Net Zero, Energy and Transport Committee

Meeting date: Tuesday, February 28, 2023

Official Report 797KB pdf

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Subordinate Legislation

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National Bus Travel Concession Schemes (Miscellaneous Amendments) (Scotland) Order 2023 [Draft]

Welcome back, everyone. Item 5 is consideration of a second draft statutory instrument. For this item, I welcome back Jenny Gilruth, the Minister for Transport. I also welcome Gary McIntyre, economic adviser, and Debbie Walker, operations and business manager at Transport Scotland.

The instrument is laid under the affirmative procedure, which means that the Parliament must approve it before?it comes into force. At the next agenda item, following this evidence session, the committee will be invited to consider a motion to approve the instrument. I remind everyone that officials can speak under this item but not in the debate that follows.

Minister, I believe that you would like to make a brief opening statement.

Good afternoon, and thank you for inviting me to discuss the draft order.

The order sets the reimbursement rate and the capped level of funding for the national bus concession scheme for older and disabled persons in 2023-24. It also sets the reimbursement rate for the national bus travel concession scheme for young persons in the coming financial year. In doing so, the order gives effect to an agreement that we reached back in December with the Confederation of Passenger Transport Scotland, which represents Scottish bus operators.

The objective of the order is to enable operators to continue to be reimbursed for journeys that are made under the older and disabled persons and the young persons schemes after the expiry of the current reimbursement provisions on 31 March. It specifies the reimbursement rates for both schemes and the capped level of funding for the older and disabled persons scheme for the next financial year, from 1 April 2023 to 31 March 2024.

The order is limited to the coming year and is undertaken on an annual basis to support both schemes. Because of the on-going impact of Covid-19 on bus passenger numbers and the continuing uncertainty for the coming year, it has not been possible to undertake the analysis and forecasting that usually underpins the annual revision of the reimbursement rates for the older and disabled persons scheme. In addition, only a limited amount of data is available for the young persons scheme, which became operational in January last year. Accordingly, the reimbursement models for both schemes could not be used with confidence for 2023-24.

I have agreed with CPT that the reimbursement rate for the older and disabled persons and the young persons schemes for 2023-24 will be retained for the current year. For the older and disabled persons scheme, it is set at 55.9 per cent of the adult single fare and the capped level of funding will be £216.2 million. That is set at a realistic level that takes into account patronage levels in the scheme since Covid-19. For the young persons scheme, the proposed reimbursement rates are 43.6 per cent of the adult fare for journeys made by passengers aged five to 15, and 81.2 per cent for journeys made by those aged 16 to 21. As for the past year, a budget cap is not being set for the young persons scheme in 2023-24.

I believe that the rates are consistent with the aim that was set out in the legislation establishing both schemes, that bus operators should be no better and no worse off as a result of participating in the schemes. Nonetheless, the rates will provide a welcome degree of stability for bus operators.

Free bus travel enables people to access local services and gain from the health benefits of a more active lifestyle. It also helps to strengthen our response to the climate emergency. The order provides for those benefits to continue for a further year on a basis that is fair to operators and affordable for taxpayers.

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

The under-22s bus scheme has been quite remarkable over the past year. I have seen in my own family and the wider school community how young people are now using bus services in a very different way. I am also seeing that feed back into services with far more people on bus services now than was the case before Covid.

I suppose that we do not have that story in front of us just now. We have some pretty raw figures that are impressive in terms of the number of journeys and how patronage has increased.

Will Transport Scotland do an evaluation of that part of the concessionary travel scheme, because it seems to me that there is a lot to bring out there? It would be worth evaluating that and for Parliament to be able to understand the positive economic impacts and the impact not only on services but on young people’s confidence.

Mr Ruskell makes a number of important points. If I am honest, the scheme started off with a number of challenges. You may recall that I was first appointed at the time of the onset of the omicron variant of Covid and that there were challenges in relation to the application process. I worked with the Improvement Service, which we had appointed to run the scheme on behalf of the Scottish ministers to improve and streamline the application process. That was important, because it helped to increase the number of applicants, as did the marketing campaign that we launched later in the year.

As Mr Ruskell said, there have been more than 45 million journeys, and 62 per cent of the children and young people who are eligible are benefiting—I would like that number to be higher, incidentally. I receive regular updates from Transport Scotland, which show the national picture and give me a granular breakdown at local authority level.

It is fair to say that some local authorities are doing better than others, so I have asked my officials in Transport Scotland to work with local authorities that might be struggling with the sign-up to ensure that they are using all the opportunities at their disposal. For example, young people do not have to apply online; they can apply via their local authority. There is also the schools accelerated process, which is used by certain local authorities. I will pick on Glasgow City Council, which used the schools accelerated process in a really dynamic way that allowed it to increase uptake right at the start of the scheme, which was very welcome.

In relation to the evaluation that Mr Ruskell asked about, there will be a one-year evaluation of the scheme, which I think will begin in April this year. It will look not only at the data that Mr Ruskell has outlined but at the change in young people’s travel habits. We are really changing the next generation’s approach to travelling by bus, which is transformative and hugely important. It is therefore important that we get that data, and I would be more than happy to share the data with committee members when the evaluation is complete.

It is really welcome that there will be an evaluation. It is important that the evaluation is qualitative as well as quantitative. A lot of really impressive figures are being bandied about—the 45 million journeys, and the hundreds of thousands of young people who are joining the scheme—but what lies underneath that? What I am seeing is a massive improvement in the confidence and independence of young people. I do not think that anybody really predicted that when the scheme was first discussed. I wonder whether any evaluation will also look behind the numbers at the impact on young people, and on families and communities, because it feels as though there is a story there that is not really being told.

Mr Ruskell is absolutely right. I see my officials nodding beside me, so I am sure that we will be looking at the qualitative feedback. Such feedback is vital in telling the story of the success of the scheme, because it is not just about facts and figures but how the scheme is changing young people’s lives and their approach to engaging with our transport networks. That is really key, so we will certainly take that away as an action point, although it will probably be captured in the planned evaluation.

The other issue is that the scheme has been a huge help in relation to the cost of living crisis. The scheme is not just about free bus travel; it is providing families with a level of protection and support, and it is important that we reflect that. We need to build some of that into our quantitative analysis, as Mr Ruskell has alluded to.

A series of questions is stacking up. I will take a question from Monica Lennon, followed by one from Liam Kerr.

I will come back to the numbers briefly. I appreciate that there is not yet a year of data for the young persons scheme, but the estimated cost of reimbursement is around £189.5 million. How did officials arrive at that figure, and does the Government expect to set a cap for future years?

I think that we will expect to set a cap for future years. I get regular updates from my officials in Transport Scotland that look at patronage across the transport network—on rail, bus and road. Obviously, unfortunately, road use has returned to where we were prior to the pandemic. Rail and bus patronage remain depressed—I think that the level sits at between 60 per cent and 70 per cent for both—so there is a challenge with regard to the forecasting that Transport Scotland was able to carry out and, to be blunt, that it has been able to carry out for two-and-a-bit years. Therefore, in relation to Ms Lennon’s question, yes, in future years, we absolutely will have to reintroduce a cap.

There is no cap for the young persons scheme this year, and there was not one last year, because of uncertainty and because we did not yet have the data to measure it against. I think that we now have a full year of data, but we need a bigger data set to measure it against in the future. However, it is a fair point, and we need to look at that.

12:15  

It is worth saying that Transport Scotland is looking at providing an evaluation specifically on the approach that we take to the cap and the reimbursement rate. The approach that we take has been used since 2013; it is an agreed economic model. Gary McIntyre might want to say a bit more about the calculation. It was agreed with bus operators, which is important, and the approach ensures that they are neither better off nor worse off as a result of the reimbursement rate that is set.

Perhaps Gary McIntyre or Debbie Walker would like to provide more information.

Before they do, I note that, yesterday, I read a figure in the press that suggested that the young persons scheme will cost £300 million. Perhaps you could comment on whether that is ridiculous or reasonable. I have no view.

I read the same story and I was surprised by it. My officials are of the view that the story in question has taken the actual spend to date for the young persons scheme, which is just over £93 million, and added the forecast spend for 2023-24 that was included in the business and regulatory impact assessment, which is £189.5 million—the figure that Ms Lennon alluded to, I think. The actual spend to date figure was published back in February in a freedom of information response. We think that, in the story, they have added the two together, which is incorrect.

Thank you for clarifying.

I was not asked for comment on the story, so I am glad that I have now got that on the record.

It is good that we have clarified that. Sorry, Gary, I think that I cut you off in mid-flow.

That is okay. My comment was just in response to the £189.5 million figure that was mentioned. It is an upper estimate of the forecast costs for the young persons scheme in the next financial year. There is a range of uncertainty in that, because we are unsure where demand levels will be next year. It is the upper range that, with CPT, was agreed to be sensible. It is based on where we have seen demand grow to date and where we expect it to grow next year

That was helpful. I have a final question. I was interested to hear the enthusiastic exchange between the minister and Mark Ruskell about the merits of the scheme. Minister, are you actively looking at the benefits of extending the young persons scheme to under-25s?

That was considered in a review that we carried out for under-26s. There is a piece of work that looked at that very issue on the Transport Scotland website. I think that we might have worked with the Scottish Youth Parliament on it, too, but that pre-dates my time in office.

It was considered, but I will be honest with Ms Lennon that, as a Government, we would not currently be in a financial position to fund it. The scheme is extremely costly—according to some news reports, more so than it actually is. I think that the scheme’s costs are worth it, but the financials that would be involved in extending it to people under 25 would be excessive under the current budget pressures that the Scottish Government faces.

I was interested in Mark Ruskell’s questions, in response to which you said that there will be an examination of how the scheme is operating. Can you reassure me that that will also examine the uptake and usage of the scheme in rural areas, as distinct from urban areas, and particularly in areas where bus provision is more patchy and/or where there is rural poverty, so that we can ensure that the scheme is operating fairly and equitably across the whole country?

Mr Kerr hits on an important point. I spent a lot of time over the summer recess meeting operators. If you meet representatives of the likes of Stagecoach and FirstBus, you get very different feedback to what you get from smaller operators who are, arguably, experiencing much more challenging times at the moment. I am mindful of that, particularly in rural areas, where people might not have access to, for example, the rail network. It is really important that bus services are maintained in areas where the rail network is not able to extend.

I might bring in officials on the specifics of the question. If that issue is not already being considered in the evaluation, I will request that it is, because Mr Kerr makes an important point. Operators are currently dealing with a range of factors and challenges such as driver shortages and the cost of fuel, so one of the reasons why I have convened the bus task force is to get folk round the table to come up with solutions to move us forward. The evaluation will give us an opportunity to ensure that we have the data from rural areas, which is particularly important in relation to Mr Kerr’s point about poverty.

Just very briefly, on that point, my constituency is in the West Lothian area. It has had poor take up, which might reflect the fact that it is a semi-rural area. You can get from east to west on a train, but trying to get from north to south, taking timing into account, is different. My young constituents say: “What is the point of having the bus pass when I can’t use it?”. That kind of forecasting will have to take place, so my appeal is that you do not look only at rural areas, because there are some very central semi-rural areas—I expect that Lanarkshire might be similar—that should be specifically examined.

The deputy convener makes a really good point. As I mentioned in the first response that I gave to Mark Ruskell, I get regular updates in relation to regional differences in different constituencies in Scotland. The pattern is that we do not necessarily look only at rural areas, because there are challenges in different parts of the country for different reasons. It is important that we take an intuitive approach to the implementation of the policy. I take on board the deputy convener’s point and will ensure that that is fed into the evaluation that Transport Scotland will conduct in April.

It would be wrong, then, based on what the deputy convener has said, to ask about what we have heard from a lot of people, as the minister will have. They say that ferries are their buses and that people under the age of 22 should perhaps be considered for concessionary travel on ferries, as well as buses. No doubt that will be in the order next year, but that is not the question that I want to ask. Do you think that the budget of £216 million for the older and disabled persons scheme will be met, by which I mean will there be a greater demand for that, or will it not reach that level of claim?

The budget should be sufficient, based on the modelling. It assumes that patronage levels will recover to 80 per cent of what they were prior to the pandemic, so it is dependent on passenger behaviour, bluntly, but that would certainly measure up with what officials have forecast in relation to people returning to bus.

The other thing to reflect on is that people’s travel habits have dramatically changed, so this is not only about bringing people back to public transport. Some people do not go to a workplace anymore; they work from home. That has changed the nature of public transport in Scotland. However, I think that we are still in a bit of a pre-pandemic cycle, whereby the delivery model that we currently have across public transport networks reflects provision that existed prior to the pandemic. We need to think again about some of our delivery models when people are often working from home during the week, because that changes what the patronage uptick is. In answer to your question, the budget should be sufficient but it assumes an 80 per cent return of patronage.

Perfect. Thank you. As there are no more questions, I move to the next item on the agenda, which is formal consideration of motion S6M-07689. I invite the minister to move the motion.

Motion moved,

That the Net Zero, Energy and Transport Committee recommends that the National Bus Travel Concession Schemes (Miscellaneous Amendments) (Scotland) Order 2023 [draft] be approved.—[Jenny Gilruth]

Motion agreed to.

The committee will report on the outcome of the instrument in due course. Does the committee agree to delegate authority to me, as convener, to finalise the report for publication?

Members indicated agreement.

Thank you, minister, and thank you to your officials.

12:23 Meeting continued in private until 12:32.