to the letter from Convener of the NZET Committee seeking clarity on the role of consultants - 31 May 2023

191. CalMac declined to offer views on a preferred model but said that any chosen structure should deliver clarity and accountability.ⁱNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 27 CMAL said the important goal was a structure which delivered good results.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 9 The CEO Kevin Hobbs said CMAL's lack of involvement in operations meant they did not have a role in crisis management and could thus "concentrate 100 per cent on strategy, the asset base and such like".ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 9 He told us that his preference was for CMAL to continue.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 12

192. The then Transport Minister, Jenny Gilruth MSP, told us she was not "wedded to any one concept" except that "something will have to change pretty radically".ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 62 She said merging CalMac and CMAL would raise questions about the Northern Isles ferry contract.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 62

200. The current contract to provide the Clyde and Hebrides Ferry Service is due to end in 2024. The then Minister for Transport, Jenny Gilruth MSP, said that CHFS3 contract was an opportunity to do things differently and learn lessons.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 53-54 The Project Neptune report had provided the Scottish Government with a suite of options to consider for the CHFS network in this regard. Due to the proximity of the next iteration, we have considered the future of the Clyde and Hebrides Service in depth, although some of these considerations and recommendations will also be relevant to future procurement processes for the NIFS. The Committee has focused on—

     • Whether the contract should be "unbundled", i.e. divided into a set of smaller contracts based around geographical clusters or potentially in some cases single services;

     • Whether the contract should be open to tender or be awarded directly;

     • The duration of any contract or contracts; and

     • What additional conditions, if any, should be written into future contractual arrangements.

201. The way in which the CHFS contract is currently packaged for tendering and delivery as a single "bundle" of routes was discussed evidence sessions. This means where bidders seek to deliver the services, they must bid to deliver all of them. The Committee explored whether this is the optimal way to deliver those ferry services or whether "unbundling" the package would achieve better results.

202. However, an issue faced by the Committee throughout this discussion was a lack of clear definition of the extent of the unbundling being referred to. It could encompass various scenarios. It could mean separation of all routes into separate tender packages attractive to the private sector, or it could mean a division of the current bundle delivered by CalMac into different geographical areas. Professor Neil Kay of Strathclyde University told us joint ventures were common elsewhere and the public-private dichotomy was misleading, proffering the view CalMac could successfully bid for smaller bundles potentially with delivery partners. He said were unbundling to be considered, a decision would have to be taken on the extent of this but he suggested it did not have to be either route-by-route or whole bundle distinction.ⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 15 Services could be broken down into a few smaller bundles for example.ⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 19

203. The Project Neptune report described several options on decentralisationⁱⁱⁱScottish Government (2022). Strategic framework of options for the CHFS network - Part 2 - Project Neptune—

     • Decentralisation of power to procure and manage ferry services using centrally owned vessels;

     • Decentralisation of power to procure and manage ferry services and vessels (also involving passing ownership of ports and harbours to local authorities where applicable); and

     • A hybrid model where Transport Scotland operate major routes and local authorities assume responsibility for smaller ones (as happens in Norway).

204. Norway was alone in the international examples considered by the Project Neptune report in decentralised delivery, however the Committee heard this was a common response to competition law requirements across Europe.ⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 11 Countries such as Greece and Denmark operate systems tendering for smaller contracts or packages of routes.^vAlfred J. Baird and Gordon Wilmsmeier (2011). Public tendering of ferry services in Europe. European Transport \ Trasporti Europei

205. The Scottish Government had previously ruled unbundling out as an option for consideration in 2014.ⁱNet Zero, Energy and Transport Committee, Official Report, 1 November 2022, Col 14 and Net Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 50 In a statement to Parliament, the then Minister for Transport, Jenny Gilruth MSP, said the then First Minister, Nicola Sturgeon MSP,—

     “....has been absolutely clear that we will not consider unbundling or privatisation, and the report sets out in further detail some reasons why that will not be pursued.”^viiScottish Parliament, Official Report, 8 September 2022, Col 77

206. The then Minister for Transport, Jenny Gilruth MSP, said if she felt unbundling would be a “silver bullet, it would be on the table”. She said she did not believe unbundling would work given the “variety of routes and vessels that we have in CalMac”. She continued that her focus was on improving reliability and resilience, and confirmed her belief the way to deliver this was through extra tonnage.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 50

207. The Committee heard support for unbundling, predominantly due to allowing for more competition in the sector.ⁱNet Zero, Energy and Transport Committee, Official Report, 1 November 2022, Col 14, Official Report, 31 January 2023, Col 8 Stakeholders told the Committee that private sector operators would be able to deliver value for moneyⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 16, efficiencyⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 16 and Official Report, 31 January 2023, Col 7 and flexibilityⁱNet Zero, Energy and Transport Committee, Official Report, 1 November 2022, Col 29 and would inject a service-improving level of competition currently not incentivised in the tripartite model of delivery.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 16 and written submission from Maritime Services Management Ltd (Scotland) This was partly to do with the ownership of the vessels resting with private operators, as happens in Norway.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 10 Arguments in favour included—

     • It could facilitate faster, simpler tendering processes and more agile contracts;ⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 10

     • Tendering for smaller bundles could allow for a system akin to the Norwegian model to develop.ⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 8 Project Neptune was described as "disappointing and expensive" as the system employed by the international comparator most akin to Scotland, NorwayⁱⁱⁱScottish Government (2022). Strategic framework of options for the CHFS network - Part 2 - Project Neptune, had already been ruled out.;ⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 14

     • Roy Pedersen, an author and consultant, told the Committee small bundles with maximum community contribution was "the answer".ⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 8 It could bring decision making, potentially through operation and ownership of ferry servicesⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 13, closer to communities.ⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 13 Conversely, the need for community ownership was seen as a failing of publicly delivered servicesⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 13 and 14 and the complexities of doing so were noted;ⁱNet Zero, Energy and Transport Committee, Official Report, 15 November 2022, Col 10 and 12

     • It could achieve better value for money;ⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 11 and written submissions and

     • It could offer commercial opportunities leading to new operators providing services desired by communities. Services offered by private sector operators in Scotland were much praised.ⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 7 We heard the model implemented by Western and Pentland ferries should be replicated by public services to deliver value for money. This included their levels of onshore and onboard service, their approach to vessel procurement and the crewing and operation of vessels. Both organisations suggested there were other routes on which commercial services could be successful.ⁱNet Zero, Energy and Transport Committee, Official Report, 1 November 2022, Col 13 Recognising this has been ruled out however, the possibility of additional privately operated services on top of the core bundle was raised, with particular reference to freight.ⁱNet Zero, Energy and Transport Committee, Official Report, 1 November 2022, Col 17 and 18

208. However, the Committee also heard arguments for most ferry services to remain publicly delivered and run.ⁱNet Zero, Energy and Transport Committee, Official Report, 15 November 2022, Col 9 and written submissions including from Katrina Allan and John K Smith Concerns regarding unbundling ⁱNet Zero, Energy and Transport Committee, Official Report, 15 November 2022, Col 9,11 and 12 included—

     • It could add to existing problems with recruiting staff;ⁱNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 38

     • It could lead to worse services in some areas while other, more profitable routes, enjoyed a better service;ⁱNet Zero, Energy and Transport Committee, Official Report, 15 November 2022, Col 9 and written submission Transport Salaried Staffs' Association (TSSA)

     • More resilience and a better service were offered through public delivery;ⁱNet Zero, Energy and Transport Committee, Official Report, 15 November 2022, Col 9 and Community Land Outer Hebrides Robbie Drummond of CalMac said that operating a large network allowed for contingency planning and unbundling could lead to duplication of effort, such as the need for individual operators to invest in additional relief vessels. He said this would not offer value to the taxpayer;ⁱNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 43 and

     • Trade unions believed it could lead to private operators "cherry picking" the routes they wished to operate, resulting in the loss of a universal standard of service.ⁱNet Zero, Energy and Transport Committee, Official Report, 15 November 2022, Col 9 and Sleat Community Council

209. Others agreed there were ways to utilise the expertise and benefits of both public and private sector organisations.^xxxvWritten Submissions from Maritime Services Management Ltd (Scotland) For example, it was suggested freight only or overnight freight vessels may be a way to resolve this tension on some routes. The Committee explored whether this could be achieved in addition to current services provided through the Clyde and Hebrides Ferry Service contract.

210. This issue was exemplified in evidence by the needs of the whisky industry in Islay and considerations given there to chartering additional services.ⁱNet Zero, Energy and Transport Committee, Official Report, 8 November 2022, Col 22 CalMac said it did not gather data on "quantity or type of goods transported in commercial vehicles" but that it was concerned about its ability to "manage the growing demands of the whisky industry" in advance of delivery the new ferries for the route^xxxviiLetter from CalMac to Committee in advance of evidence session - 31 January 2023. Gordon Ross of Western Ferries proposed an additional service to support the growing needs of the whisky industry on Islay but said the procurement of new vessels for the route had overtaken this.ⁱNet Zero, Energy and Transport Committee, Official Report, 1 November 2022, Col 13, 18 and 27

211. Difficulties in accessing ports and harbours run by CalMac on behalf of CMAL, further deterred investment in establishing private, demand led services on routes in addition to the CHFS contract.^xxxixThis was a view expressed on visits.

212. Project Neptune explored the prospect of a direct award of the CHFS contract. The decision as to whether a direct award is appropriate is integrated with other decisions on governance structures and long-term ambitions for the ferry sector, as highlighted by the Project Neptune report. The ability to do this depends on whether the Teckal Exemption could apply to the legal requirement to tender for CHFS contracts.

213. The Teckal exemption stems from a 1999 European Court of Justice rulingⁱCase C-107/98 Teckal Srl v Comune di Viano and Azienda Gas-Acqua Consorziale (AGAC) di Reggio Emilia 1999 (further detail is available at Annexe L) and "allows for public contracts to be awarded to in-house companies under strict conditions relating to the parent authority's control and the functions performed."ⁱⁱScottish Parliament, Official Report, 2 February 2017, Col 41 The conditions of this are—

     • "the public body fully controls that company in a similar way to its own departments

     • the publicly owned company carries out at least 80 per cent of its activities with the public body."ⁱⁱⁱAudit Scotland (2017). Transport Scotland's Ferry Services

214. In 2016, the European Commission told the Scottish Government "the Teckal exemption should be capable of being applied to the maritime cabotage regulation, under strict conditions".ⁱⁱScottish Parliament, Official Report, 2 February 2017, Col 41

215. In May 2018, the then Minister for Transport and the Islands, Humza Yousaf MSP, acknowledged the European Commission thought it would be "challenging" for the Scottish Government to meet the criteria. However he stated "I remain fully committed to building a case for a direct award to an in-house operator that would satisfy the state-aid rules before the existing Clyde and Hebrides ferry services contract ends in October 2024".ⁱⁱScottish Parliament, Official Report, 24 May 2018, Col 50

216. Project Neptune also highlights the need for a direct award to meet procurement and UK Subsidy Control conditions.^viScottish Government (2022). Strategic framework of options for the CHFS network - Part 2 - Project Neptune

217. The benefits of making a direct award would be to avoid the need for a competitive tendering exercise, saving public resource of Transport Scotland and CalMac. However, the Project Neptune assessment of this was "due to the stringent requirements of making a Direct Award TS may have to invest a similar level of resource in proving that these requirements are satisfied." The report also noted it removed the competitive element which can drive quality and value.

218. In the previous tender exercise for CHFS2, the only other bidder, SERCO, submitted a non-compliant bid. It did not wish to accept the risk for the vessels due to its perceptions of insufficient information on their current state. This left CalMac as the only bidder. Transport Scotland did not consider the 350 commitments in the CalMac bid, making it hard to demonstrate the value it expects the contract to provide.ⁱⁱⁱAudit Scotland (2017). Transport Scotland's Ferry Services

219. In evidence to us, the RMT called for CalMac to get the next CHFS contract by direct award.^viiiNet Zero, Energy and Transport Committee, Official Report, 15 November 2022, Col 24 and written submission from Community Land Outer Hebrides The then Minister for Transport, Jenny Gilruth MSP, had previously told Parliament this would only happen if communities were content with that option and mentioned the consultation work undertaken by Angus Campbell.ⁱⁱScottish Parliament, Official Report, 8 September 2022, Col 83

220. In March 2023, the then Minister for Transport, Kevin Stewart MSP, told us that legal advice is expected later in the year on the Scottish Government's abilities to redesign ferry services within the new UK Subsidy Control regime.^xLetter from the Minister for Transport to the Committee providing further information following the evidence session - 31 March 2023 The Committee notes correspondence from the then Minister for Transport outlining the role of legal consultants with regard to preparation of the next contract. This includes "reviewing and advising on options and assisting in implementing the chosen strategy".^xiLetter from the Minister for Transport in response to the letter from Convener of the NZET Committee seeking clarity on the role of consultants - 31 May 2023

221. The current CHFS and NIFS contracts are for six and eight years respectively. The Project Neptune report observed that this makes them shorter than benchmarked international examples as well as other Transport Scotland contracts such as those for rail. The Committee heard that Norwegian ferry contracts are for 8-10 years.ⁱNet Zero, Energy and Transport Committee, Official Report, 21 February, 2023, Col 14 Pentland Ferries said their rebuild schedule for vessels was roughly every 10 yearsⁱNet Zero, Energy and Transport Committee, Official Report, 1 November 2022, Col 16 and Western Ferries suggested the length of the current tender was short in terms of allowing an operator to recoup investment in a vessel to operate the route.ⁱNet Zero, Energy and Transport Committee, Official Report, 1 November 2022, Col 15

222. The Project Neptune report said the benefits of extending the contract length were--

     • It could better support capital investment by an operator;

     • It could encourage long term decision making; and

     • It would allow an operator to align with Transport Scotland and CMAL's "asset renewal strategy" which in term could lead to reduction of the age of the fleet.

223. The then Minister for Transport, Jenny Gilruth MSP, confirmed the length of the contract was being considered.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 51

224. The Committee received views on what the next iteration of the contract should contain, including on—

     • Contract variation;

     • Timetables;

     • The specification of use of CMAL vessels;

     • Length and complexity of the contracts for operators; and

     • Value for money and Key Performance Indicators.

225. CalMac can make changes to its contract by making a request to Transport Scotland to "improve the economy efficiency and effectiveness" of a service.ⁱScottish Government (2017). Contract for Provision of Ferry Services - 2016-2024 - Clyde and Hebrides It can make "operational variations" by notifying Transport Scotland.ⁱScottish Government (2017). Contract for Provision of Ferry Services - 2016-2024 - Clyde and Hebrides

226. CalMac noted its ability to run additional sailings within the contract.ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 31 More generally, it reviews timetables biannually as set out in the contract based on customer feedback. These are assessed for viability before presentation to Transport Scotland for approval.^ivLetter from CalMac to Committee in advance of evidence session - 31 January 2023 It was also made clear the decision was for Transport Scotland.ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 31

227. However, it was suggested communities would wish for this to be more flexible rather than requiring application to Transport Scotland or Scottish Ministers.ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 43

228. The Chair of the Ferries Community Board said—

     "One thing that we have to break from is having an operator being told to just do a timetable. That results in no recognition of need or of what the service should be. It stops flexibility..."ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 48

229. On visits we heard contract changes required huge bureaucratic processes. Transport Scotland said there were reasons for this, noting the unintended consequences of contract changes posed challengesⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 53 and decisions were made on the basis of crewing hours, impacts on other communities and a principle that changes should be cost neutral.ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 54

230. In evidence the contracts were described as unattractive and overly prescriptive.ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 1 November 2022, Col 16 Professor Alf Baird, Western Ferries and Pentland Ferries described the challenges of the model for other operators, including the mandate to use CMAL vessels.ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 12 and Official Report, 1 November 2022, Col 15, 16 and 18 The Committee heard in evidence the contracts are overly complex and inefficient in comparison to Norwegian counterparts.ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 10

231. In terms of efficiency and value for money, the Committee was told—

     • CalMac relies heavily on subsidy rather than achieving a profit;

     • Crewing levels on ferries exceeded what appeared to be required; and

     • Procurement of "more efficient ships" could lead to "double the ships".ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col

232. An Audit Scotland report^xivAudit Scotland (2017). Transport Scotland’s ferry services on Transport Scotland’s ferry services was published in 2017 and found the amount of subsidies paid in the decade before on the Clyde and Hebrides Ferry network has risen by 185% due to "increase in services, new vessels and the introduction of the Road Equivalent Tariff". Orkney Island Council suggested the efficiencies achieved on the NIFS network could be replicated in CHFS.^xvWritten submission from Orkney Island Council

233. The Audit Scotland report further noted—

     "Transport Scotland does not routinely measure the contribution that ferry services make to social and economic outcomes at a network level, which makes it difficult to determine whether its spending is value for money. Better information would allow Transport Scotland to demonstrate the impact of its decisions and the contribution that ferries make to the Scottish Government's National Outcomes."

234. The Committee heard the absence of information on the cost of delivering publicly funded ferry services, including on a route-by-route basis made it hard to assess value.^xvWritten submission from HITRANS Other information such as social and economic factors, the impact on mental health of constantly feeling trapped, missing life events and depopulation meant true value for money was not being taken into account in decisions on ferry services and fixed links.^xviiWritten submissions from North Ayrshire Counciland Shetland Islands Council and ZetTrans, Shetlands Regional Transport Partnership The Chair of the Ferries Community Board highlighted the socio-economic impact report^xviiiCentre for Economics and Business Research commissioned by CalMac Ferries and Ferries Community Board (2022). CalMac Ferries: Socio-Economic Impact Report carried out by the group and said, along with others, that such factors had to be considered.ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 33 and 35, and written submission Ferries Community Board and Shetland Islands Council and ZetTrans, Shetlands Regional Transport Partnership The draft Islands Connectivity Plan for Vessels and Harbours notes the challenges in quantifying information.^xxScottish Government (2022). Islands Connectivity Plan Long-Term Plan for Vessels and Ports on the Clyde & Hebrides and Northern Isles networks (2023 – 2045) – Draft for Consultation

235. It said new Key Performance Indicators (KPIs) for ferry services would be developed and these will be—

     • Network reliability;

     • Service and/or vessel/port outages – frequency and duration;

     • Age of the oldest vessel in the fleet and/or age of vessels at replacement;

     • Rolling average number of vessels replaced; and

     • Capacity available and utilisation (passengers and vehicles).

236. These do not include community satisfaction rates.^xxScottish Government (2022). Islands Connectivity Plan Long-Term Plan for Vessels and Ports on the Clyde & Hebrides and Northern Isles networks (2023 – 2045) – Draft for Consultation

237. In October 2017, Audit Scotland published a report on tendering for the current Clyde and Hebrides Ferry Service Contract.ⁱAudit Scotland (2017). Transport Scotland's Ferry Services Among its key observations and recommendations were Transport Scotland must—

     "Improve its approach to procuring ferry services. This should include—

     • ensuring that procurement teams include staff with procurement qualifications and experience of the ferry sector

     • applying lessons from previous procurement exercises

     • building in sufficient time to prepare important project documentation, such as business cases

     • ensuring that contract specifications are accurate, up to date and clear to potential bidders

     • providing bidders with clear, good-quality and timely data to allow them to make informed bids"ⁱAudit Scotland (2017). Transport Scotland's Ferry Services

     and

     "Strengthen its contract management arrangements by—

     • ensuring there is a sufficient number of people, with the right expertise, to effectively manage ferry contracts

     • involving the contract management team in ferry procurement exercises to inform its understanding of contract requirements."ⁱAudit Scotland (2017). Transport Scotland's Ferry Services

238. On timescales, Project Neptune suggested the tender process could last at least 18 months and the contract's key commercial principles should be agreed by summer 2022.^ivScottish Government (2022). Strategic framework of options for the CHFS network - Part 2 - Project Neptune It also said Transport Scotland should identify and incorporate long-term strategic objectives into the tender to ensure any structural changes complements the contract. The then Minister for Transport and Transport Scotland confirmed to the Committee these had not yet been agreed as the community consultation work undertaken on Project Neptune involved asking people what they would like to see from the next CHFS contract.^vNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col

239. The Project Neptune Report was delivered to the Scottish Government in February 2022 but not published until the September of that year despite calls to do so.^vNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 13 Angus Campbell and the Ferry Community Board were asked to carry out consultation work which he said was due to conclude in March 2023.^vNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 34 and Project Neptune Community Engagement

240. The tender exercise for CHFS2 was delivered on time but criticised by Audit Scotland for "delays and weaknesses in how Transport Scotland managed the procurement project".ⁱAudit Scotland (2017). Transport Scotland's Ferry Services

253. Having highlighted the need for fleet replacement as one of the root causes of problems, the Committee considered evidence on the vessels required, including—

     • The investment needed to ensure vessels can be procured;

     • The process by which these should be specified and procured;

     • Future proofing and decarbonisation of Scotland's ferries; and

     • The port and harbour infrastructure to support these ambitions.

254. The Scottish Government has committed to reducing the average age of the publicly owned ferry fleet to 15 years. CMAL was confident this could be achieved, but noted it depended on funding.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 17 Transport Scotland said there was “real momentum behind that in terms of the investment that is going in now”.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 36 The then Minister for Transport agreed that "accelerating investment” would bring down the average age of the fleet and achieve greater resilience.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 35 She highlighted recent funding decisions but said the investment needed would be “financially challenging".

255. There were calls for the Islands Connectivity Plan to include—

     • a review of the ship maintenance arrangements, with published deadlines around overcoming problems of vessel reliability, and for additional funding for the increased costs of maintenance";^ivWritten submission from Transport Salaried Staffs' Association (TSSA)

     • A transparent maintenance schedule;^vWritten submissions from HITRANS and Comhairle nan Eilean Siar and

     • An increase in preventative maintenance spend.^ivWritten submission from HITRANS

256. In 2020, the Scottish Government published the Infrastructure Investment Plan (IIP), a five year planⁱThe Scottish Government's Medium Term Financial Strategy published in May 2023 noted an intention to extend this by 1 year to 2026-27. for delivering and investing in infrastructure projects. It pledged £580m of investment and an additional £115m for the two additional Islay class vessels.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 17 and 33 and Scottish Government (2021). A NATIONAL MISSION WITH LOCAL IMPACT Infrastructure Investment Plan for Scotland 2021-22 to 2025-26 CMAL and CalMac both told us they were confident sufficient funding is now available for vessel replacement and harbour upgrades.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col X7 and Official Report, 21 February 2023, Col 35 However, they also said that higher inflation meant they could not buy as much as they previously anticipated.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 17 CMAL told us both that "I do not think that we need anything more" and "we cannot buy as much as we thought we were going to buy".ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 17 and 33

257. CMAL told the Committee its Small Vessel Replacement Programme (SVRP) would see designs for 10 new 100% battery operated ferries completed in the first quarter of 2023, with the tendering process taking place in the last quarter.^ivWritten submission from CMAL

258. Contingency plans were another feature of calls for increased resilience.ⁱNet Zero, Energy and Transport Committee, Official Report, 1 November 2022, Col 15 and written submissions including from Mobility and Access Committee for Scotland, Auchrannie Resort and Comhairle nan Eilean Siar CMAL and CalMac indicated at least in the short term, relief vessels would greatly increase resilience.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 19 and Letter from CalMac to the Convener of the Net Zero, Energy and Transport Committee seeking clarification on definitions of Force Majeure and Scottish Government sanctioned cancellations - 8 March 2023 CMAL noted this would have cost implications.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 19

262. In our consideration of procurement in this inquiry, we have sought to be forward-looking, whilst also learning lessons that will help faster and most-effective delivery of the lifeline services people rightly expect. The Public Audit Committee has led on scrutinising procurement concerns around Hulls 801 and 802.

263. Evidence the NZET Committee received related to—

     • Whether CMAL have made the improvements recommended by the Rural Economy and Connectivity Committee; and

     • Decision making on specification and design of vessels.

264. Both this Committee and the Public Audit Committee have received details from CMAL on the changes it has introduced to procurement exercises to build vessels.

265. A major area where communities sought input was in vessel specification. The Committee heard communities should be involved from the outset of this process, when the desired outcomes and characteristics of the vessel are specified, rather than detailed technical specification – which are largely matters for naval architects, engineering experts and operators. Stakeholders acknowledged there should be a wider net cast in seeking views on vessel design. The then Minister for Energy, Connectivity and the Islands committed to—

     "improve transparency on how community views are taken into account in decision making, including providing a clearer explanation of why specific design decisions have been reached, and why on some occasions community or individual preferences have not been reflected in a bespoke design... We have already begun the process of developing a revised communications and stakeholder strategy."ⁱLetter from the former Minister for Energy, Connectivity and the Islands to the Rural Affairs and Connectivity Committee in response to its report on Construction and procurement of ferry vessels in Scotland - 25 January 2021

266. On community involvement in decisions on vessel specification, the Committee was concerned at CMAL's dismissive view of this.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 23

267. Trade unions and othersⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 15 told the Committee crew, staff and unions should be involved in vessel specification and design from conception stage.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 15 November 2022, Col 13, 14 and 23 Examples of where unions felt they could have been involved earlier included—

     • If there is insufficient crew accommodation, this results in additional hotel costs;

     • On 801 and 802, they suggested they could have advised on earlier staff training to use the dual fuel systems; and

     • The crew accommodation is also at the rear of the ship where the most vibrations will be felt during docking, resulting in poor sleep for crew.

268. CMAL told the Committee of their working groups looking at new vessels, which now included “specialists who operate the ships”. The Committee welcomes CMAL’s involvement of masters, crew, and engineers in vessel specification, as it repeatedly heard there is little confidence in the expertise and qualification of those making decisions on ferry services.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 15, 17, Official Report, 31 January 2023, Col 5, 12, 17 and 23, Official Report, 28 February 2023, Col 45, and written submission from Alf Baird

269. The Norwegian model was heralded as "the operator of the vessel is also the owner of the vessel and people compete for the right to Government subsidy to operate a service on the basis of their efficiency and productivity. Therefore, their decisions are linked to their financial and business performance."ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 10 As noted above, it was argued that the lack of commercial incentive by the operator in the Scottish system led to poor decisions on vessel specification.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 10 and 16

270. The role of the operator in vessel specification in Scotland was highlighted as important but the process for their involvement was not clear.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 3 and 8 The Mull and Iona Ferry Committee and the Arran Ferry Action Group were agreed Government should set strategic direction and operators should respond to that with plans fully cognisant of community need.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 16 and 17 CMALⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 22 and NorthLinkⁱⁱNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 30 highlighted the close collaboration between the operators and CMAL on vessel design. CMAL suggested operators were mainly responsible for vessel specificationⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 22, but also suggested it laid out pre-determined criteria (for example the length of a ship).ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 22 CalMac said it was "agnostic on vessel design".ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 38 Stuart Garrett said it was the role of the operator to design ferriesⁱⁱNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 30 while Robbie Drummond said "..we have to used whatever is provided to us and we will do that to the absolute best of our ability".ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 29

271. We have received a wealth of evidence on the merits of catamarans over monohulls.^xviiWritten submissions from Alf Baird and Mull and Iona Ferry Committee (Feb 23) These included—

     • Cheaper to purchase allowing for more boats for the same money and thus increased frequency of services;ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 4 and 17

     • Quicker to build;ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 4

     • More efficient to run and "half the powers requirement of a monohull, to they have half the emissions";ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 4 and 22 and

     • They are lighterⁱⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 23 and more stable in the water.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 4

272. CMAL suggested it was not against catamarans. The reasons provided by NorthLink and CMAL for not opting for catamaran designs were confusing. For example, they said a catamaran could not be used in the Pentland FirthⁱⁱNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 38, yet this is what Pentland Ferries does. The Scottish Government has since announced the chartering of the MV Alfred (although the transfer of this to CalMac was delayed^xxivBBC. CalMac's charter of relief catamaran delayed - 15 April 2023).

273. Former members of the Ferry Expert Group reported they felt ignored on vessel design when proposing catamarans.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 5 A further example was suggestions during the development of Hulls 801 and 802 where two smaller vessels were suggested for each route, but a larger individual vessel was purchased.^xxviWritten submission from Alf Baird

299. Transport is the biggest contributor to Scottish carbon emissions, accounting for 29.2% of emissions.ⁱScottish Government (2021). Scottish Transport Statistics Domestic ferries (including council and private operators) represents 1.7%ⁱⁱScottish Government (2022). Islands Connectivity Plan Long-Term Plan for Vessels and Ports on the Clyde & Hebrides and Northern Isles networks (2023 – 2045) – Draft for Consultation of Scottish transport emissions and just under 1% of all emissions.

300. A number of ferry users said reliability was paramount and wanted lifeline services to be fuelled by proven technology.ⁱⁱⁱWritten submissions including Bute Ferry Committee, Ferries Community Board and North Ayrshire Council Others believed the environment and drive to net zero to be a key factor in future ferry design.^ivNet Zero, Energy and Transport Committee, Official Report, 8 November 2022, Col 23, Official Report, 28 February 2023, Col 7 Organisations involved in ferry service delivery spoke of their commitment to a net zero future.^ivNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 41, Official Report, 28 February 2023, Col 7 and written submission from CMAL.

301. In this part of the report, the Committee considers the decarbonisation of vessels. In the following discussion of ports and harbours, there is discussion of how technology used at them could be decarbonised. Alternative forms of transport, including fixed links, and their potential role in emissions reduction are discussed in a later section of the report.

302. ResearchⁱVarious. (2019). REDUCING THE MARITIME SECTOR’S CONTRIBUTION TO CLIMATE CHANGE AND AIR POLLUTION Scenario Analysis: Take-up of Emissions Reduction Options and their Impacts on Emissions and Costs A Report for the Department for Transport commissioned by the UK Government to inform its Clean Maritime Plan suggests "the vast majority of emissions reductions...for UK domestic maritime vessels will be achieved by a switch to low or zero emission fuels".ⁱⁱUK Government (Department for Transport). (2022). UK Domestic Maritime Decarbonisation Consultation: Plotting the Course to Zero The Clean Maritime Plan expects by 2025 "All new vessels being ordered for use in UK waters are being designed with zero emission propulsion capability."ⁱⁱⁱUK Government. (2019). Clean Maritime Plan. A new plan was consulted on last year and is anticipated in 2023.^ivUK Government (2022). Domestic maritime decarbonisation: the course to net zero emissions The consultation sought views on how the UK Government can incentivise and support the 2025 goal.

303. The Scottish Government's Climate Change Plan update published in 2020 commits to "30% of Scottish Government owned ferries will be low emission by 2032" and states it will "Continue to examine the scope for utilising hybrid and low carbon energy sources in the public sector marine fleet as part of our vessel replacement programme."^vScottish Government. (2020). Securing a green recovery on a path to net zero: climate change plan 2018–2032 - update This was considered to be on track in the 2022 Climate Change Plan monitoring report.^viScottish Government (2022). Climate Change Plan: Monitoring Reports 2022

304. The journey to 30% is dependent on the successful delivery of the Small Vessel Replacement Programme^viScottish Government (2022). Climate Change Plan: Monitoring Reports 2022. Currently, 3 small CMAL owned vessels are diesel-electric hybrid and the remainder run on marine fuel oil. The figures do not account for the number of ferries run by councils and private operators. In replacing the ferry fleet, vessels must be future proofed, both excluding further emissions now and being capable of adapting to technologies of the future.^viiiWritten submission from Orkney Islands Council and Comhairle nan Eilean Siar

305. There are opportunities and associated benefits of decarbonising vessels, including additional employment opportunities. The challenges associated with skills to operate new fuel systems were noted and there were calls for investment in skills of those to operate the ferries of the future and for these roles to be based in islands to mitigate depopulation.^ixNet Zero, Energy and Transport, Official Report, 15 November 2022, Col 7 and 8. This was also an issue raised on our visits and at engagement events.

306. The Scottish Government's alignment of the Islands Connectivity Plan with a "legal obligation to achieve net zero climate emissions"^viScottish Government (2022). Islands Connectivity Plan Long-Term Plan for Vessels and Ports on the Clyde & Hebrides and Northern Isles networks (2023 – 2045) – Draft for Consultation is a welcome but ambitious goal. However, CMAL told us it will not achieve the 2030 targets^xiNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 22, (although it is confident solutions will be available by 2045) and its current work represents "small stepping stones to the future".^xiNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 20 This is at odds with Scottish Government's statement "We need to keep pace with technology".^xiNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 57 CMAL have suggested they have to act now to replace ships, rather than wait for the optimal technology to be available at a suitable cost.^xiNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 20 Nautilus International suggested it would be more cost effective and involve less work to vessels to get a firm strategy "locked down" and progress with cleaner technologies in the first instance rather than retrofit.^xiNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 20

307. The importance of the Islands Connectivity Plan in setting out a pathway in the form of a comprehensive, system wide strategy for vessels and ports, as well as surrounding transport and energy infrastructure, was highlighted.^xiNet Zero, Energy and Transport Committee, Official Report, 15 November 2022, Col 25, Official Report, 21 February 2023, Col 29, 34 and 41 and written submission from Highlands and Islands Enterprise The Committee believes the plans for vessel replacement and port upgrades must be ambitious, represent value for money in their longevity and be future proofed. It logically follows, these should seek low or zero-emission vessels for all ferry services in Scotland. Norway has demonstrated this can be achieved where the "political will" is there.ⁱⁱⁱWritten submission from the Norwegian Public Roads Administration.

324. Ports and harbours around Scotland are owned by a variety of different organisations which adds another dimension to complexities of ferry service delivery.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 27, Official Report, 31 January 2023, Col 8, Official Report, 7 February 2023, Col 48 We heard varying evidence on how this should be approached in the future.

325. CMAL suggested ownership of all the ports by a single body would make matters such as vessel standardisation and operation easier.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 28 However Professor Neil Kay argued that ports and harbours should not be owned or managed by a single body, such as CMAL, as management is already too distant from the ports and harbours it owns and that a locally based management body, such as a council, would provide greater in depth knowledge of local need.ⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 3 and 8

326. The Committee explored ways in which the benefits of unitary ownership could be achieved under the current patchwork system of ownership. For example CMAL was tasked with delivering weather monitoring equipment at all ports, not just the ones it owned, for the benefit of the whole ferry service.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 27, 28 and 35 While there was a suggestion this equipment was not always usedⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 43, it demonstrates the potential for standardisation in a complex ownership landscape. CMAL also highlighted attempts to future proof ports and harbours, both from predicted weather and sea level rises, but also by enlarging the ports themselves to accommodate more types of vessels.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 27

327. CalMac and NorthLink suggested standardisation of ports and harbours by way of a common interface and approach to investment would help.ⁱNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 45 Robbie Drummond used the example of standardisation in the Norwegian system as a way to derive flexibility over vessel deployment.ⁱNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 45 Port and harbour interfaces in Norway also supported automatic berthing, increasing efficiency and value for money as fewer crew were required to dock.ⁱNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 46

328. Professor Neil Kay proposed fresh ideas and strategic thinking was required and suggested long-term leasing opportunities for ports and harbours could encourage commercial operators.ⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 3 He said there was a need for a comprehensive review of the ownership and management of the ports and harbours used by Scotland's ferry operators, and this should take place separately from any consideration of service provision.ⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 15

329. Investment in port infrastructure will assist in delivering standardisation and interoperability of new and existing vessels, increasing network resilience. This investment would also contribute to reducing emissions across the ferry network and support Scotland’s net zero carbon emission targets. The Scottish Government's Strategic Transport Projects Review (STPR2) recommends an investment programme in ferry port infrastructure, including shore power supplies to ferry vessels, to support ferry vessel renewal and replacement and progressive decarbonisation. The Scottish Government as noted in the draft ICP section on vessels and ports includes proposals for major port renovations, although suggests this is not comprehensive and more work will be done through engagement with port owners to complete this work for the final plan.^xiiScottish Government (2022). Islands Connectivity Plan Long-Term Plan for Vessels and Ports on the Clyde & Hebrides and Northern Isles networks (2023 – 2045) – Draft for Consultation

330. The Committee also notes that the Scottish Ferry Plan commits to upgrades at Lochboisdale and Armadale Piers.^xiiiLetter from the Minister for Transport to the Committee providing further information following the evidence session - 31 March 2023 The IIP dedicates £306m over the five years to "project such as Ardrossan, Skye Triangle and Gourock Harbour, proposed projects at Lochboisdale, Armadale and Kennacraig, and an Oban Masterplan". Concern was also raised about pace of progress of the IIP commitments^xivWritten submission from Comhairle nan Eilean Siar leading the Committee to question the breakdown of this allocation.

331. The Scottish Government's Climate Change Plan update published in 2020 commits to "By 2032 low emissions solutions will be widely adopted at Scottish ports"ⁱScottish Government (2020). Update to the Climate Change Plan 2018 - 2032: Securing a Green Recovery on a Path to Net Zero. It states—

     "We will achieve this with our new policy to work with individual ports and the British Ports Association to consider a process for encouraging shared best practice initiatives for reducing emissions across the sector. Additionally, we will work with the ports sector and with its statutory consultees through the Harbour Order process to ensure future port developments are environmentally underpinned."ⁱScottish Government (2020). Update to the Climate Change Plan 2018 - 2032: Securing a Green Recovery on a Path to Net Zero

332. STPR2 recommends upgrades to the roads leading to Stranraer and the ports at Cairnryan, as well as "Investment in port infrastructure to support vessel renewal and replacement, and progressive decarbonisation". This suggests "This investment would also contribute to reducing emissions across the ferry network and support Scotland’s net zero carbon emission targets".ⁱⁱⁱJacobs and AECOM as commissioned by Transport Scotland (2022). STPR2 Final Summary Report

333. Examples of CMAL action on ports and harbours included—

     • Biomass boiler and solar panels at Brodick Ferry Terminal, Arran;

     • Reed beds at Portavadie provide a low-cost, zero energy wastewater treatment system; and

     • Air source heating system at Tarbert Ferry Terminal.

334. CMAL said several of their own and third party ports had been fitted with shore side power to charge hybrid and electric vessels over night, which would support the Small Vessel Replacement Programme^ivNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 30. They also highlighted the development of electrical hook-ups for large vessels, although not for propulsion but to provide electrical power while the vessel is berthed, removing the need to keep onboard diesel powered engines or generators running. Work to take energy efficiency measures and retrofit buildings with insulation and low carbon electricity and heating were also described.

335. CMAL "continually investigate improved solutions for implementation across our network" and "endeavour" to include energy saving measures in new buildings^vWritten submission from CMAL. Investigating and endeavouring do not equate to action and does not suggest the bold ambition demonstrated in evidence on action taken on ports and harbours in Norway.

336. Stuart Garrett described the progress made with the Northern Isles vessels in adaptation to battery power^ivNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 37 for electricity requirements on board the ship. Robbie Drummond of CalMac called for investment in ports to allow for vessels to be plugged in when berthed overnight.^ivNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 37 Transport Scotland said they "will look to roll that out more widely".^ivNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 57

339. During the inquiry we also sought views on improving public-funded ferry services (whoever delivers them), with a focus on the passenger experience and on the needs of ferry-dependent communities in the 21st century. We considered—

     • The process for booking a ticket;

     • Transportation of freight;

     • Integration with other forms of transport;

     • Equality of access;

     • Support in the event of cancellation;

     • Affordability; and

     • Adequately staffed.

340. The Committee heard people want it to be easier to book a space on a ferry. Proposals were put to the Committee for a ticketing system which—

     • Was integrated with other modes of transport;ⁱNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 55-56, Official Report, 21 February 2023, Col 39

     • Allowed for concessionary tickets to be booked with ease;ⁱⁱWritten submission from Linda Pearson

     • Allowed for trips to be booked door-to-door using a single online portal;ⁱNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 55-56, Official Report, 21 February 2023, Col 39

     • Incentivised desired travel patterns, such as use of off-peak sailings or travel by active and sustainable modes, including zero emission vehicles;ⁱNet Zero, Energy and Transport Committee, Official Report, 8 November 2022, Col 18 and

     • Facilitated sufficient capacity for passengers and vehicles.

341. Gordon Ross of Western Ferries also highlighted the company’s contrasting approach with CalMac as it allowed tickets to cover any vehicle and issued them without expiry dates.ⁱNet Zero, Energy and Transport Committee, Official Report, 1 November 2022, Col 29 Rob Dickson of VisitScotland foresaw ticketing becoming more sophisticated and factoring in issues like the fuel type of the vehicle, the capacity of the vehicle and the length of a stay.ⁱNet Zero, Energy and Transport Committee, Official Report, 8 November 2022, Col 18

342. The importance of "High-quality journey planning information" is highlighted in the Second National Transport Strategy^viiScottish Government (2020). Second National Transport Strategy and the Committee heard of examples of apps which would assist with integrated travel planning.^viiiwritten submission and submission on Go-Hi from HITRANS

343. The National Islands Plan includes a goal to "develop and introduce a new booking, reservation and ticketing system, with Smart Ticketing capability, to replace the existing system" for the CHFS network. CalMac told us of their work to develop the new system, which was due to be introduced in April 2023, but has been delayed.^ixPress and Journal - CalMac delays new booking system to prioritise ‘current ongoing challenges’- 19 April 2023

344. While technology was seen as important, people also highlighted the role of booking offices. Anecdotally, the Committee heard that ferries appearing fully booked online would have capacity if you asked at the ticket officeⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 5. Local expertise and assistance was widely praised in the Committee's visits and online engagement events. It was suggested local booking offices provided wider services such as tourist information. There were calls for longer opening hours.^xiThis issue was raised with the Committee on visits and in engagement events.

345. The issue of commercial bookings was raised with the Committee. The block booking system provided by CalMac allows businesses to indicate the lane space they will require on a yearly basis, despite the notion of 'first come, first serve' applying to other forms of tickets. Communities require the certainty that lorries bringing provisions will make it to islands. However, where commercial bookings were not cancelled, and space became available but unused, this contributed to frustration. It was suggested there should be financial penalties for no-shows.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 22. This issue was also raised on visits and at engagement events.

346. People called for sufficient vehicle and passenger capacity to be available on vessels.ⁱNet Zero, Energy and Transport Committee, Official Report, 1 November 2022, Col 13 and written submissions from Angus McKenzie This included for residents of island communities and visitors. Residents did not want to be stuck on islands during busy holiday periods. Consistent ability to travel throughout the year was requested.^xivWritten submissions including from Mike Protts, Stewart Hay and Gina Macdonald

347. Proposals to address this included—

     • Ferries for resident only use and specific ferries to transport visitors;

     • Dedicated spaces on ferries for island residents;^xivWritten submissions including from Ivar MacAry and Eilidh Smith. This issue was also raised with the Committee on visits and in engagement events.

     • More expensive tickets for tourists and visitors.ⁱNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 45 Helen Inkster of Pentland Ferries suggested rising fuel costs would mean fare increases were inevitable and suggested discounted travel for island residents should be examined;ⁱNet Zero, Energy and Transport Committee, Official Report, 1 November 2022, Col 32

     • Priority booking for island residents which CalMac suggested would be possible but complicated;ⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 38, Official Report, 7 February 2023, Col 44, Official Report, 21 February 2023, Col 42 and

     • Reasons for travel should be taken into account and prioritisation given to certain categories.ⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 27

348. NorthLink and CalMac both said they were contractually required to treat customers on a 'first come first served basis' (although a notable exception to this is block booking for commercial vehicles).^xviiiLetter from NorthLink to Committee in advance of evidence session - 30 January 2023 and Net Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 22 and Official Report, 21 February 2023, Col 42 Neither currently requests information on reason for travel.^xxiLetter from CalMac to Committee in advance of evidence session - 31 January 2023 and Letter from NorthLink to Committee in advance of evidence session - 30 January 2023 Views on this varied and stakeholder engagement would be key to delivering a workable solution.ⁱNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 42, Official Report, 31 January 2023, Col 36 and 38 The Committee heard of informal attempts by operators to support travel for emergency medical need.ⁱNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 26 CalMac has a protocol to accommodate spontaneous travel for particular reasons, for example medical appointments.^xviiiLetter from CalMac to Committee in advance of evidence session - 31 January 2023 and Net Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 42 CalMac also described a new Advanced Standby process which allowed for prioritisation of certain passengers in the event of a cancellation and efforts to calculate abandoned booking attempts. Transport Scotland told the Committee of pilot work taking place on Coll and Mull and Iona on release of a certain amount of deck space for those seeking essential travel, rather than booking ahead.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 53

349. Capacity on NorthLink routes in particular were highlighted as an issue.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 14, Official Report, 7 February 2023, Col 19 and 21, written submissions from Beatrice Wishart MSP and Orkney Islands Council This was partly to do with alterations to the policy on booking cabins post-pandemic.ⁱNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 20 The reasons for this were questioned as shared occupancy was allowed, just not facilitated by NorthLink.ⁱNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 49 The impact of this on concessionary allowances was also highlighted as well as calls to re-instate the previous ability to book a single berth within a shared cabin.^xivWritten submissions Beatrice Wishart MSP and Liam McArthur MSP It was proposed the Scottish Government should consult on this change if it was to be permanent.ⁱⁱWritten submission from Liam McArthur MSP

350. A further challenge for the northern isles was the transportation of freight and additional capacity to support industry and local economies, such as agriculture and fishing, was called for.ⁱⁱWritten submission from NFUS, Shetland Islands Council and ZetTrans, Shetlands Regional Transport Partnership, Stewart Building Transport Group, Beatrice Wishart MSP and Highlands and Islands Enterprise. It was put to the Committee an additional crew and a daytime service might provide additional sailing capacity.ⁱNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 20 NorthLink described complications with this such as onward travel being unavailable and proposed the solution lay in “additional tonnage”ⁱNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 49, a view shared by stakeholders.^xxxiWritten Submission from Shetland Islands Council and ZetTrans, Shetlands Regional Transport Partnership, and Stewart Building Transport Group. CMAL described to the Committee attempts to purchase second hand vehicles for the route.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 25 There was also call for additional frequency.ⁱⁱWritten submission from Orkney Island Council.

351. Businesses reported issues with transportation of goods and services—

     • The importance of reliability for time sensitive produce such as fish and shellfish;ⁱWritten submissions including from Highlands and Islands Enterprise and Liam McArthur MSP

     • Businesses and those relying on them wanted a reliable service all year round, recognising there were peaks for some industries throughout the year which also had to be accommodated;ⁱWritten submissions from NFUS, Highlands and Islands Enterprise and Bute Ferry Committee

     • The carriage of certain goods, such as timber, is also restricted in some conditions;ⁱⁱⁱLetter from CalMac to Committee in advance of evidence session - 31 January 2023 and Letter from NorthLink to Committee in advance of evidence session - 30 January 2023

     • The future needs of the renewable energy industry;

     • On visits we heard of the impact of disrupted sailings on the transportation of livestock. CalMac suggested compensation for livestock caused by delays or cancellations would be a policy matter for Transport Scotland;^ivLetter from CalMac to Committee in advance of evidence session - 31 January 2023 and

     • The largely single-track road network was unhelpful for Clyde and Hebrides routes and it was suggested additional charters could relieve the pressure on the roads in some areas.^vNet Zero, Energy and Transport Committee, Official Report, 8 November 2022, Col 2 and 22

352. There are competing interests inherent in the use of publicly funded ferries for business purposes. Residents rely on the ferries for their own transport and described frustrations at space taken up by freight and commercial vehicles. Conversely, they also rely on those shipments for essential goods and services on islands.

353. NorthLink operates separate freight vessels and there were calls to increase this capacity.^viWritten submission from Scottish Islands Federation Tensions between the movement of freight to Orkney and Shetland, and the prioritisation of each area were highlighted.ⁱWritten submission from Orkney Islands Council and Beatrice Wishart MSP

354. We heard about discussions to establish separate freight services in some areas on the CHFS network (discussed in detail in the Unbundling section of this report). Submissions to us called for individual freight services in other locations too.ⁱWritten submissions including from Comhairle nan Eilean Siar, Beatrice Wishart MSP and Liam McArthur MSP

355. The Committee was interested in how a circular economy approach might prevent the need to transport industrial goods to and from the island and discussed this with the Scotch Whisky Association on the local re-use of draff.^vNet Zero, Energy and Transport Committee, Official Report, 8 November 2022, Col 17 Highlands and Islands Enterprise said businesses were moving towards circular principles but "by their nature, islands will have an irreducible point where goods must come and go by ferry."^vNet Zero, Energy and Transport Committee, Official Report, 8 November 2022, Col 19

356. The Scottish Ferries Plan included a commitment to review freight fares on ferry services.^xiScottish Government (2012). Scottish Ferry Services: Ferries Plan (2013-2022) A working group was established and research was undertaken into various options. The research report published in 2015 stated—

     "There was a general consensus amongst stakeholders that the lane metre or lane metre equivalent should be used as the basis of the charge for all freight carried; and fares should bear at least some relationship to distance, with a view that the £/mile fare should decline with distance travelled."^xiiTransport Scotland (2015). Research and Analysis of Options for Ferry Freight Fares

357. It presented three options for consideration—

     • "Option 3: Fixed Charge (assumed at £50) plus rate per lane metre per mile based on distance threshold

     • Option 5: Constant rate per lane metre per mile within distance band

     • Option 7: Flat Fare per lane metre within distance band".^xiiTransport Scotland (2015). Research and Analysis of Options for Ferry Freight Fares

358. Minutes of the Working Group from November 2016 suggest the first of these (option 3) was the preferred model.^xivTransport Scotland (2016). Minutes of the Freight Fares Working Group 10 November 2016 HITRANS called for the work of the review to be concluded and for Transport Scotland to "implement a fairer fares solution that reduces the cost of moving freight to and from islands".^viWritten submission from HITRANS Highlands and Islands Enterprise said there was an important discussion to be had with commercial stakeholders on fares.^vNet Zero, Energy and Transport Committee, Official Report, 8 November 2022, Col 19

359. The National Islands Plan states the Scottish Government will—

     • "Develop a new Ferries Plan that will meaningfully contribute to delivering the outcomes of wider Scottish Government strategies as set out in the National Transport Strategy and this National Islands Plan.

     • As part of the next Ferries Plan, review the impacts of Road Equivalent Tariff and consider future ferry fares policy options that will meet the needs of islanders and support island economies.....

     • Subject to requirements as set out in the Clyde and Hebrides Ferry Service and the Northern Isles Ferry Service contracts, we will always strive to improve, where necessary and possible, issues relating to freight and will engage proactively with operators, communities and stakeholders as appropriate."^xviiScottish Government (2019). The National Islands Plan - Plana Nàiseanta nan Eilean

362. Better integration of ferry ticketing and timetabling with bus and rail services, and improved cycling infrastructureⁱWritten Submissions from Cycling UK and SPOKES: The Lothian Cycling Campaign, was seen as vital to reducing non-essential car use, reducing carbon emissions, and maximising vehicle space on vessels for essential business and personal travel. The Committee was told of public transport connecting with ferry travel in NorwayⁱⁱNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 18. The Scottish Government's Strategic Transport Projects Review (STPR2) has recommended a review of integration and accessibility at ferry terminals.ⁱⁱⁱScottish Government (2022). STPR2 Final Summary Report

363. In Scotland, it was said that the single track road networks on smaller islands often cannot not cope with amount of traffic disembarking from larger vessels.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 8 November 2022, Col 2 and 22, Official Report, 31 January 2023, Col 25, Official Report, 7 February 2023, Col 47 Smaller, more frequent, efficient ferry services were a potential solution to this although it was noted these did not always work with public transport.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 25

364. New or improved connecting bus and rail services were also called for.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 8 November 2022, Col 3, Official Report, 7 February 2023, Col 55 and 56 and written submission from Transport Salaried Staffs' Association (TSSA) The challenge in delivery was recognised by witnesses who suggested it would take a collaborative effort to achieve better co-ordination. The unreliability of the ferry element of a journey was highlighted as a barrier.

365. CalMac suggested they were constrained by the differing regulatory systems that apply to each mode of transport, the limitations of current infrastructure and the number of hours in the working day, but said in situations of disruption, they worked with bus companies in particular to arrange alternative travel.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 38 NorthLink said they also worked to provide an “alternative relief service” where required.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 39 Where attempts to align bus transport with ferry arrivals had been made, it was noted these services were “undermined” by the unreliability of the ferry.

366. The then Minister for Transport, Jenny Gilruth MSP, indicated this will be a key part of the Islands Connectivity PlanⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 58. She recognised the need for this to be done in a climate friendly way and mentioned shared transport hubs. One approach to relieving traffic pressures on island or small communities suggested to the Committee was the provision of shared electric vehicles for use on islands. This would reduce the requirement for many travellers to take their cars on the ferry, and facilitate sustainable travel on the islands. Considerations such as the need for better public transport on islands and the volume of traffic were also highlighted.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 15 November 2023, Col 17

367. The Committee received several pieces of evidence on how ferries contributed to wider efforts to reduce emissions^xiWritten submission from SPOKES: The Lothian Cycling Campaign and strategy on integrated transport must include wider consideration of transport emissions overall.

368. We were told any travel by road produced fewer emissions than ferry travelⁱⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 7 and written submission from Roy Pedersen. Written evidence suggested more fixed links were the solution.ⁱWritten submissions including from Beatrice Wishart MSP and Laurence Odie (Yell Community Council) It was also proposed shorter ferry journeys supplemented by longer road journeys would produce fewer emissions.^xiWritten submission from Roy Pedersen

369. Harald Høyem of Norwegian planning and engineering consultancy Asplan Viak, told the Committee some buses had priority boarding on ferries in Norway and described how fast passenger-only vessels were aligned with scheduled bus services in some areas, encouraging use of public transport.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 18

372. The importance of equality of access to ferry travel was emphasised to the Committee.ⁱWritten submission from the Scottish Islands Federation One of the issues with an ageing fleet is accessibility and we were told in Norway ageing vessels would be discounted for use on grounds of accessibility.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 21 and 23

373. The Committee heard of situations ranging from people experiencing undignified ways to board the ship to an incident where someone was placed in danger attempting to travel.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 45 - 46 Once on board, facilities for disabled travellers were not of the same standard of those for other travellers.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 45 and written submission from Lewis and Harris Sports Council. The Committee also heard about a lack of facilities for disabled travellers as part of its online engagement event.

374. In particular, problems were presented to the Committee on inter island ferries in the Northern IslesⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 8 and 28 and written Submissions from Orkney Ferries Ltd and Orkney Island Council. and Members saw for themselves the challenging conditions in which disabled travellers are placed in order to use the ferry.

375. The Scottish Government offers a Ferries Accessibility Fund which can be accessed by "Any ferry or harbour operator providing an internal ferry service". In 2023, the fund opened to applications in May and £71,143 is "available for bids from the public or private sector"^viScottish Government (May 2023). Making ferries more accessible. The Mobility and Access Committee for Scotland outlined their engagement in the development and of the Islands Connectivity Plan and proposed all "crew should be trained in how to assist disabled travellers".ⁱWritten submission from the Mobility and Access Committee for Scotland

378. Where services were cancelled, the Committee heard calls for further support with both communication and alternative transport or accommodation.

379. The importance of timely communication about disruption caused by weather is recognised in the National Transport StrategyⁱScottish Government (2020). Second National Transport Strategy and we heard on visits that cancellations, particularly for weather, were often at the last minute which causes issues for travellers.

380. There was concern that the focus was predominantly on online communication, whereas customers did not always have access to the internet. We heard of cancellation communications directing people to call centres which were not open. CalMacⁱⁱLetter from CalMac to Committee in advance of evidence session - 31 January 2023 and NorthLinkⁱⁱⁱLetter from NorthLink to Committee in advance of evidence session - 30 January 2023 both advise customers through a variety of media and state they will confirm service disruption no later than 30 minutes after an advertised departure time.

381. The Committee has also heard of a lack of support for passengers where sailings are cancelled. We were concerned by the safety implications of some of the situations described, particularly where vulnerable people or lone travellers were effectively abandoned, with no support in arranging alternative travel or accommodation.

382. CalMac highlightedⁱLetter from CalMac to Committee in advance of evidence session - 31 January 2023 the work it is doing locally with communities and Local and Regional Resilience Partnerships to support stranded passengers, as well as its Passenger Rights Scheme. NorthLink similarly pointed to their Passenger Welfare Guide. Neither include reimbursement or accommodation support where sailings are cancelled due to the weather (although NorthLink suggested they will accommodate passengers on board the vessel where possible).

383. The list of things that cannot be claimed for in the CalMac scheme includes unused accommodation, services and car hire.ⁱⁱCalMac. Passenger Rights Scheme. CalMac describes these expenses as "consequential".ⁱⁱCalMac. Passenger Rights Scheme. Business owners spoke of the challenges involved in cancelled sailings and the potential loss of revenue.

384. The Chair of the Ferries Community Board, Angus Campbell, said islanders were as deserving as all other taxpayers to receive support with transport costs and that subsidies had a role in achieving parity.ⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 37

385. People wanted reasonable fares with a need for affordable travel to and from islands for residents helping to prevent depopulation.ⁱNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 20 However, it was also suggested cost was not as important as factors such as reliability and resilience.ⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 4 and Official Report, 7 February 2023, Col 44 Fares are set by Transport Scotland.ⁱNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 33 and 34 The cost of ferry travel was highlighted to the Committee in several themes—

     • Road Equivalent Tariff;

     • Different costs for business and freight transport; and

     • Concessionary travel for young people.ⁱNet Zero, Energy and Transport Committee, Official Report, 1 November 2022, Col 33

386. The Road Equivalent Tariff (RET) was introduced in stages and was fully implemented on the Clyde and Hebrides Routes in 2015 following a series of pilots. It is—

     "a distance based fares structure, which underpins the Scottish Government's commitment to providing one single overarching fares policy across Scotland’s entire ferry network."ⁱTransport Scotland. Road Equivalent Tariff.

387. An assessment of the implementation of the scheme for the final areas of introduction published in March 2020 suggests it has "largely delivered" the original policy intentions.ⁱⁱTransport Scotland (2020). Evaluation of Road Equivalent Tariff on the Clyde and Hebridean Network The then Minister for Transport said the scheme has saved passengers £25 million per year.ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 36

388. While the report notes the general consensus that RET had a positive impact, this was not a universal opinion. Several issues have arisen as a result of RET including capacity on ferries, strain on island infrastructure and an extension to the period for advance bookings from a few days to several weeks.ⁱⁱTransport Scotland (2020). Evaluation of Road Equivalent Tariff on the Clyde and Hebridean Network The report says—

     "As well as putting cost and resilience pressure on the assets, it is leading to network-wide demands for investment in additional services, tonnage and infrastructure."

389. It is apparent that although there have been significant benefits to RET, there have also been unintended consequences putting pressure on the ferry system with increased usage and additional cost. The evaluation concludes—

     "Unless there is a policy decision to reverse at least some of the fares reductions introduced since 2008, there is a strategic choice between ‘predict and provide’ - which would be contrary to the draft National Transport Strategy and present substantial capital and ongoing operating costs - or implementing a more balanced approach of additional capacity and demand management measures (of which fares could be a part), which would represent a departure from the current RET policy. In order to aid transparency and understanding, the objectives of any fares review should reflect the findings of this, and previous RET evaluations, which could be captured in revised / new Transport Planning Objectives, reflecting the greater understanding of the scope and scale of impacts of the current fares policy."ⁱⁱTransport Scotland (2020). Evaluation of Road Equivalent Tariff on the Clyde and Hebridean Network

390. In evidence to us, the intention of this scheme was lauded but it was criticised for failing to consider the wider impacts of a sudden growth in traffic on already constrained ferry capacity.ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 6 and 7, Official Report, 15 November 2023, Col 16, Official Report, 31 January 2023, Col 20 and 21, Official Report, 7 February 2023, Col 43 and 45, Letter from CalMac to Committee in advance of evidence session - 31 January 2023, and written submissions including from Sleat Community Council It has resulted in an 11% increase in passenger numbers^viiScottish Government (2019). The National Islands Plan - Plana Nàiseanta nan Eilean and 20% increase in car traffic on CHFS.ⁱⁱTransport Scotland (2020). Evaluation of Road Equivalent Tariff on the Clyde and Hebridean Network It was noted RET did not apply to hauliers as originally intended and only applied to certain routes.ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 1 November 2022, Col 31, Official Report, 31 January 2023, Col 38 and Official Report, 7 February 2023, Col 45 and written submissions from Orkney Island Council and Liam McArthur MSP The Committee heard in evidence and on visits that the scheme had increased the number of cars being brought to islands.ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 38 It was also noted that the introduction of RET was not matched by increased vessel capacity and that further investment was needed in this regard too.ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 43 We heard that a policy like RET required additional funding, rather than maintenance of existing budgets.ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 2 It was thought to be symptomatic of a system pieced together rather than being part of a wider, holistic strategy.ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 7 and written submission from Mull and Iona Ferry Committee (Demand Management)

391. Roy Pedersen who developed the RET concept said it was a "blunt instrument" and did not support its use on Clyde and Hebrides routes.ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 20 and written submission from Roy Pedersen He called for a "market-orientated charging system".ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 20 and written submission from Roy Pedersen Several options for reform were proposed to the Committee—

     • A separate, higher tourists and campervan tariff;ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 46

     • A system akin to the Air Discount Scheme;ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 45

     • Demand responsive pricingⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 20, whereby price is used to incentivise travel on less busy services. CalMac said this was being explored with Transport Scotland to alleviate capacity constraints caused by RET.ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 34 It was suggested this demonstrated the failure to prepare for RET.^xxWritten submission from Mull and Iona Ferry Committee (Demand Management) The then Minister for Transport, Jenny Gilruth MSP, said this would be consulted on as part of the work on the Islands Connectivity PlanⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 56, which acknowledges "significant unused capacity exists year-round for passengers and, outside peak season, for vehicles too."^xxiiScottish Government (2022). Islands Connectivity Plan Long-Term Plan for Vessels and Ports on the Clyde & Hebrides and Northern Isles networks (2023 – 2045) – Draft for Consultation

392. Transport Scotland said the approach it was taking to the ICP would allow for more regular review of policy areas, including fares.ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 37 RET fares are currently reviewed annually.ⁱTransport Scotland. Road Equivalent Tariff. In the National Islands Plan, the Scottish Government has said it will extend RET to the Northern Isles "when we are able" and it will review the impacts of RET as part of the ICP.^viiScottish Government (2019). The National Islands Plan - Plana Nàiseanta nan Eilean

394. The need to both retain and attract young people to island living was highlighted as an issue in discussions on the impact of ferry services on depopulation.

395. There were calls for concessionary travel for under 22s to extend to ferry services.ⁱWritten submission from Lewis and Harris Sports Council and Scottish Youth Parliament The Committee heard representations from young people on the inequity of receiving concessionary travel for buses when limited services exist in their island communities, while not receiving a discount on ferry services.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 25. This was a prevalent theme in our engagement event with the Scottish Youth Parliament and on visits. Inter-island ferries in particular were described to the Committee as akin to bus services and young people were of the view they should have parity with young people on the mainland.

396. Young people aged 16-19 and resident in the Western Isles, Orkney and Shetland, plus islands in North Ayrshire, Argyll and Bute and Highland Council are entitled to 4 ferry journeys to/from the mainland for free (effectively two return trips) each year. This is administered through the Young Scot scheme.ⁱⁱⁱTransport Scotland. Young Scot National Entitlement Card. This is age limited so those who were 16-19 during the pandemic had limited opportunity to use it. Free travel for under 22s exists on inter-island ferries in Orkney and it was suggested a wider application should be considered.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 1 November 2022, Col 32 On visits, we heard directly from young people and their teachers, who suggested ways in which schools could support the administration of this.

398. The first recommendation of the Project Neptune report was on the need to engage local communities before decisions were taken on any of the options presented. Upon publication, the then Minister for Transport, Jenny Gilruth MSP, pledged to reform delivery of ferry services guided by a central principle of the need to involve communitiesⁱScottish Parliament, Official Report, 8 September 2022, Col 77 and the report suggested no decisions should be taken without further consultationⁱⁱScottish Government (2022). Strategic framework of options for the CHFS network - Part 2 - Project Neptune. It was announced that the Ferries Community Board would carry out a public consultation exercise on the recommendations of the reportⁱScottish Parliament, Official Report, 8 September 2022, Col 77. There was agreement on the importance of community involvement^ivNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 34 and accountability to passengers.^ivNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 27

399. The Committee and the Scottish GovernmentⁱⁱScottish Government (2022). Islands Connectivity Plan Long-Term Plan for Vessels and Ports on the Clyde & Hebrides and Northern Isles networks (2023 – 2045) – Draft for Consultation are aware of the consultation fatigue that exists. The Scottish Government said it is essential "sufficient evidence is collected to ensure the right investment decisions are made to support our island and rural communities."ⁱⁱScottish Government (2022). Islands Connectivity Plan Long-Term Plan for Vessels and Ports on the Clyde & Hebrides and Northern Isles networks (2023 – 2045) – Draft for Consultation

400. The Scottish Government previously committed to a revised communications and stakeholder strategy.^viiiLetter from the Minister for Energy, Connectivity and the Islands to the REC Committee on its report into "Construction and Procurement of Ferry Vessels in Scotland" - 25 January 2021

401. Evidence presented to us suggested formal involvement for community voices in service design and delivery through—

     • Community and union places on the Boards of delivery and decision making organisations;^ivNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 11, 13, 15 and 27, Official Report, 31 January 2023, Col 48, Official Report, 7 February 2023, Col 52, Official Report, 15 November 2022, Col 24, and written submissions from Community Land Outer Hebrides, HITRANS and Comhairle nan Eilean Siar

     • Locating management positions within these organisations in the communities they serve; and

     • Other formal and informal structures for the involvement of communities in decisions on services.

402. CalMac expressed support for islander experience on the board.^ivNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 44 The CMAL Board now includes an island-based non-executive director.^ivNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 25 and 42 The then Minister for Transport, Jenny Gilruth MSP, told us she agreed that it was important for islanders to be represented on the boards, but said this should not be in place of other engagement.^ivNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 42 Transport Scotland said boards required the right mix of skills and expertise.^ivNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 42 Stakeholders argued their lived experience of the service was ample qualification.^ivNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 52

403. Transport Scotland said they were "looking at whether there is something else we could be doing"^ivNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 43 in relation to supporting people to gain the skills and experience necessary to join the Board, which the then Minister for Transport identified as "upskilling".^ivNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 42 They said "...there was a requirement for those who came forward to demonstrate that they fully understood and were familiar with the issues".^ivNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 42

404. The Committee was also interested in exploring whether people working on and around ferries formed part of the ferry-dependent communities and the potential trade union representation on boards, replicating the model used by Scottish Rail Holdings Ltd.^ivNet Zero, Energy and Transport Committee, Official Report, 15 November 2022, Col 24 and written submission from Transport Salaried Staffs' Association (TSSA) Robbie Drummond said a place on the board for union representatives was a matter for the board.^ivNet Zero, Energy and Transport Committee, Official Report, 21 February 2023, Col 44 The then Minister undertook to speak to CalMac and CMAL about this.^ivNet Zero, Energy and Transport Committee, Official Report, 28 February 2023, Col 44 The Transport Salaried Staffs' Association (TSSA) also proposed a formal route to engagement with trade unions through a consultative council approach.^xxiWritten Submission from Transport Salaried Staffs' Association (TSSA) Several written submissions were critical of the influence already exerted by trade unions.^ixWritten submissions including from Euan Haig, Maritime Services Management Ltd (Scotland) and Roy Pedersen

405. The Committee also heard calls that management positions of delivery organisations should be based in the communities they served. This stemmed from suggestions those taking decisions were too remote from the impacts of those decisions. There were examples of people taking up positions within organisations delivering ferry services and failing to engage with or visit the communities they were employed to serve.^ivNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 31 The benefits of regular meetings between operators and stakeholders such as local authorities were highlighted, including examples from Norway.^ivNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 52 and Official Report, 21 February 2023, Col 20

406. Gordon Ross of Western Ferries provided anecdotal evidence of his accessibility as a ferry operator within his local community.^ivNet Zero, Energy and Transport Committee, Official Report, 1 November 2022, Col 29 Councillor Uisdean Robertson extolled the benefits of having the CalMac Head of Operations based in the Western Isles.^ivNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 39

407. It was also proposed operations could be based in ferry-dependent communities and suggestions included locating the Transport Scotland ferries division within an island community.^ivNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 52 Such actions were also thought to be a potential solution for depopulation issues.^ivNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 48

408. As well as formal board and management positions, the Committee is aware of other groups, including volunteers, working to improve their local ferry services. The Committee has engaged with local ferry groups and communities, and places its thanks on record to all those who generously gave up their time. These groups are voluntary and the expertise developed by those participating in them is much appreciated. The Committee heard these groups were helpful^ivNet Zero, Energy and Transport Committee, Official Report, 8 November 2022, Col 6 and written submission HITRANS but also views there were too many small groups and a pooled effort may have more impact.^ivNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 53

409. The then Minister for Transport, Jenny Gilruth MSP, praised their efforts and acknowledged—

     "the Government—and the organisations that run ferry services on our behalf—need to do better at engaging with, listening to and acting on island communities’ needs."ⁱScottish Parliament, Official Report, 8 September 2022, Col 78

410. One way in which efforts of these groups may be pooled is the Ferries Community Board, from whom the Committee took evidence. Initially set up by CalMac as part of the CHFS contract^xxxiiCalMac. Ferries Community Board Terms of Reference., the Chair of the Board said it has evolved into an independent group due to its engagement with organisations beyond the operator.^ivNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 28 He noted that since then support has been lacking.^ivNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 32 The independent nature of the group was cited as important by stakeholders.^ivNet Zero, Energy and Transport Committee, Official Report, 28 June 2022, Col 13, 26 and 27, and written submissions from Comhairle nan Eilean Siar

411. The Chair added it had taken a while for the board to find its purpose due to being initially constituted in a top-down fashion.^ivNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 29 He believed it now understood community need and had achieved influence. He indicated the Board had been engaged on the Islands Connectivity Plan and the Chair is running a consultation exercise on Project Neptune. However, challenges were identified as ferry delivery structures were not well set up for consultation^ivNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 31 and "it is quite difficult to always talk to individual parts"^ivNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 40 of the Tripartite arrangement. Members of the Board said its existence suggested there were problems with service delivery^ivNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 31 and formal engagement structures with island communities should improve.^ivNet Zero, Energy and Transport Committee, Official Report, 31 January 2023, Col 30

412. Scottish Government convenes an Islands Strategic Group and a National Islands Plan Delivery Group. The Chair of the Ferries Community Board sits on the latter.

413. Comhairle nan Eilean Siar and HITRANS called for the Islands Transport Forum to be reconvened.^ixWritten submissions from Comhairle nan Eilean Siar and HITRANS There was formerly a NIFS User Group which met 2-3 times a year and Orkney Island Council called for this to be re-established.^xliiWritten submission from Orkney Islands Council The then Minister for Transport, Jenny Gilruth MSP, announced in September 2022 she would re-establish and refresh the Islands Transport Forum.ⁱScottish Parliament, Official Report, 8 September 2022, Col 78 It is not clear if this group has met or what its renewed role or remit may be.

414. Communities and stakeholders may benefit from coherent and independent oversight of how advocacy informs decision making. Although we have received minimal evidence as part of our inquiry^ixWritten submissions from Catherine Puxley, Colin Spear and Alan Graham., the Project Neptune reportⁱⁱScottish Government (2022). Strategic framework of options for the CHFS network - Part 2 - Project Neptune has suggested one way to achieve this would be a commissioner or regulator model. This option scored highly in terms of deliverability, accountability and transparency and value for money, although is requires further research on supporting the passenger experience. The report describes the advantages as—

     • Would be an easily identifiable body with oversight of the whole system of ferry delivery in Scotland;

     • It could drive improved performance depending on role (although caveat of comparisons with energy was applied);

     • Could adopt some of the responsibilities of Transport Scotland (which the Committee considers could be an opportunity to enhance expertise in decision making);

     • Could provide independent perspective and increase accountability and transparency;

     • If required to consider spending on new vessels, it could increase chances of vessels being "fit for purpose";

     • Could achieve efficiencies; and

     • Is a system replicated in other public transport delivery such as rail.

415. It adds however that—

     • A full economic assessment would be required to establish how savings could be achieved as compared to the potential cost of a new body. The report notes however "an effective commissioner should be capable of driving efficiencies in the sector that are greater than its operating costs. If this is achieved, then the net impact should be positive.";

     • Another body could increase confusion as to responsibility;

     • The initial Project Neptune evaluation "has not found justification for the more expansive regulation that would be present under a Regulated Asset Base, particularly if the desired outcomes can be achieved with more limited regulation".

416. It was suggested that some of the perceived benefits of unbundling could be improved with more flexibility within the current contract structure, localised decision making^ivNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 39 and community involvement.^ivNet Zero, Energy and Transport Committee, Official Report, 15 November 2022, Col 12

428. The Committee experienced first hand the importance of the council-run ferry services during its visits to Orkney. People described the inter-island ferry services as akin to roadsⁱWritten Submission from Yell Community Council. or a bus service and said they expected the same level of service as residents of Edinburgh, for example, might expect from Lothian Buses.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 25 There was praise for the services operated by councils and local authorities felt they were positioned to engage with and respond well to community need.ⁱNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 38 and 49 and Written Submissions including Orkney Island Council. They deliver some of the busiest ferry services in Scotland.

429. Inter-island ferry services across the Orkney archipelago are provided by Orkney Ferries Ltd. 100% of the shares of Orkney Ferries Ltd, a private limited company, are owned by Orkney Islands Council and all five seats on the company Board are occupied by Elected Members.

430. Orkney Ferries Ltd can trace its history back to the Orkney Steam Navigation Company Ltd (OSNCo), a private company established in 1867 to provide services between Kirkwall and the North Isles of Orkney. During the early to mid 20th Century ONSCo services received considerable taxpayer support and new vessels were Government funded. In the 1950s concerns were raised about the level of service provided and a consultant report concluded the company could not raise the capital to replace the ships.^iv‘Transport Services to the Orkney North Isles’, Report by William MacGillivray, Managing Director, Prince Line Ltd, 22 July 1957

431. OSNCo was wound up in 1962 and a new company, the Orkney Islands Shipping Company Ltd – a Government supported non-departmental public body, was formed with local and Government-appointed directors. Levels of taxpayer support for the continued operation of services and the purchase of new vessels was set out in an “undertaking” between the Secretary of State for Scotland and the company.

432. Orkney Islands Council assumed ownership of the Orkney Islands Shipping Company on 1 April 1987, acquiring the share capital of the company and its vessels. Again, levels of UK Government support for continued service provision were set out in an understanding between the Council and Secretary of State for Scotland. The company changed its name to Orkney Ferries Ltd in 1995.

433. The historical position of ferries in Shetland has been harder for the Committee to track, but it is clear that council-run ferry services on the islands date back many decades.

434. Several challenges for council-run services were presented to the Committee—

     • Councils experience the same challenges as government run routes with regard to the age and accessibility of their fleets, and linked to this was the levels of revenue funding provided to local authorities to run services and capital funding to replace vessels;^vWritten submission from Scottish Islands Federation

     • The disparity between treatment of routes falling within the CHFS and NIFS networks and council-run services in terms of Scottish Government support;ⁱWritten Submissions Written submission from Shetland Islands Council and ZetTrans, Shetlands Regional Transport Partnership, Orkney Island Council. and

     • Lack of clarity over the ability to transfer council-run ferry services to the Scottish Government.

435. Solutions presented included—

     • Provide levels of capital funding sufficient to support robust vessel replacement plans.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 59, Written Submissions from Orkney Islands Council, Orkney Ferries Ltd, Beatrice Wishart MSP and Liam McArthur MSP The descriptions of vessels being used does not suggest operators have confidence in their boats and for some replacement is an urgent needⁱⁱNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 41 and written submission from Joint response covering Shetland Islands Council and ZetTrans, Shetlands Regional Transport Partnership;

     • Continue to commit to provision of full revenue funding.^vWritten submission from Orkney Islands Council The Committee heard concerns about rising costs of operating services^vWritten submission from Joint response covering Shetland Islands Council and ZetTrans, Shetlands Regional Transport Partnership and some ferries are not operating to optimum levels of service suggested by the Route and Services Methodology;^xiWritten submissions from Orkney Island Council and HITRANS

     • Shetland Islands Council reiterated their position that, in the longer term, ferries were not their preferred option for the long-term on shorter routes, arguing that fixed links would ultimately provide both better connectivity and lower whole-life costs (see the FIXED LINKS section of this report for further details);^vWritten submission from Joint response covering Shetland Islands Council and ZetTrans, Shetlands Regional Transport Partnership

     • Funding allocations should be confirmed for several years in advance to allow for planning;^vWritten submission from Orkney Islands Council

     • Scottish Government should develop a minimum service standard and provide funding to allow councils to deliver service to at least that level;^vWritten submission from Orkney Ferries Ltd and

     • Collaboration through a working group on all revenue funded lifeline services in Scotland to ensure consistency of service.^vWritten submission from Orkney Islands Council

436. Funding for local authorities is derived for the most part through the block grant provided by the Scottish Government. The Scottish Government also—

     "...set the allocation and distribution of Specific Grants in connection with specific policy initiatives and expectations. The grants can only be used for specific services, so are known as ring-fenced funding."^xviScottish Government. Local Government Revenue

437. Support for operation of inter-island ferry services falls within this specific revenue funding. HITRANS highlighted positive engagement from the Scottish Government in providing revenue funding support for local authority services. However, it notes funding provided in 2018/19 and said—

     "In each subsequent year the settlement has increased with allocations for each local authority varying each year depending on information supplied in support of their request for funding support, and the outcome of negotiations between the councils and officials in Transport Scotland. For the 2022/23 budget the Scottish Government has agreed to provide the four local authorities with a specific ring-fenced revenue grant funding support for ferry funding of £32.095m. This sum is less than each council’s full ask submitted to Transport Scotland for ferry funding support, including allowance for fares at Road Equivalent Tariff rates where relevant, but still represents a significant increase from 2018-19 levels when all support was through the Grant Aided Expenditure (GAE) mechanism."^vWritten submission from HITRANS

438. Others, such as Argyll and Bute Council, also noted the Scottish Government had not offered what councils had requested to cover the cost of ferry services.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 53, Written Submission. Liam McArthur MSP

439. In the Stage 3 debate on the Budget Bill in February 2023, the then Deputy First Minister, confirmed the Scottish Government would provide full revenue funding for inter-island ferry services and would work with local authorities on establishing the levels of funding required.^xixScottish Parliament, Official Report, 21 February 2023, Col 13 The Scottish Government has also established Task Forces with the Northern Isles councils on long-term plans for replacement of their ferry fleets.

440. In emergencies, the Scottish Government has had to step in to support councils, as shown with the recentⁱⁱNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 40 collapse of Highland Council's Corran Ferry Service^xxiBBC. Military accepts plea for lifeline Corran Ferry support - 20 April 2023. The Council told us the service was "hanging by a thread" on 7 February and both vessels used to operate the service were broken down from 15 April until 1 June, when the secondary vessel, the Maid of Glencoul, resumed service.^xxiiHighland Council - Maid of Glencoul due back in operation at Corran Narrows - 1 June 2023 Highland Council sought support from the UK Ministry of Defence and the Scottish Government.^xxiBBC. MoD asked for help to provide lifeline Corran Ferry service -16 April 2023.

441. The previous Ferries Plan (2013-2022)^xxivScottish Government (2012). Scottish Ferry Services: Ferries Plan (2013-2022) included provision to transfer responsibility for ferry services from local government to the Scottish Government. This was subject to various criteria including the service being considered 'lifeline' and agreement on transfer of ownership of surrounding infrastructure and revenue. Highland Council told the Committee it had applied to transfer responsibility for the Corran Ferry but was thwarted by lack of capital funding to replace vessels.^vWritten submission from Highland Council Having received assistance for this through the SVRP, it sought assurance the option of transfer would remain open in the Islands Connectivity Plan.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 41 and written submission from Highland Council However, the £62m required to replace the vessels is not yet in place. Shetland Islands Council suggested it was no longer keen on transfer of responsibility due to a perceived lack of proactivity from Transport Scotland.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 34 Orkney Islands Council thought ownership and vessel responsibility could be transferred while local authorities retained operational control.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 34 and written Submission. Orkney Island Council It said discussions were ongoing.^xxixWritten Submission. Orkney Island Council For Highland Council and Argyll and Bute Council, a hybrid option involving outsourcing operational services for council owned vessels was preferable.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 38 and 49

442. The ability of local authorities to provide a service in a cost effective and efficient manner was highlighted.^viiWritten Submissions from Shetland Islands Council and ZetTrans, Shetlands Regional Transport Partnership and Orkney Islands Council Because island councils are seen as more accessible and responsive than distant national bodies such as CMAL, their role in running ferries has been welcomed by some as a good model. There have been calls for more council involvement in ferry services and harbour ownership.^vWritten submission from Shetland Islands Council and ZetTrans, Shetlands Regional Transport Partnership

448. In some cases it was suggested tunnels and bridges should be constructed as opposed to committing to new vessels on some short routes.ⁱWritten submissions including from Alasdair Allan MSP, Highlands and Islands Enterprise, NFUS and HITRANS. These were seen as convenient and reliable. It was also suggested fixed links would attract people to island life and help address depopulationⁱⁱNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 36.

449. Stakeholders reported that engaging with Transport Scotland on the issue of fixed links and funding had been difficult.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 32 Some suggested the Scottish Government should give consideration to these as part of the Islands Connectivity Plan.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 8 November 2022, Col 15 The STPR2 contains a recommendation to explore the potential of fixed links in the Sounds of Harris and Barra and between Mull and the Scottish mainland.^vJacobs and AECOM as commissioned by Transport Scotland (2022). STPR2 Final Summary Report

450. Other options and possible locations for fixed links are ruled outwith scope of the STPR2. The STPR2 Island Community Impact Assessment suggests other islands will benefit from fixed links being built, allowing the reconfiguration of the existing ferry routes to create land bridges^vJacobs and AECOM as commissioned by Transport Scotland (2022). STPR2 Island Communities Impact Assessment (ICIA) Final Report December 2022. Inter-island fixed links in the Northern Isles were considered outwith the scope of STPR2 "as it would not reduce the operating costs of the CHFS or NIFS network"^viiJacobs and AECOM as commissioned by Transport Scotland (2021). STPR2: Initial Appraisal: Case for Change – National Report Appendix D: Options Sifted Out of STPR2 and "they are local services in the same way as other transport provision is in other local authorities".^viiiScottish Parliament, Official Report, 26 January 2023, Col 63

451. Several written submissions highlighted the success of development of a network of tunnels in the Faroe Islands as an example to be replicated. A network of tunnels to connect as many as possible of the archipelago's 18 inhabited islands was started in the 1960s. The most recent to be completed is the 6.6 mile Eysturoyartunnlin network which connects the islands of Streymoy and Eysturoy^ixBBC. Faroe Islands: Inside the undersea tunnel network - 4 December 2020. Estunlar, the company which built the tunnels, noted it reduced the travel time from the capital Tórshavn to Runavík/Strendur from 64 minutes to 16.^xEystur og Sandoyartunlar. The Eysturoy tunnel A second tunnel is due to be completed in late 2023.^xEystur og Sandoyartunlar. The Sandoy tunnel

452. Some Members of the Committee met with delegates from the Faroe Islands at the Arctic Circle Assembly last year and discussed the role of fixed links. We heard of the transformative effect tunnels had on previously isolated and declining communities, contributing to more economic activity, better access to public services, and better life quality all round. There are tolls although the long-term aim is to make the tunnels free to use. Tunnels are funded through public-private partnership. Loans are taken out and underwritten by the government, with ultimate backing from the Danish Government.

453. We heard that councils and community councils are conducting or have conducted individual assessments of viability of fixed link options in their areas.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 8 November 2022, Col 15, Official Report, 7 February 2023, Col 28, 30, 36 and 50 and written submission fromWhalsay Community Council Advocates suggested these demonstrated the value for money provided by fixed links as opposed to replacement ferry services in the longer term.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 29 But unless capital is forthcoming from the Scottish Government, few if any such projects are likely to progress.

454. Of those potential links being explored, the then Cabinet Secretary for Net Zero, Energy and Transport, Michael Matheson MSP, said local community engagement in this investigation would be important.^viiiScottish Parliament, Official Report, 26 January 2023, Col 61 He said the review would consider the costs of fixed links compared with replacement ferries^viiiScottish Parliament, Official Report, 26 January 2023, Col 59 and indicated timescales for this work would be confirmed in "coming months".^viiiScottish Parliament, Official Report, 26 January 2023, Col 62 Again this comparison of the cost benefits of fixed links as opposed to ferry services could deliver more were it done on a comprehensive basis.

455. Stakeholders on Shetland advocated fixed links to replace several inter-island ferry services.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 June 2023, Col 14, Official Report, 8 November 2022, Col 15 and written submissions from Yell Community Council, Beatrice Wishart MSP, Joint response covering Shetland Islands Council and ZetTrans, Shetlands Regional Transport Partnership and Whalsay Community Council Shetland Islands Council suggested funding allocated to a report considering tunnels as part of wider connectivity by the local authority demonstrated the importance of these to local communities.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 30

456. Highland Council suggested a bridge was a long-term ambition but in the meantime the Corran Ferry needed to be replaced.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 7 February 2023, Col 49 This proposal was not put forward for recommendation in the Scottish Government's Strategic Transport Projects Review (STPR2) on the grounds improved connections to the Ardnamurchan peninsula would better address the issue.^vJacobs and AECOM as commissioned by Transport Scotland (2022). STPR2 Island Communities Impact Assessment (ICIA) Final Report December 2022

457. There were also questions about whether the plan would encompass all forms of transport to islandsⁱⁱNet Zero, Energy and Transport Committee, Official Report, 15 November 2022, Col 18, such as air links. For some areas, a flight is not available and ferries are the only option. However, where air transport is available, people had various comments, including—

     • Good for moving peopleⁱⁱNet Zero, Energy and Transport Committee, Official Report, 8 November 2022, Col 15 but the air discount scheme should apply to businesses;ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 8 November 2022, Col 14 and written submission from HITRANS

     • Air travel was expensiveⁱWritten submissions from Shetland Islands Council and ZetTrans, Shetlands Regional Transport Partnership and Mobility and Access Committee for Scotland, even with the air discount scheme;^xxvWritten submission from Comhairle nan Eilean Siar

     • You could not take vehicles or freight;^xxvWritten submission from Shetland Islands Council and ZetTrans, Shetlands Regional Transport Partnership and

     • The climate change implications of promoting air travel should be accounted for and it should be for emergency use only.ⁱNet Zero, Energy and Transport Committee, Official Report, 8 November 2022, Col 16 and written submissions including from Mike Protts and The Tartan Road Limited

You can read Minutes of the Committee's meetings at the Scottish Parliament website: Net Zero, Energy and Transport Committee - Meetings

Meetings at which evidence was taken

• 28 June 2022 - Islands community representatives

• 1 November 2022 - Independent ferry service operators

• 8 November 2022 - Business, trade and tourism representatives

• 15 November 2022 - Trade union representatives

• 31 January 2023 - Independent experts, followed by members of the Ferries Community Board

• 7 February 2023 - Local authorities involved with operating Council-run services or affected by the delivery of ferry services

• 21 February 2023 - Experts on Norwegian ferry services, followed by CalMac Ferries and NorthLink Ferries

• 28 February 2023 - Caledonian Maritime Assets Ltd (CMAL), followed by the Scottish Government.

The Committee ran a call for views which closed on 26 August 2022. You can read 388 published responses at the Scottish Parliament website: A modern and sustainable ferry service for Scotland - Published responses

All correspondence received as part of the inquiry is published and available to read at the inquiry homepage: A modern and sustainable ferry service for Scotland - Net Zero, Energy and Transport Committee (Scottish Parliament)

Scottish Youth Parliament – Online Engagement Event – Themes – 17 January 2023

Cost

• Ferries were described as equivalent to bus services for young islanders

• Where overnight stays are required due to timetables not aligning with activities, the cost can be prohibitive to participation

• Taking a car is expensive

• Cannot visit friends who live on islands due to costs

Access to goods and services

• Sometimes deliveries of goods cannot be made to island communities

• Extra-curricular activities - competitions take place on the mainland so travel is required

• Access to health care

Reliability

• Age of vessels and unreliability caused by breakdown or maintenance

• Cancellations due to weather

Safety

• Whether young people, particularly young women, feel safe on public transport

• Increased lighting at transport connections

Ferry travel passes

• There were calls for free ferry travel for under 22s as with buses

• It was noted the benefit of free bus travel did not extend to islanders in the same way as other parts of the country because of a lack of bus service

• There were calls for the extension of the existing scheme of offering 2 free returns to young islanders and linking a discount on all journeys to Young Scot cards.

Priority travel for local communities

• Reserve a number of places for island residents to travel on and off islands

• Discounted or free travel for island and peninsula residents, potentially funded by a surcharge for tourists

Alignment of public transport

• Bus timetables and ferry timetables should align

• Integrated ticketing was proposed (and thought to encourage increased use of public transport in general)

Technology

• Wi-Fi on ferries

• Create an app for ferry travel to provide updates on where the boat is and whether it is delayed

Sustainability and fuel sources

• Currently used LPG but it is shipped

Island Communities – Online Engagement Event – Themes – 17 January 2023

Reliability

• Ferry services are unreliable

• Ferries should connect with other modes of travel easily

• The issue of weather-related cancellations was raised, including whether the type of vessel had an impact and whether catamarans were more reliable

• Where sailings are cancelled, people called for more support. This included in situations relating to medical appointments

• Delays to medical treatment because of ferry service cancellations was also raised

• Need bespoke contingency plans depending on the service

• Want a year-round service

• People are incurring additional costs when travelling because they are going a day or two early to ensure they are able to travel

Resilience and flexibility

• Want more smaller vessels with flexible timetables

• More frequent sailings were called for

• A resilient crew base is required to prevent cancellations and delay for crew related reasons

• Want sailings which run earlier in the morning and later at night, and longer stopovers would facilitate day return trips

• People in some areas felt others were prioritised in terms of contingency plans

• Vessels could carry people during the day and freight at night

Fares

• Discounts and vouchers for concessionary travel should be maintained

• Ferry travel should be free for under 22s

• Strategic thinking about fares should be implemented (example of introduction of the Road Equivalent Tariff)

• Examples were provided on where even with concessions, fares were still unaffordable

• Increases in freight costs were linked to increased costs for local businesses

Capacity

• It is hard to book a cabin on NorthLink ferries

• Hard to travel with a car

• Allow for short notice travel, which can be hard at the moment

• This is especially true during peak tourist season

• Makes it hard to attend medical appointments

• Business or service requirements

• Lack of capacity can inhibit travel for education, work and extra curricular activities. Such restrictions can have a negative impact on mental health

• There should be freight-only services to free up space on passenger ferries

• Tourists to be welcomed and valued, but has to be balanced against local need to travel on lifeline services

• Operators should understand the purpose of travel of people and goods

• Priority should be given to people depending on resident status or reason for travel

• Penalties should be applied for business no-shows

• Lack of capacity for disabled travellers, which was linked to poor accessibility in general

Sustainability

• There was support for sustainable and fuel efficient systems, providing this was not at the expense of better services

• In the long-term, ferries with sustainable propulsion systems were sought including electric and hydrogen

• Supporting infrastructure should also be sustainable (loading vehicles were example provided)

• Should be able to lease electric vehicles to travel on an island to reduce need to bring own vehicles and to promote sustainable travel

• The carbon considerations of ferries need to take into account the distances travelled to use particular routes or land based alternatives where available

Communication and engagement with island communities

• Calls for local understanding of the short, medium and long-term plans for ferry services

• Local communities should benefit from employment opportunities presented by the ferries

• Decision making bodies should include local representation, including business interests

• Communities should be at the heart of decision making and involved in every step of process

• Management should be based in the communities they serve

Ferry replacements

• Support for announcements of new ferries

• Concern at the timescales for procurement

• Should consider the available harbour infrastructure during procurement process

• Concerns raised at the expertise of those making decisions on ferry procurement

• Master mariners and local crew with knowledge of sea conditions should be involved

• Local communities should be involved and development trusts were cited as a good source of expertise

• Communities were grateful for the new ferries coming into service but were concerned at the timescales and questioned what was to happen in the meantime

• Calls for more second-hand vessels

• Innovative thinking about vessel use, such as on a loan or leased basis, is needed

• Vessels should be capable of transporting the type of vehicle that wish to travel to a certain area without loss of capacity or service levels (examples given were hauliers, camper vans and ability to accommodate growing private vehicles)

• Concerns raised about funding to replace council ferries

Crew

• Accommodation should be provided onshore

Tripartite structure

• Should be revised

• Lack of accountability and no incentive to provide an excellent service

Council services

• Concerns were raised over funding for council run ferry services

• Was noted councils often had lived experience among decision makers but it did not always feed into service

Private ferry services

• Lessons should be learned from private operators’ service models

Fixed links

• Ongoing costs of ferry services are not sustainable so must look at alternatives

Onward Travel

• Ferries should be link up with onward travel and it was emphasised the ferry is part of the journey

Cultural

Once lost, confidence in travel to islands takes a long while to return.

The cost of the lost confidence to local business is not quantified.

Consultation fatigue is an issue-

• People are really knowledgeable about the ferry services because they have to be;

• Meeting multiple transport ministers;

• Lack of access to decision makers.

Communities felt services, vessels and terminal building designs have been imposed on them and wanted different options and co-design. Communities did not feel they were listened to or that their representations had made a difference.

People in island communities called for equality of treatment, and said they were not prioritised, either in comparison to people living on the mainland or people living on larger/more populated islands.

Communities do not necessarily care about the process, they just want things done. Current system was not innovative in finding solutions and had a “no can do” attitude.

There should be community representation on boards of lifeline services.

Depopulation

People are leaving islands and directly citing ferry services.

It is expensive to live on an island and the further you go from the centres of population, the worse this becomes. Roles on the mainland are paying more than equivalents on the islands, including for some publicly funded services.

Young people are choosing to leave resulting in demographic issues.

Planning to travel

Booking travel on a ferry

This is essential, especially if you want to take a vehicle.

Reasons for travel are not given consideration for example emotional, health, bereavement etc. The need to attend medical appointments at short notice is not given any weighting in booking currently.

Islanders who need to book travel at short notice should have a mechanism to do this.

There’s no additional capacity added for things like special long weekends, school holidays or other predictable points when demand may be higher for ferry services.

Local relationships were important in accessing ferry travel at short notice.

People said where ferry offices were staffed, staff were helpful.

Situations where people are unsuccessful in making a booking, and their reasons for travel, are not recorded. This would show when and why additional sailings are needed.

Assistance requirements

It was suggested those with disabilities, access issues (such as prams) or mobility issues should receive priority boarding onto ferries.

People reported finding it difficult to get out of their car because of the proximity to other vehicles once parked on the ferry.

Disabled travellers can often be last off the ferry which means potential delays and being last in a queue of traffic once on the island/road on the mainland.

Prioritisation of island communities

Island residents should have priority when booking onto the ferries.

Should be focus on and special assistance for business customers

Capacity on boats

During the pandemic the mezzanine level on the MV Hebrides was closed. The information provided on why and the decision making process were questioned.

Road Equivalent Tariff

Means people will bring multiple cars and load up with goods they are then not buying on the island.

Transport on islands

Bus services are not reliable or sufficiently connected in some areas. It was felt there is a lack of incentive for a commercial organisation to take on an island bus service.

Young people noted their counterparts on the mainland or in places with reliable bus services were offered free travel on that mode of transport, but they did not receive an equivalent for the ferry and there were no buses for them to take. This meant they were not deriving the same benefits as young people elsewhere despite the fact inter-island ferries are the equivalent of bus travel for young islanders in some places.

Changes to flight routes put additional pressure on the ferry services. It was suggested transport should be looked at as a whole system on islands, from travelling from the mainland to how people moved around once there. Suggestions included improved electric private vehicle and public transport infrastructure, and timetables that complemented one another. The Committee heard examples such as coach services on the mainland not waiting for delayed ferries and the train into a port town arriving five minutes before a ferry leaves.

Innovative thinking around fixed links was called for, including utilising these for renewable energy generation too.

Cancellations

Notice given – time

Where ferries are cancelled, communities reported this being at relatively short notice either in comparison to the next alternative or to the time of the cancelled crossing.

Notice given – means of communication

Not everyone is connected to the internet, or has a smart phone. It was suggested this was not an issue with connectivity, but with accessibility or ability to use digital tools.

Island communities are relying on each other to stay informed.

The Committee was told of services where a text message is sent to inform people of cancellations and asks them to phone a call centre, but the call centre is often not open.

Reasons for cancellations

Services are being cancelled on the basis of weather more frequently than in the past.

Factors included in this decision may be—

• Conditions at sea and in open water; and

• Conditions at the harbour and whether the vessels can easily and safely dock in certain weather conditions and wind speeds. It was suggested local skippers/masters were more confident making crossings in all weathers because of their knowledge of the area.

Where vessels required refits, residents were frustrated where alternative vessels were not sourced.

Support provided on cancellations

Communities reported a lack of support when services are cancelled often leaving people in vulnerable situations. It was suggested the contract for ferry services should include a requirement to provide compensation and support in the event of cancellations. Currently compensation arrangements do not include the accommodation, transport or activities passengers did not manage to reach. This can impact on tourism businesses on islands and the Committee heard anecdotes of full bus groups being unable to travel to their accommodation on islands and there being no support for the cancellation of those bookings.

Contingency

Lack of contingency vessels or options where services are cancelled.

Services on islands

Construction

Hard to persuade contractors to work in island communities or for this to be affordable.

Cannot transport timber or livestock in some conditions The Committee was told some quotes included days of extra work for a single day job because contractors had to factor in potential delays in getting on or off an island.

Domestic renewable energy sources

Either hard to find someone to install these or prohibitively expensive.

Access to goods on islands

Cancellations sometimes mean delivery drivers do not have enough time to distribute goods and leave the island. This can result in them not coming which leads to shortages of goods like food and car/domestic heating fuel.

Where hauliers rely on a particular service and that is routinely cancelled, this has an impact on the stock available in shops on the islands.

Can often be nothing on shelves and people on low incomes cannot afford to stockpile.

If there is a run on goods in shops, automated ordering system will automatically request the same thing for the next week which can lead to food waste.

Once deliveries are made, those who can go straight to the shop have choice whereas those working all day cannot get there until later and can find there is nothing left or no choice.

Can be especially hard to get specialist things such as gluten free options.

There was a preference for local haulier firms to provide services due to their knowledge of the islands and the people.

Healthcare

Use of helicopters to move people to mainland for treatment becoming more common because ferries cannot be relied on.

It is hard to recruit healthcare professionals to work on islands because they either have to commit to living there or risk not being able to travel to the island. Where staff do not live on an island, ferry disruption is resulting in missed appointments for services like home care.

The unreliability of the ferry service is detrimental to people’s mental health.

Ferry services do not join up with clinics or mass services on the mainland. This can mean travelling several days in advance to guarantee your attendance and limited expenses are available.

Education

Hard to recruit teachers

Sports and recreation

Hard to compete in sports or other competitions (choirs etc) because you cannot travel to mainland or encourage other competitors to the islands.

Also hard to find accommodation on mainland/island for teams or groups of competitors, and cannot rely on same day ferry services.

No discount for buses of young people.

The cost of travel to attend sporting lessons was described as prohibitive if this involved travel by ferry and potential overnight stays.

Tourism

The needs of tourists and those of island residents can conflict. Communities told the Committee of the need for balance between their needs.

Communities reported wanting to be tourists in other parts of the country or world, but being unable to get off the island during peak seasons.

Agriculture

Livestock can be lost on route due to delays caused by ferry cancellations. Specialised livestock ferry services for all islands was proposed.

Suggested service improvements

Strategy and planning of ferry service delivery

Tenders for improvements to harbours required to accommodate new vessels was not taking place to simultaneously deliver harbours and vessels, and did not always align.

Tendering for new vessels not taking place sufficiently early and leaving a lack of capacity in the system.

Planning of services should involve ferry users and—

• This should involve representation of island residents on the boards of ferry operators;

• Meaningful consultation and a demonstrable result of how this contributed to change;

Freight only services

• It was suggested these could take place through the night

• Subsidies should not benefit those making a profit from ferry services and it the cost of travel should be means tested.

Re-open the mezzanine deck on the MV Hebrides Subsidies should be for supporting locals to travel on and off islands.

Participants in Orkney called renewal of aging council fleets and harbour infrastructure, including to improve accessibility. It was also proposed the renewed vessels should be more environmentally friendly and suggested Scotland should be looking at what Norway are doing around low emissions ferries as a marker to aimed for. Hydrogen also thought to be a key part of the future of inter-island ferry services.

Tripartite system of management and delivery

Should be streamlined.

Lack of confidence in the leadership, management, skills and results of the current system.

Too cumbersome to deliver change at the pace needed. The speed of movement within the system was slower than in private sector and it was proposed this was due to the lack of requirement to make a profit.

CMAL own some piers and harbours and it was suggested the Scottish Government should own piers to allow for different services to access them. Changes to the contract, even minor service changes like a 15 minute time difference, require a contract variation. People felt they should have more say in contract variation.

Impact of the UK leaving the European Union on the tri-partite structure

All boats and ports should be compatible.

It was suggested a proportion of the members of the board of CalMac should be required to live in island communities. People commented on the ability to work remotely now and how this strengthened the argument ferry related roles should be based in the communities they serve.

Vessels

In certain areas, preferences were expressed for more smaller vessels rather than one large. Communities were well aware of their requirements and demonstrated expertise in types of vessels. The suggested benefits of this were—

• Increase the number of scheduled sailings;

• More resilience and capacity if there’s an issue with one boat;

• Able to dock in more harbours;

• It was suggested there should be sufficient capacity in the system to allow boats to take a day in dry dock for maintenance.

Need to build vessels which are future proofed. For example, new ferries are still going to have diesel engines or run on LNG which is hard to store.

Vessels should be powered using renewable sources and the people required to run and maintain this should live on islands to mitigate depopulation.

Tendering

Adapting and renovating a vessel to re-purpose it can cost almost the same as buying a new vessel.

Crewing arrangements

On some vessels, staff live on board.

Some passenger facilities have been removed to make way for facilities for staff who live on board.

Working on ferries

Concerns were expressed about recruitment exercises for new boats not happening quickly enough to ensure adequate staff when they are ready.

Shore based accommodation could be built and cost of this could be compared to cost of building a bigger boat.

460. Section of the Islands Connectivity Plan	Timescales for consultation and finalisation
     ICP document	A draft for formal consultation will be published "later in the year"
     Long -term plan for vessels and ports	A final version will be published by the end of the year and it will take account of the outcomes of the community needs assessments
     Community Needs Assessments and Market Assessments	These will be commissioned "during 2023"
     Fares Policy	This "will be explored as other parts of the ICP continue to be developed". The Minister notes the Fair Fares Review "continues"
     Connecting and onward travel	A scoping document will be developed in the "first half of 2023" and engagement will take place over the summer
     Low carbon plan	A draft plan will be completed by summer 2023 to fit the timetable of development of the next climate change plan.

There are currently 40 vessels deployed on the CHFS and NIFS services: 35 on CHFS and 5 on NIFS; these are all owned by Caledonian Maritime Assets Ltd (CMAL) except for 3 passenger vessels(*) serving Dunoon and Kilcreggan (the Gourock-Dunoon vessels are owned by CalMac’s parent company, David MacBrayne Ltd, and the Gourock-Kilcreggan vessel is owned by the previous route operator, Clyde Marine).

HITRANS provided median ages of ferries in Scotland by operator/owner

• Argyll and Bute Council - 33 years

• CalMac Ferries Limited - 24 years

• Highland Council - 33 years

• Orkney Islands Council - 31 years

• NorthLink Ferries - 22 years

• Shetland Islands Council - 30 years

Source - Transport Scotland - Scottish Transport Statistics 2022

Source - Transport Scotland - Scottish Transport Statistics 2022

Source - Transport Scotland - Scottish Transport Statistics 2022