Rural Economy and Connectivity Committee

Meeting date: Wednesday, March 6, 2019

Official Report 693KB pdf

---

Subordinate Legislation

---

National Bus Travel Concession Scheme for Older and Disabled Persons (Scotland) Amendment Order 2019 [Draft]

Item 2 is to consider one affirmative instrument, the draft National Bus Travel Concession Scheme for Older and Disabled Persons (Scotland) Amendment Order 2019. The committee will take evidence from the Cabinet Secretary for Transport, Infrastructure and Connectivity. There have been no representations to the committee on the instrument.

I welcome back Michael Matheson, Cabinet Secretary for Transport, Infrastructure and Connectivity. He is joined by Pete Grant, bus policy team leader; and John Finlay, customer services and communications manager, from the Scottish Government. I invite the cabinet secretary to make a brief opening statement.

The draft order sets the reimbursement rate and capped level of funding for the national concessionary travel scheme in 2019-20. In doing so, it gives effect to an agreement that we reached in December 2018 with the Confederation of Passenger Transport, which represents the Scottish bus industry.

That agreement is based on an economic model for reimbursement that was developed in 2013 on the basis of independent research commissioned by the Scottish Government, following extensive discussions with the CPT and our respective advisers. With the CPT and our respective advisers, we have reviewed and updated the model and the forecasts and indices in it so that we can use the model as the basis for the proposed terms for 2019-20.

The proposed reimbursement rate for 2019-20 is set at 56.5 per cent of the adult single fare. We believe that that rate is consistent with the aim, set out in legislation establishing the scheme, that bus operators should be no better off and no worse off as a result of participating in the scheme. It is only marginally different from last year’s rate of 56.8 per cent, which we believe provides a welcome degree of stability for bus operators.

On the basis of that reimbursement rate and our expectations for future journey numbers and fares, we forecast that claims for reimbursement may come to around £213.65 million over the next year. That figure is reflected in the draft order as the budget cap.

The order is limited to the coming year. Our work to update the model during 2017 identified significant uncertainty around what should be the impact of changes in the relative level of the adult single fare. We agreed with the CPT that we would leave that key element of the model unchanged for the time being.

The economic model relies on good forecasting and therefore Transport Scotland has built relationships with the industry based on transparent forecasting procedures.

We know that older and disabled people greatly value the free bus travel that the scheme provides. It enables them to access local services, visit friends and relatives and gain health benefits from a more active lifestyle. The order provides for those benefits to continue for a further year on a basis that is fair to operators.

I commend the order to the committee and I am happy to answer any questions.

Thank you, cabinet secretary. A few members of the committee—I will not name them—may be eligible for concessionary bus travel. I will spare their blushes by saying that there is no need for them to declare an interest. The first question is from Richard Lyle.

I welcome the proposal to extend the scheme for a further year and to make no change to who is eligible or to what benefits the scheme confers. That is contrary to comments that were made by certain political parties in this place when the system was going to be reviewed.

I welcome the fact that the Government is not raising the age criterion or changing the system, because of the public consultation. In August 2018, the Scottish Government confirmed that there would be no change to the age of eligibility for the scheme, which would remain at 60—that is on the record. The Scottish Government also confirmed that it would make a welcome minor amendment to make disabled children aged under five eligible for a companion card under the scheme. I thank you for that, but I note that the proposal extends the scheme for only a year. What discussions are you entering into with the various bus companies in Scotland—I think that our papers tell us that there are more than 200 of them, which surprised me—to ensure that in future this excellent scheme remains the way that it is?

The member is correct to say that we have not changed the eligibility and that we have extended the scheme to include disabled children under the age of five. That is taken account of in this order.

We go through an annual process with the industry. The economic model that we have is one that was agreed with it, which means that there is a consistency of approach. We will go through the process with the industry in the coming year, too.

The process that we went through to come to the particular figure that we are talking about today and that led up to the agreement in December was collaborative and the industry welcomed the way in which we went about it. We will conduct the process in that way in the year ahead, too.

People wonder how we spend their taxes. How much will the scheme cost the Scottish Government?

The cap for the investment in the scheme in the existing financial year was £202.1 million; for the coming year, the figure will go up to £213.65 million.

So, £213 million. Thank you, cabinet secretary. Well done.

I am sure that the cabinet secretary appreciates that comment, Richard.

In the past year, was the cap reached? If so, at what point in the calendar year?

Pete Grant can give you details on that.

The cap was not reached in the past year.

How far short of it were we?

Can I be clear which year you are talking about?

I have temporarily forgotten what you said that the figure is for the current financial year, but it was around £200 million. I am asking what the actual expenditure was under the scheme.

For the year that we are in, that has obviously not been resolved yet. That is why I was asking for clarification. If you are talking about 2017-18, the cap was £196.16 million and the actual scheme payments were £194.8 million. If it helps the committee, we can send details of the caps and the payments for the past several years.

I accept that the Government and the bus companies have come to a shared view of what the cap should be, so that tells us quite a lot. Is there an expectation that the current year’s cap will be reached?

Yes, it is fair to say so. We have communicated openly with the Confederation for Passenger Transport and individual bus operators and have taken actions accordingly.

Does that reflect an increased number of journeys that are being made using the scheme, or are there other factors?

It is fair to say that there is a range of factors that influence things. It is worth noting that, in the past year, we have had quite a clement summer and winter, which influenced journey numbers and, therefore, expenditure on the scheme. Again, we have had open dialogue with the industry, looking back on what was forecast and what came to pass. We are as open as possible in that regard.

My questions are about what is being reported in the media today, which perhaps the cabinet secretary can clarify as being accurate or inaccurate. If the information is accurate, it is of concern to me.

We are hearing reports that operators are being told, with regard to what will be available to them in the last four weeks of this financial year, that the reimbursement rate has been cut substantially because the budget is close to being used up, as Mr Grant confirmed. Can you give me some numbers? How close are we to the budget being used up and what is the reduction in the grant being offered to bus operators? The reason why I mention it is that we are getting feedback from some of the large operators, including McGill’s Bus Service Ltd in my region, that they simply do not have the revenue to deliver services, due to the potential reductions in the subsidy, and that they are looking to make savings that could include fare reviews and cutting services. Is that true?

Are you asking me what McGill’s is looking to do? You would need to ask McGill’s.

If it is true, is it not of great concern to you?

It would always be a concern if a company is looking to reduce services, but you would have to ask McGill’s if that is what it is intending to do.

Has the company approached you with any concerns about this? Has no operator expressed concerns about reaching the budget cap early?

I am not aware of having received any correspondence from McGill’s. If the company has written to me about the matter it may be in the system, but I have not received a letter as yet.

Why does the policy document that accompanies the order say that

“The cap is not welcomed by the bus industry”?

From the outset, the industry has never accepted the idea of a cap on the concessionary fare scheme budget, which I think has been in place since the scheme was established. Is that right?

Yes, I believe so.

The industry has never accepted the idea of a cap, which is in place to protect the taxpayer.

I understand that it protects the taxpayer, however if the cap is being reached and we are running out of budget before the end of the financial year, surely next year’s budget needs to reflect that? Obviously, it means that bus operators throughout the country will receive no subsidy, or a reduced subsidy, to provide services during the last part of the financial year. Surely that would have an effect on what you foresee as being required next year.

The figures for the year ahead are forecasts, so in the economic model that was agreed with the industry to try to get as accurate a picture as possible, there will be variances from one year to the next. If we look over the course of the past 10 years, I think that there have been a couple of occasions when the cap was reached, from what I can see, and there are other years when the cap was not reached. It is a forecasting exercise as we go into the next year. We have amended the model in the past couple of years to take into account some of the changes that are taking place and we will continue to work with the industry on how we can improve the model, but it is a forecasting exercise. However, the mechanism for establishing the cap was agreed with the industry, although I recognise that, from the outset, the industry has not accepted the idea of a cap.

Cabinet secretary, you said that the order covers the extension of the scheme to carers with disabled children. I am a bit confused by that because, from what I have read so far, I cannot see where the order actually says that. Does the order cover carers with disabled children and, if so, how much of the £213.65 million will cover that?

I was incorrect; the order does not include that, as it has not been rolled into the scheme yet.

What is the target date to extend eligibility to carers with disabled children?

We are looking to undertake that work during the coming year of the scheme. I hope that we will be in a position to introduce it into the scheme in the following year.

Not until the following year.

The Government has indicated that it supports in principle the roll-out of the scheme to modern apprentices—when will that happen?

We have to do a bit of work to understand the details and the figures around that. I hope that that work will also be undertaken over the course of this year’s programme.

Is the view, therefore, that the scheme will also be extended to modern apprentices in the next financial year?

If we choose to extend it, yes.

In the past, constituents have told us that, although they were going from A to B, their ticket said that they were being charged for going from A to C, D or E. How much has that practice of bus operators been curtailed?

John Finlay is better placed to tell you about the range of work that is undertaken as part of Transport Scotland’s fraud strategy to deal with the issues and engage directly with operators. I have also heard such comments from constituents.

11:45  

The fraud strategy is being refreshed with measures that we can take with bus operators. We have a fraud analysis team that looks into constituents’ complaints. Some journeys are overstaged, but a lot of cases involve confusion among cardholders. Some customers do not understand bus operators’ fare stages; if a customer says, “I’m going to Asda,” they might expect the ticket to say “Asda”, but the ticket might go to the next fare stage, because fare bands apply.

We always look into and respond to any inquiries that we get from cardholders. We have mystery shoppers who go out on buses and undertake exercises on routes that constituents have highlighted. Because we had received a few inquiries about First Glasgow, my colleagues met the company last week. A lot of the inquiries arose because First Glasgow has recently changed its fare structure; a lot of services now have just two fares, so cardholders thought that they were being overstaged, but analysis showed that that was not the case and that the issue was the way in which First Glasgow records journeys. We have engaged with First Glasgow’s communications team, which will refresh the driver training and, I hope, provide more information to cardholders, whether that is through posters on buses or on social media.

We always investigate any inquiries that we receive. We have a freephone number that cardholders can phone if they have any queries or if they want to report instances in which they think that they have been overstaged.

Is the problem reducing, increasing or staying the same? Do you still encourage our constituents to get in touch with us if they have reason to believe that an issue exists or if they would like to query their fare?

Absolutely. Anyone who has concerns can raise them with us under the process that exists, and their concerns will be investigated. When there is a pattern of concerns, we often use our different mechanisms to assess how the operator is behaving on a particular route or as a whole. If it is necessary and appropriate because we believe that criminal activity—fraud—has taken place, the operator will be reported to the procurator fiscal. That has happened in the past, and prosecutions have been successful.

Members have no more questions, but I have been asked to raise a question by a lady who has a long-term disability and is entitled to a concessionary travel pass. She is concerned that, every two to three years, she must go to a library to prove her disability. She has received correspondence in the past that states that her disability entitlement needs to be reviewed, because her circumstances could improve, but she has a long-term disability that will not improve. She would like long-term conditions to be recognised so that she does not have to keep proving her disability. Will you look at that and resolve the situation?

If you pass on the details, I will be more than happy to look into the matter.

I will ask the clerks to pass on the information—thank you. Do you wish to make closing remarks?

No.

Item 3 is formal consideration of motion S5M-15754, in the name of the Cabinet Secretary for Transport, Infrastructure and Connectivity.

Motion moved,

That the Rural Economy and Connectivity Committee recommends that the National Bus Travel Concession Scheme for Older and Disabled Persons (Scotland) Amendment Order 2019 [draft] be approved.—[Michael Matheson]

Does the cabinet secretary wish to make further comments?

No.

Do members wish to comment?

The order implements option 2 from the consultation. It is good news but, as usual, certain parties in this place wish to debase what is being done. The system costs senior citizens nothing, but we must remember that they were taxpayers, so they are entitled to the service. I remind people that the scheme costs the Government more than £200 million. I support the motion.

As no one else has any comments, the question is, that motion S5M-15754 be agreed to.

Motion agreed to,

That the Rural Economy and Connectivity Committee recommends that the National Bus Travel Concession Scheme for Older and Disabled Persons (Scotland) Amendment Order 2019 [draft] be approved.

That concludes our consideration of item 3.

11:51 Meeting continued in private until 12:10.