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National Bus Travel Concession Scheme for Older and Disabled Persons (Scotland) Amendment Order 2015 [Draft]
Good morning, everyone, and welcome to the sixth meeting in 2015 of the Infrastructure and Capital Investment Committee. Everyone present is reminded to switch off mobile phones, as they affect the broadcasting system. As meeting papers are provided in digital format, you may see tablets and other mobile devices being used during the meeting.
The first item is evidence on the draft National Bus Travel Concession Scheme for Older and Disabled Persons (Scotland) Amendment Order 2015. I welcome Derek Mackay, the Minister for Transport and Islands, and Tom Davy, team leader for bus and local transport policy, and Nancy Woodhead, concessionary travel policy manager, from the Scottish Government. The instrument is laid under the affirmative procedure, which means that the Parliament must approve it before the provisions can come into force. Following the evidence session, the committee will be invited to consider a motion to approve the instrument under agenda item 2.
I invite the minister to make some opening remarks.
Good morning, and thank you for inviting me to discuss the draft National Bus Travel Concession Scheme for Older and Disabled Persons (Scotland) Amendment Order 2015. The order sets the reimbursement rate and capped level of funding for the national concessionary travel scheme in 2015-16 and 2016-17. In doing so, it gives effect to an agreement that we reached in January with the Confederation of Passenger Transport, which represents the Scottish bus industry.
That agreement was based on a reimbursement model that was developed in 2013 on the basis of independent research that was commissioned by the Scottish Government. The research was discussed extensively at that time with the CPT and its advisers. The model and recent discussions on updating the various inputs to it—including forecasts based on historical trends and agreed indices—have given us a good basis for informed decisions that will provide stability and clarity for all parties.
Using the updated model, we have concluded that the appropriate rates for reimbursement in 2015-16 and 2016-17 should be 57.1 per cent and 56.9 per cent of the adult single fare, respectively. We believe that those rates will most closely deliver the aim, which is set out in the legislation that established the scheme, that bus operators should be no better and no worse off as a result of participating in the scheme.
On the basis of those rates and our expectations for future changes in journey numbers and fares, we forecast budget requirements of £202 million and £212 million over the next two years—that is £414 million in total. The figures are reflected in the draft order as budgetary caps.
The order is limited to the next two years. We have agreed with the CPT that the reimbursement model will be reviewed during 2016-17 to ensure that it continues to provide a fair deal for all parties and an appropriate mechanism for determining future payments.
We know that older and disabled people greatly value the free bus travel that the scheme provides, which enables them to access local services, visit friends and relatives and gain from the health benefits of a more active lifestyle. The order provides for those benefits to continue for two years on a basis that is fair to operators and affordable to taxpayers.
I commend the order to the committee, and I am happy to answer any questions.
Thank you for that opening statement, minister. I invite members to ask questions of the minister.
Am I the only one with a question? Is that any surprise?
The minister has laid the order, which covers the requirements of the scheme and continues to propose that the scheme should provide free travel for the elderly from the age of 60. However, many people do not believe that 60 is elderly any more and, in view of the growing cost of the scheme, I and others have suggested that it would be more appropriate to align the entitlement to the pension age rather than to the age of 60.
With the costs going up and the effect that that has on the overall budget for support of the bus industry, has the minister given any consideration at all to changing the age of entitlement?
I am delighted that Mr Johnstone has asked the question without expressing a preference, as any good politician would. I take the point that some people do not regard 60 as particularly old. I have spent most of my life wanting to be older but, now that I have hit a tipping point, I want to be younger again. At the age of 37, I am quite far off the concessionary travel arrangements—as, of course, is Mr Johnstone.
I am a lot older than that.
You said it.
Of course, the Government considers options, but we set out a commitment to continue with the scheme, which—because of the two-year arrangement—will continue through this parliamentary session. It will be for all politicians to decide the future eligibility criteria. There are some who believe that the age of entitlement should be raised to the pension age, and there is consistency in that, but, for the time being, we are sticking to 60. That is what is established in the scheme and it is what we have carried through this session of the Parliament. It will be for everyone to consider their position going into the next election.
If Mr Johnstone believes that a change to the eligibility would have a massive impact on the total cost of the scheme, it might surprise him to learn that it would not. That begs the question whether a system change would be worth any financial saving that might be made, and it brings in another element of the discussion: if we were to expand the scheme, who else would we consider? There is a strong argument to consider extending the scheme to people who are seeking work and people at the younger end of the age spectrum who might require support with travel.
Those are issues for all politicians to consider as they approach their manifestos and the next Scottish Parliament elections. The Government will continue with the scheme as it has outlined and sustained it so far.
There are, indeed, several groups to which many of us would wish the scheme to be extended, and any savings could be used for a number of purposes. One of the key groups of people who are not able to take advantage of the scheme is those who are not near bus routes. Those who rely on community transport to support their travel requirements, which are often serious, are not able to access bus services where they do not exist. Savings in the scheme could be used to extend support to community transport. Has any consideration been given to that?
Mr Johnstone puts a fair question about the extension of the scheme to community transport. Politics is about choices. If the Conservatives’ position was to move the age of eligibility from 60 to 65 or whatever the pension age is for the applicant—I am sure that Mr Johnstone does not propose removing a pass from anyone who is currently a holder, but simply that the revised age would apply to new entrants to the scheme—even in those circumstances it would be about choices. However, that is not a direct equivalent choice for the reason that I am about to give.
I have no doubt that community transport should get more support in terms of eligibility and finance. I am not one for passing the buck, but there is provision for local authorities to provide that support. If a local authority wants to expand the community transport provision or extend concessionary schemes, it is perfectly empowered and entitled to do so. From that point of view, it would be better if local authorities, which understand their local circumstances better and know where the gaps in transport provision are, addressed any gaps that they felt existed. That would help in situations in which there was not adequate private sector bus provision but there was community transport.
Therefore, it is for local authorities to lead on expanding the scheme in community transport. The power and resources exist if they choose to use them in that fashion and set that as a priority.
For a number of years, as the cost of the concessionary scheme has risen, the proportion of the total support that has been given to the bus industry through the concessionary scheme has increased and, as a consequence, things such as the bus service operators grant have become less significant in the overall scheme of things. That has potentially had the side-effect of distorting the shape of bus services in Scotland so that services have been targeted at the high level of market interest from concessionary travellers, which has sometimes had the effect of removing services that were more often used by people taking the bus to work or to college, for example. A number of cases have come to me of morning bus services, in particular, being lost because priority has been given to services that run at other times of the day. Have you come across any evidence that suggests that the pattern of subsidy is distorting the shape of bus services across Scotland?
Not particularly. You must look at the scheme in the round and at the other grant schemes that support bus travel. If you put the scheme in the context of the bus service operators grant as well, you will see that a cocktail of grant support funds the bus industry. Incidentally, 45 per cent of all income for the bus industry in Scotland comes via Government or local authority grant, with the rest coming from the fare-paying public. I am therefore not sure that the scheme distorts the market to the extent that Mr Johnstone implies.
I do not know whether I misheard Mr Johnstone, but the grant subsidy or reimbursement percentage is not going up. It is actually—
No, the overall cost is going up but the compensation percentage is dropping.
It is correct that the compensation percentage is dropping marginally, but that is because I am trying to squeeze the public pound and get best value from the private sector operators. However, I do not believe that that marginal reduction in the context of an increasing budget and spend is in any way distorting the market.
I suspect that the reasons why routes change and why some routes are not served go much wider than the concessionary travel scheme that we fund. Today, we are debating not eligibility for the scheme—although I am happy to do so at your discretion, convener—but the mechanics of the cap and the funding. I have not seen the evidence that Mr Johnstone describes, but I am more than happy to receive it from local members if they believe that the scheme is in any way disadvantaging local communities. I suspect, however, that the situation is to the contrary and that the scheme is sustaining bus routes that would otherwise have disappeared.
I have two brief questions on the wider issues. First, is the aim of the scheme to get modal shift so that, for example, we get a 60-year-old driver out of his car and on to a bus or, indeed, undertaking active travel by cycling or walking? The minister will agree that that would cut emissions and congestion on roads—I presume that there is also a wider issue about road maintenance. Secondly, has the minister been approached by veterans’ organisations that are keen for veterans per se to have concessionary travel? I appreciate that some veterans will be eligible anyway because some will be over 60 and some will have disabilities. However, has the minister had representations from veterans’ organisations? I have had such representations, and I have a great deal of sympathy with the plight of veterans in Scotland today.
Members can tell why Mr Stewart is my shadow. My aim is to get what he referred to in his first question about the importance of the concessionary scheme: transition to the low-carbon economy, modal shift, people being more active, reduced isolation and the promotion of individual independence. Those are all good reasons to continue the concessionary travel scheme, and many over-60s benefit from the scheme in those ways.
On the point about veterans, I will check the exact detail of that categorisation. However, it is my understanding that transport provision for veterans has improved over the past four years, partly because of the efforts of my predecessor, Keith Brown, as the Minister for Transport and Veterans. I will get back to Mr Stewart on the detail of what transport veterans might be entitled to. If we need to do further work on that, it will be undertaken. From memory—I do not have the detail to hand—I believe that we have enhanced the transport provision that we inherited.
10:15
Does the minister agree that, although the points that Alex Johnstone made about aligning the bus pass with the pension age and the retirement age might seem, on the face of it, to be sensible and have some appeal and that our success in longevity is to commended, that success is by no means universally spread across the country? Lifespans in some areas of deprivation are much shorter than those in other areas. I hope that the Government would carefully consider factors such as the health benefits that go with promoting active families and maintaining family links—families tend to be much more dispersed than they were in a previous era—before it implemented any changes to realign the bus pass with the pension age.
I would like to touch on another issue.
Is it relevant to the order?
It is relevant to the previous discussion. I represent a predominantly rural area and I have spoken to bus operators who have told me that many of the routes that they operate would not be viable without the revenue that they derive from the bus pass scheme. The scheme is absolutely essential for keeping some of those rural routes viable. That is another factor to consider in proposing any significant changes to the scheme that might impact adversely on rural bus services.
Those points are all very fair. I will work backwards in answering them.
Because of the bus environment in Scotland, there is a mixture of market forces, commercial interests and concessionary, subsidised and locally supported schemes. That is why some of the provision relies on schemes such as the bus service operators grant and the national concessionary scheme. As I said, I am convinced that some of those routes would have disappeared if it were not for schemes such as the one that we are discussing, and the rules were changed to further support rural communities in the most recent review of the BSOG.
On Mike MacKenzie’s first point, life expectancy is lower in our country as a whole and particularly in areas of deprivation. It is a fact that people in Scotland live shorter lives than people in some other parts of the United Kingdom, and we must bear that in mind when we make decisions on entitlement to services and concessions.
The Scottish Government also has a perspective on the pension age that is different from that of the United Kingdom Government, and that is another consideration.
We will continue with the scheme that we have proposed for the two-year period, which will see us through this parliamentary session. There is nothing wrong with members making choices, having an opinion and debating where the scheme works well, how we could change and improve it and what their priorities are. However, our priority is to continue with the national concessionary scheme as proposed, in order to give certainty to operators and residents throughout Scotland who greatly value the way in which it is constructed. In a survey that we conducted, 98 per cent of respondents stated that they were either very satisfied or fairly satisfied with the scheme overall. That may not come as a surprise. That record and response suggests that, even in the west of Scotland, where I am from, to use a colloquial phrase, we’re doing no bad.
As members have no more questions for the minister, we move to agenda item 2, which is formal consideration of motion S4M-12397.
Motion moved,
That the Infrastructure and Capital Investment Committee recommends that The National Bus Travel Concession Scheme for Older and Disabled Persons (Scotland) Amendment Order 2015 [draft] be approved.—[Derek Mackay.]
Motion agreed to.
That concludes consideration of the affirmative instrument. We will report the outcome of our consideration to the Parliament.
I thank the minister and his officials for their attendance. I will now allow a short suspension for the witnesses to change over.
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