Official Report 617KB pdf
Welcome back to this meeting of the Net Zero, Energy and Transport Committee. We have already had quite a long evidence session on the climate change plan. I am sure that the cabinet secretary is looking forward to this evidence session on the budget.
I will start off with the easy question.
Of course, you would like to make some opening remarks. No doubt they will be short, like my question was going to be, cabinet secretary. I am sorry for cutting you off.
I will be very brief, convener.
Thank you for the invitation to give evidence on the 2026-27 transport portfolio budget. In 2026-27, we will make a record investment of £2.7 billion in public transport to fund bus and rail services, concessionary travel for more than 2.4 million people and lifeline ferry and air services. Our investment will support new ferries, port upgrades and the replacement of ScotRail’s intercity fleet.
We will continue to make public transport more affordable and accessible, building on the success of free bus travel for under-22s. We are piloting a bus fare cap across the majority of the Highlands and Islands, and we have removed ScotRail peak fares for good, saving passengers 17 per cent on average.
We intend to remove peak fares for islanders using northern isles ferry services, making travel more affordable. Those measures support household budgets, encourage greater use of public transport and contribute to our wider goals of protecting our climate.
In 2026-27, we will invest £1.2 billion in maintaining and improving the trunk road network. We will progress major projects, invest in the maintenance of the trunk road network and enhance road safety to reduce injuries and fatalities. Our infrastructure delivery pipeline reaffirms our commitment to completing the A9 dualling programme by 2035, using capital-funded contracts to secure better value for money.
We will also remain in support of full dualling of the A96, and our investment in the trunk road network over the next four years will allow us to make further progress on dualling the A96 between Inverness and Nairn, including the Nairn bypass, along with the adjacent A9/A96 Inshes to Smithton link road.
Tackling climate change, which we have just discussed, remains central to our work. As I set out in my earlier statement, across the spending review period, we are investing in decarbonising travel, with £1.4 billion for low-carbon and sustainable travel. We are making a further £4.4 billion capital investment in rail, fleet and infrastructure over four years. That will support electrification of key routes in the Borders and Fife and facilitate ScotRail replacing intercity and suburban fleets.
Our spending plans will help to deliver a sustainable, inclusive and accessible transport system that supports Scotland’s economies and communities while reducing emissions and adapting to climate impacts. They align resources to priorities and protect front-line services that are critical to the running of the transport network.
I welcome the opportunity to discuss our plans and to take members’ questions.
Thank you, cabinet secretary. I apologise for not bringing you in straight away, but my lack of manners knows no bounds.
I should also have welcomed, from Transport Scotland, Alison Irvine, chief executive; Catherine Jess-Gibson, director of finance and corporate services; and of course, Lawrence Shackman, director of infrastructure. Forgive me for not welcoming you to the committee.
Now I will get to my question. The Scottish Government is investing nearly half a billion pounds in concessionary fares in 2026-27, which is £55 million more than in the current year. What evidence do you have that that is the most cost-effective way of delivering transport goals and getting more people to use public transport, thereby reducing carbon output?
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There are a number of different reasons for having the concessionary scheme. It started back in legislation in 2001 that, from what I remember, Sarah Boyack took through Parliament. Obviously, we have expanded it since then, and now 2.4 million people are using it.
Part of it was about supporting particular groups that were facing challenges with the costs of travel, but anybody who knows anyone who uses the concessionary travel scheme, particularly anyone who is older, will know that it gives them the ability to get out and about, to use public services, to get the stimulation that they need and all the rest of it. It is important in tackling those kinds of issues, too.
The key part of your question, though, is whether, strategically, it is helping with modal shift, and we are looking at that in our modelling of where people are using buses. Clearly, bus use is determined by a number of things, including the availability of buses. We are in a deregulated market, which means that the Scottish Government does not control where the buses are and so on. However, we can provide support, and we have done so through the network support grant. The grant was initially put in place to help buses during Covid, but it was subsequently seen as important in keeping bus routes open where they can be kept open and in supporting the industry.
Our monitoring shows that, post-Covid, there were different experiences when it came to people returning to buses. For example, we had a real challenge with older people; I might bring in colleagues to talk about how we monitor these things, but the transport use surveys and our monitoring of concessionary travel showed that older people were particularly slower to come back. That might have been for lots of understandable reasons. Perhaps people felt that, after the Covid experience, they did not want to be in enclosed spaces with other people—there is probably a sociological aspect to it.
The good news, though, is that those older people are now coming back. It is a demand-led budget—in other words, what it costs is led by demand. The more who use buses, or the more who come back to them—I am thinking particularly of older people, and the increasing use of buses by younger people—the more it will affect the funding that is available.
However, understanding whether that, in and of itself, helps with modal shift is quite complex. I do not think that there is a single answer to that, but Alison Irvine might want to give you some perspective on the bus system.
I just want to add a couple of comments to what the cabinet secretary has said about monitoring and evaluation, and determining whether concessionary travel schemes provide value for money.
We do carry out that work. For example, if you look at our website, you will see that we publish the monthly usage figures for each of the schemes, and that is part of our monitoring process. We also do a periodic evaluation of the older and disabled persons scheme and the younger persons scheme. I cannot quite remember when the next evaluations are due to take place, but they are undertaken. We are talking about quite a significant investment and it is, therefore, beholden on us to be able to demonstrate that it continues to deliver value for money for taxpayers.
We want to be, and are, in continual dialogue with the bus operators to ensure that the rate of payment that is made is fair and appropriate—that is, they are no better and no worse off as a result. I think that you have heard from Mr Fairlie on the returns in that respect. It is quite a complex web of evaluation and monitoring that goes on across the whole concessionary travel scheme.
I should probably declare that I am in that older group when it comes to concessionary travel.
I seem to remember that, in 2016, when I started off in this Parliament, there was an order relating to concessionary travel, and off the top of my head, I think that the figure at the time was around about £193 million, give or take £1 million. The figure has now gone up to nearly £500 million, but the number of bus journeys taken under the concessionary travel scheme has gone down, so the scheme is not achieving what it set out to achieve: securing a modal shift and getting more people on buses. A lot more money is being spent, but fewer bus journeys are being taken. To me, that is what the figures show.
I think that you are wrong in relation to the statistics. We are talking about 2.4 million people—we should think about Scotland’s population—travelling under the concessionary fare scheme. That is a significant figure.
On your point about whether the money could do more than one thing and drive change, the problem is that people’s rights under the concessionary travel scheme are set out in statute. The committee has seen amendments to expand the scheme to under-22s. There must then be a negotiation on the amount that is required per journey to ensure that we get value for money for the price of allowing 2.4 million people, which is a considerable number, to access buses under the scheme.
Does that allow us to use the £0.5 billion of public spend on other aspects of transport policy? It does not, because we are hemmed in by the original legislation, despite its good intent and the success that it has led to. It would be open to a new Government or a new Parliament to determine whether it wanted to use that £0.5 billion more strategically.
However, I strongly believe that the concessionary fare scheme is extremely popular. People like it and increasingly use it—2.4 million people is a significant number. On your point about whether the money could be used in a more strategic way, the challenge relates to the underpinning legislation.
You must have thought about the answer to that question. What would be a “more strategic way”?
The fair fares review—in which, I know, the committee took an interest—looked at that. Is there a way of using that funding to be a bit more strategic in our partnership and delivery with bus authorities, or do we use the Transport (Scotland) Act 2019, which the committee has been monitoring closely, to try to get change? Different tools, including franchising, bus partnerships and ownership, can be used.
However—I think that Mr Matheson raised this point previously in the committee—if I had an answer to that question immediately, I would have done that work as part of my responsibilities. We have had to deal with a number of transport issues in lots of areas. For example, rolling out the concessionary travel scheme to under-22s has been a major piece of work.
Are we getting the most value from that investment in young people? Could we not use the concessionary travel scheme to encourage a modal shift? Should the Government not be leading on issues such as workplace travel planning and car use reduction for whole families? The Government could use the availability of the concessionary travel scheme for families to drive that shift. It feels as though the scheme sits in isolation. What the scheme is achieving is great, but I could see it being much more powerful if it were linked to other agendas in the climate change plan, for example.
That involves working with the private sector and encouraging businesses in relation to their requirement to produce work travel plans. We need to work with businesses to get more people to use public transport when coming into work. That applies to both rail and bus services.
Do we encourage family use of public transport? We do, particularly in relation to rail—we have offers for younger people and families, such as the kids for a quid ticket.
We worked with chambers of commerce and businesses on the removal of peak rail fares. They wanted more people to come in and be present in the workplace, so they promoted the policy, and I encouraged Transport Scotland and ScotRail to be involved in that work.
The South East of Scotland Transport Partnership is doing interesting work on the routes that are required. Sarah Boyack has referred to the need for such work, which involves considering where people need to move to and how they need to move there. We are working with major employers in that regard. Health is a big player, because a lot of people using transport are travelling to hospitals, either for work, given that hospitals are major employment anchors, or as patients. It is important that we try to align all those elements, and the on-going work through our transport to health strategy is an important part of that. It is about looking strategically about who needs to go where and how. That is also covered in the reissued islands plan, and we have been talking to Western Isles Council about it. Looking at how transport can be used strategically is important.
I am not sure about where the concessionary travel scheme sits within that, unless we were to expand it. Some people might want to do that, but that would then add to the bill that we have just been talking about, and we would have to think about whether we were using resources strategically.
There is a collection of pilot projects and approaches that are happening in some areas, but I am not getting a sense of the overall approach. We are talking about a big amount of money to be invested. I see the benefit that concessionary travel is delivering for young people, but I do not see it building into the need for modal shift and the choices that families are making. I feel that the Government could do more to market it and link it to colleges and universities, and other workplaces, where there is a need to tackle car usage and get modal shift. I am not seeing it as a centrepiece of the Government’s programme to drive that modal shift.
The Government has set an ambitious target for a 20 per cent reduction in vehicle mileage; it has walked back from that, but at the same time we have £450 million going into concessionary travel. I am not seeing the strategic foundation for that.
There are 2.4 million people using the scheme. I think that what you are trying to get at is how we encourage the working-age population to travel more by bus. There is an incentive to travel with their children during weekends and evenings; we know that bus use is going up at weekends and in the evening, and the leisure market is really improving.
Can employers do—and are they doing—things to ensure that there is greater bus patronage? I know that the University of St Andrews is working with a very good bus plan. These things are happening—the issue is whether we make it a top-down Government requirement and visit every single employer to ask why they are not encouraging their working-age population to use the concessionary travel scheme more with their elderly relatives or their children. That becomes more problematic.
Alison Irvine might want to come in to help with that; Mr Ruskell and I may be speaking at cross-purposes.
I will pick up on a couple of specific points in relation to the amount of money that we invest in the bus sector. As you know, the concessionary travel scheme provides a benefit to the user, but it is only good enough if there is a service there for them to use. The concessionary scheme is part of the mix of different aspects for which funding is provided to support the bus sector. Could we use the totality of that funding in a more effective way? I would be happy to have a more detailed discussion on the range of options that exist, as the cabinet secretary set out.
The things that encourage people to use bus are service availability and reliability, which relates to the types of things that are associated with bus priority. In my view, we should be—and we are—bringing that back into the overall collective and thinking about how best that investment can be done. The monitoring and evaluation work that is currently under way will help to give us the key signals and steers as to what we should be doing.
I go to the deputy convener for a question—very briefly, please.
I want to pick up on a point that Alison Irvine just made. We are spending the best part of £1 billion a year on concessionary travel, but an increasing number of our communities do not have access to public transport because of the reduction in bus services. That creates an issue with transport inequality, which, for some communities, is very real and becoming increasingly problematic. Is there a balance between the investment that we put into concessionary travel and the increasing challenge of transport inequality for communities? Have we got the balance right, and does the budget reflect that?
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It is probably for politicians and this committee to make an assessment about that. The figure is £525 million, not the best part of £1 billion, but that is still a substantial amount of public funding. Could the funding work harder? Yes, but that would require primary legislative changes and an act of this Parliament, and we would need to use the different levers that we have been talking about.
The problem can be seen from monitoring data. My area of West Lothian has one of the lowest uptakes of concessionary travel among under-22s because the bus services go on a lot of east-west routes, many of which are historical routes, but they do not go on many north-south routes.
As Alison Irvine set out, the availability of buses is critical. That is why local authorities can and are pursuing plans to take over bus routes, as we have seen in recent weeks with Highland Council taking over routes that were previously run privately.
In a deregulated market, private companies will operate if they can get a return. Therefore, the support and shift in funding in the budget for local transport authorities and regional transport partnerships to pursue franchising is important. For example, Strathclyde Partnership for Transport is pursuing franchising just now with a view to being more strategic across the regional transport partnership area.
Different places are pursuing different aspects of franchising. Could the funding for concessionary travel be working harder? My view is that it could, but how that can happen will be for the next Parliament to determine.
On the point about creating better bus services, the concessionary fare scheme is scrutinised to the nth degree, and a fare cap is now being piloted in the Highlands and Islands. However, issues about reliability come up all the time. Would it be worth while having a pilot whereby we pick an area and consider bus priority measures and other things that can be done on reliability, so that we can see whether doing those would create the modal shift that we all want to happen?
Kevin Stewart makes an important point. Through the budget we are investing £60 million in the bus infrastructure fund, because improving service reliability will make a huge difference to bus usage. I recall that, previously, one challenge was that bus service reliability in the Lothians was disrupted by the extensive road works that were required for the tramlines. By the time that buses got out to West Lothian, for example, they could not stick to their timetables because they had already been held up in the city centre.
Having smooth and uninterrupted routes, as well as the real-time technology and data that many bus services already use effectively, will mean that people will know when their bus is going to turn up and they will not be left standing in all weathers. The bus infrastructure fund can also be used—and is being used—to make it more comfortable for people in certain areas, including rural areas, if they do need to wait for a bus. It is worth considering monitoring the areas where there have been improvements to bus infrastructure, but whether that is tied to the fare issue is open to question.
When we consider what has been achieved in the budget, the requirements for transport to deliver with regard to the budget and the negotiations that took place—last year, a bus fare pilot request was put out to see which RTPs would want to take part—I think that something around reliability will be tied to the bus infrastructure fund.
The point that I am trying to get at is that a comprehensive pilot in one area might make the difference. So far, in certain places, there have been piecemeal measures that are unpopular with the public, such as the bus gates in Aberdeen, rather than there being priority measures right across the city. Would it be worth while having a pilot in one specific area to prove to the public that bus priority measures can work for everyone?
It will be interesting to see what Highlands Council will do in the towns in its area and how it will use the combination of the various tools that are available to it.
It is not for us to do the regional transport partnerships’ job for them; they can do that well themselves.
Dundee has some interesting propositions on bus infrastructure fund deployment, which it has been waiting to roll out. That reliability will help the market more generally. Do we need to tie it into a bus fare cap pilot? I think that it will prove itself regardless of such a pilot. The two measures are not mutually exclusive; in the future they could be done either together or separately. The bus infrastructure fund will make a significant difference to reliability and people’s ability to use buses.
Thereafter, we will determine whether we need something else on top of that, if we can do it, to reduce fares. That would all come down to public funding—and it would require extensive public funding. Some of the fare pilots could cost as much as £50 million, £100 million or more, depending on what is required. Bearing in mind what we have just discussed, if regional transport partnerships are trying to be strategic and have other tools to use, they need to identify which are the most applicable for them, as well as whether there is anything relevant in their budget or the Scottish Government’s budget. That will require additional funding at some point in the future, but it is not in this budget.
Thank you.
The budget documents say that the flat fare pilot will cost £7 million, but the press release announcing it said that it would cost £10 million. Which is the correct figure, and why is there a discrepancy between the two?
It is a case of both/and rather than either/or. One figure is for this financial year and the other is for the next. There is £3 million for a four-month period in the current financial year and £7 million for a period in the next financial year. That gives a 12-month pilot period that would cost £10 million.
That is helpful—it is £3 million and then £7 million. Can you explain how the scheme will operate, and in particular how the operator reimbursement will be calculated?
The operator reimbursement, including for the concessionary fare, is one of the most challenging aspects in all this. I am not the lead on bus transport, as you are probably aware. Alison Irvine might want to help by explaining the reimbursement rates. Those are quite complex, because we have to identify how we might work with different operators. There are challenges with the cross-boundary aspects, as there are various fares and systems across different council areas. That is why it has taken some time to work through.
I add that reimbursement of operators will be key for us to demonstrate that the money has been allocated appropriately. We are working with all the operators, particularly in the Highland area, to check the types of ticketing machines that they have, to ensure that the systems can be set up in such a way that data can be provided to us. One reason why we were able to start in Shetland is the relative simplicity of bus travel movements in that area.
Does that mean having a smart payment system on individual buses?
Effectively, when someone gets on the bus, they tell the driver where they want to go and they press a button. They are charged the £2, but the button records the actual fare and that information then has to come back to us.
What assessment have you made of the resilience of services and the need for services that people can use? It has been mentioned a couple of times that people need a bus to use their free bus pass on, and that is also an issue with the £2 cap.
The pilot is giving us the opportunity to see where intervention works and what impact it has on the resilience of services. In the Highland area, there is a broad cross-section of travel journeys. Around the main urban areas, we see what we would typically expect for such areas—short bus journeys. We will be able to see whether intervention has a bigger impact there and what impact it has on longer-distance trips. Those are the things that we want to learn as part of the pilot work that we are undertaking.
What work are you doing to promote the pilot to people rather than just the bus companies, so that people are aware that the pilot is happening, and to encourage them to get on the bus? That links back to the discussion that we had in our previous session about encouraging people not to use cars.
We are doing that work in a phased way, starting in Shetland, where there has been a lot of publicity. We want to roll that out to different areas once the service is available in them. That will be done in conjunction with regional transport partnerships—for example, with the Highlands and Islands Transport Partnership for the Highland area. Bus companies will also want to promote the service themselves.
On your point about resilience, we would ideally like the pilot to prove—although we do not know if it will do that until we have monitored it—whether the flat fare encourages more people who have not previously been using buses to do so, whether it increases bus patronage, and whether it provides more resilience in what might be more marginal operating areas, particularly in rural areas.
One finding of the cross-party group on sustainable transport was that resilience and accessibility will be absolutely critical if people are to rely more on using buses.
I will move to questions from Douglas Lumsden. Mark Ruskell said to me that the clock does not ever stop, and I agree, but I am running out of time. Any help with short questions and short answers will make my life easier, and it will mean that everyone can get an opportunity to ask questions.
I will try my best to do that, convener.
I turn to rail services. Cabinet secretary, will you clarify how much the subsidy is for ScotRail and the Caledonian sleeper service in the upcoming budget?
That is in the budget lines, and it will have been done as a total. I will ask my officials whether they have that information. I think that it will be under level 4, under rail services.
I should probably put my glasses on to look at the budget lines. Please bear with me.
The committee will have seen that rail services are listed under level 3 in the transport section of the 2026-27 budget document, at £1,008.6 million. That is the figure that has been provided.
I will go back a decade, to the 2016-17 budget. If I am looking at that correctly, I see a figure for franchise services of about £266 million. Am I right that in thinking that our subsidy to run what is effectively ScotRail and the Caledonian sleeper service has almost quadrupled in the past decade, or have I got those figures wrong?
There is a whole load of different things in there. I do not have the figures from 10 years ago to hand, but anybody would know what the increase in costs relates to. I will give you one reference. Between January 2022 and January 2025, the consumer prices index rose by 17.8 per cent. That figure is from the Office for National Statistics. To give you a comparator—one that is from not 10 years ago but only four years ago, as I think that everybody understands what has happened with inflation and cost increases in the period since then—the 2022-23 subsidy was £694.8 million, which, when adjusted, became £818 million.
We will have an increased spend, because we are improving services and doing work on peak fares, which we manage by looking at patronage levels. We have to have efficiencies within that. However, we should not underestimate the impact of inflation—a basic look at that will show that costs will increase.
I do not know or recognise the figure that you have provided for the costs, because I have not looked at those in particular. However, if you are trying to make an argument that somehow the franchising that we had previously was superior because it was cheaper, you might also want to reflect on what people’s experience was, what reliability and functionality were involved, and the circumstances in which the franchise came to an end—let alone the deficits and losses that various franchise companies experienced, which public funding does not account for. Quite apart from inflation, a whole variety of different costs is involved in rail services funding.
I am sorry, convener. That was not a short answer.
No, it was not.
I get that inflation puts costs up for everyone but, if I am looking at the figures correctly, there has been a 400 per cent increase. You mentioned improvements to services, so what have the key improvements to our railway services been over the past decade?
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The figure for patronage in the financial year 2024–25 was 84.7 million passengers, which was up from 63.7 million passengers in 2022–23. That is a healthy 33 per cent increase over two years.
We have electrified various lines. We have opened the Levenmouth line, which people are now travelling on. Earlier in this session, we heard about the Borders railway, which some people did not want us to deliver, but it was delivered. That provided additional patronage and more rail services. In my constituency, the Bathgate to Airdrie line was opened, which has provided more services for passengers.
Bearing in mind that rail has to be subsidised—the costs represent a considerable public sector investment—the developments on those lines demonstrate that this Government has improved the availability of rail services.
If passenger numbers are going up, why are subsidies not being reduced? If more and more people were to use the railway, which would be a good thing, would that mean that our subsidies would go up? Surely having more paying passengers would reduce the subsidies required for ScotRail and the Caledonian sleeper service.
We held down rail fare increases over a period of time. We have now removed peak rail fares, which also requires the application of subsidies.
We want more staff on our trains, because their presence is important for public safety. We also need more drivers, which will cost more money. The more drivers that we have, the more reliable our services can be. We are not currently seeing cancellations due to driver shortages, and we are now seeing record levels of driver recruitment, which improves services. Unlike in England, we do not have driver-only trains, and we want our rail staff to be visible. That means that we have services—
We need to have shorter answers, cabinet secretary, although I understand that you want to get things in. I am happy to stay here until 2 o’clock if you want to, but other committee members might not.
I was answering a very broad question that covered a period of more than 10 years.
There was a promise of £200 million of rail investment for the north-east of Scotland, to reduce journey times by 20 minutes between Aberdeen and the central belt, which was meant to have taken place by 2026. We are now at the end of that period. Is that project dead in the water, or can people in Aberdeen expect to see journey times reduced by 20 minutes in the near future?
For brevity, I point out that Douglas Lumsden has asked that question several times when I have attended the committee before, so I refer him to my previous answers in the Official Report.
You could give a slightly more fulsome answer than that, cabinet secretary, in fairness. My view as convener is that that answer was slightly disrespectful. Whether you choose to follow my view is a completely different matter, but could you answer that briefly?
The question has been asked before. We are investing in and improving rail services, particularly in Montrose and Arbroath and at the stations in Dundee and Aberdeen. Improvement work on rail is taking place, and we are investing in rail in the north-east.
Regarding what we have said about that, I explained the changes to our approach about 18 months ago. I am happy to write to the member again to reiterate what we are doing, but I stress that we continue to invest in rail in the north-east. The industry has told us that the best way to tackle the issue is to have planned, systematic investment that allows the best use of resources and the least disruption possible. I have been contacted by other MSPs in the area who are concerned about the disruption that takes place when improvements are made, whether on the rail track, to signalling or in various specific areas, but such work has improved journey times.
Some of those aspects of the rail improvements in Aberdeen and the region were agreed to in the regional deal. Improvements are taking place and investment is being made in specific locations. I will be happy to write to the member after the meeting, to give him more detail about where investment has been made. The overall question of what was going to be done and when was addressed some time ago in the committee. I am happy to refer to the Official Report of that meeting and to provide additional information to the member and the committee if that is required.
You have given a commitment to complete the dualling of the A9 by 2035, which you mentioned in your opening statement. What are the principal risks to achieving the target date?
In the statement that I gave to the Parliament a few weeks ago, I set out the ordering that we will commence with. The initial ordering has been consistent in the first five sections. We wanted to provide certainty, which is why the budget and the spending review have identified the funding certainty that is required in order to deliver the work and the Government has made commitments on that. I will be opening the compound site for the next stage of road that will have active work, which is the Tay crossing to Ballinluig.
External risk factors exist in any construction contract, but the new model of engineering contract that we are using puts more of the risk on to the Government if there are unforeseen circumstances. I will bring in Lawrence Shackman to talk about some of the risks.
There are a number of risks, such as the weather: if it is bad over the next 10 years, that might have an impact. The cabinet secretary has mentioned external factors, such as inflation, which could affect tendering prices. Contractor appetite for the work could change. We are in the initial stages of putting forward a framework agreement to safeguard contractors for the remaining contracts through to 2035. We need to speak to them to ensure that we have the right set of conditions in the new engineering contract to ensure that there is interest in the tendering opportunities that will exist over the next two years. There is also a risk in that the statutory process is not complete for the remaining section of the road around Dunkeld. We need to take that forward and bottom it out in due course.
That is quite a stack of risks, and not all of those are in your control. You mentioned a framework agreement. You might have heard my earlier exchange about capital investment programmes as an economic multiplier and that we should try to maximise local supply chain opportunities. What are you doing through your framework agreements and any tendering exercises to ensure that we maximise the local supply chain opportunities from A9 construction for Scotland-based businesses?
All our existing contracts, let alone those for the framework agreement, have a raft of community benefit clauses that encourage or entice contractors to invest in local communities and ensure that they take on board local labour and unemployed people in the local vicinity throughout the construction process and site set-up. Contractors also have to advertise their subcontracting opportunities on the Public Contracts Scotland website to ensure that local opportunities are advertised in order to get as much buy-in as possible from local companies and suppliers.
There will be a great emphasis on the workforce being located up and down the A9, so there will be a lot of generated income for Scotland in that respect. The key thing is to make sure that as much emphasis as possible is placed on the community benefits with the contractor. However, contractors are very up to speed on that. It has been part of the equation with all our contracts over a number of years to encourage people to invest in the local communities in a number of ways.
Maybe you could provide us with a bit more detail on that. How much of the £3 billion that you are likely to invest in the A9 do you expect to stay in the Scottish economy?
That is very difficult to say. I could not answer that question off the top of my head.
What would your expectation be?
I cannot answer that question. I would have to look back to other projects in the past to see what the split between local and foreign investment might have been.
Do you have a target?
I do not have a target at the moment.
Should you have a target? If not, why not?
It is a reasonable question.
We have to operate within the procurement and subsidy control legislation. I am sure that you will have heard a lot about that in other contexts. The work that Lawrence Shackman described is as much as we think that we are legally able to push that type of thing. Under the current legislation, I do not think that it would be appropriate for us to have such a target for the amount of investment. However, the procurement route that we are moving to is more likely to be attractive to the UK-based construction sector, given the type and size of contracts. I think that that will help in relation to the question that you put to us.
I think that you have just increased the social aspects of the Scottish zero-emission bus challenge fund by doubling it. You have a clear social benefit target for the present ScotZEB round. Is that correct?
That is within the scoring of that particular round and it is grant funding as opposed to procurement. However, we are all operating under similar guises. When Lawrence Shackman and the team set up the procurement variables that they are looking for in order to ensure that we get best value, they look at the totality of the scoring matrix in the round and ensure that it is aligned as much as possible with Government objectives.
Okay. It would be interesting to know what further work you are doing in that space. We are investing in what is the biggest infrastructure project in Scotland at the present time. If we did not maximise the local economic benefit from that, it would be shameful, frankly, given that such capital investment represents a huge economic multiplier. It would be good to get some figures on how we are maximising local content in the projects.
Convener, we have already written to the committee about that in relation to the impact of the A9 Tomatin to Moy project. Local firms are being used and there are local apprentices, labour and skills. That is the first of the latest sections. We can give you the information on that aspect again. However, on the overall procurement side, we have the Procurement Reform (Scotland) Act 2014, which brings in aspects of community benefit. It is highly competitive, which is why we have tendering to ensure that we get best value from the tenders that are produced.
The new framework agreement and the form of capital funding that we are using will ensure that more Scottish firms and, potentially, wider UK firms will benefit from the A9 projects.
Okay. You have ruled out use of the mutual investment model for the A9. Has the MIM been ruled out for any other transport projects, such as the A83 or the A82?
11:45
I refer you to the infrastructure investment strategy that the Cabinet Secretary for Finance and Local Government produced. A number of different routes of funding will be used for all major infrastructure projects, including the Scottish Government bonds that the First Minister launched. Until we determine the correct procurement route for each and every one of our transport projects, it would be premature to say what will be used for which, apart from for those that have been determined to date.
As regards the business cases that have to be put forward and the value for money aspect, we have considered the mutual investment model, and we are open to using private funding. Indeed, we have done: there is a line of £147 million in the budget for next year, which concerns what has been privately funded. That must be appropriate, but the mutual investment model was costing 16 per cent more than what we had initially determined. That is a risk for the Government in relation to the availability of capital. The cost increased to 28 per cent, and that was one of the main value for money reasons we chose not to use that option for that particular route—although that does not stop future Governments using the mutual investment model across a number of infrastructure propositions at some point in the future. That is what the Cabinet Secretary for Finance and Local Government set out in the documents accompanying the budget.
I would like to get some clarity as to what, specifically, was spent on active travel last year. The draft budget indicated a sum of £159.8 million, I think. Is that a reduction from the previous year?
I am looking for the figures for active travel and sustainable—
I am interested in the specific active travel component of that budget line, which has incorporated other things in recent years. I am trying to isolate what was spent last year and to establish whether there has been an increase.
If you are looking at the figures for support for sustainable and active travel, you will see that the outturn for 2024-25 was £122.7 million. In 2025-26 it was £135.9 million. For the coming year, it is up to £226 million. In addition to that, there are low-carbon projects. The increase there would include bus infrastructure. I have had discussions with the committee before about how we have combined those elements. It would make sense for local authorities for bid for some projects for planned-for integrated active travel and bus routes. Looking forward, we understand that some of that funding will be on EV aspects in particular. On active travel, we have tried to spend as much as we can when we can. The biggest frustration has been in not being able to pursue things during the year. Sometimes things have been late in terms of providing the funding through the door.
Is there anything else on active travel and the comparison? I feel reasonably comfortable that we are doing what we are spending money on. There has not somehow been anything reduced from that. The biggest challenge has been in the ability to plan for multiyear funding and the release of funding mid-year.
I am concerned about the transparency around that. You mention the bus infrastructure fund, but I am specifically asking about active travel and the infrastructure projects. Are you saying that you cannot disaggregate the spend on those things? It should be fairly easy to point to a bus lane as compared with a cycle—
We will do that with final allocations. A lot of active travel has now moved over. I think that it was Patrick Harvie who led the change as to how that area was funded in tier 1 and tier 2, particularly for local government. What does that mean? It means that local government, which is closer to the projects, can determine what is required locally, rather than using Sustrans—now the Walk Wheel Cycle Trust—to do that, as it would have done previously. A great deal of the spend on that comes under tier 1 and tier 2. That goes back down to level 4, probably—and I have not been able to look at the table for that, particularly without my glasses on.
Is there an increase in the active travel budget for the coming year, or not?
We will certainly be maintaining our active travel allocation, but we are still to finalise how we are distributing that line of funding. We have a lot of plans ahead, as do local authorities, for tier 1 and tier 2. I will be happy to come back to you to give you certainty that the active travel element of that overall budget line is continuing in a positive way.
Do you want to come in on that, Catherine? Have you identified the budget line?
Yes. I just want to come in on the 2025-26 figures, the autumn budget numbers, or even the outturn. What you are not seeing is that, in 2025-26, there was a separate line for cycling, walking and safer routes funding in central Government. That programme has now stopped and that funding is now within the active travel line for 2026-27. So, it is fairly flat across the two years, with the difference being the bus infrastructure funding.
Thanks for that. You are confirming that the bus infrastructure fund is £60 million. The Confederation of Passenger Transport said recently on social media that it was £60 million, but you can confirm that it will be £60 million within the wider budget line.
Yes. I have said that to you.
Is that enough for the whole of Scotland?
Well, is it ever enough? We could spend more in all these areas. Part of it is for the planning and delivery. In terms of the disruption, as the spend is being rolled out, there will be challenges in making sure that local authorities or transport authorities are running their systems. The fund is fairly ambitious in terms of spend for delivery, but, once it is delivered, the capital spend will allow passengers to experience the improvements. Therefore, it is incremental: every time you are building a new lane or whatever, it is then on to the next thing.
It is a big boost, and it has been welcomed by local authorities, regional transport partnerships and the bus industry. It is what they really want to help with the reliability that everybody is talking about.
I will go back to Alison Irvine’s earlier point. You spoke about the need to balance investment in bus, concessionary travel, investment in infrastructure and the passenger experience and reliability of services. I am just thinking about how the Government makes these choices. You could look at the policy of dualling the A96, and you could say that, if the Government switched its policy to dualling key sections of the A96, the saving that that would make over a number of years could be invested in capital infrastructure for bus for the whole of Scotland as well as for the A96 corridor. The Government has choices that it can make. I am trying to get a sense of where bus sits in that, and whether £60 million might be enough for this year. If we are looking at a transformation of bus services, surely we need substantially more than that if we are to get the most out of modal shift and investment in public transport and achieve the change that is needed.
What we need to do for active and sustainable travel, bus infrastructure and bus support will need to continue, as we said in our earlier discussion on climate change. The trajectory of that will need to continue for this comprehensive spending review period and this carbon budget, but also thereafter and onward.
People and politicians can make a choice about whether having the Nairn bypass is more important than having the bus infrastructure fund, and they can play each of those off against each other. That is not our approach. We have to do both.
The point that I was making was about key sections. The Government recently suggested that the policy would be to dual key sections, such as the Nairn bypass, but it would stop short of full dualling.
No, that is not correct. That is not what we said, and I will be answering a Government-initiated question later today that will help to clarify that.
Mark, I am sorry—we are so short of time. You pushed the envelope quite a lot on that. Sarah Boyack, over to you.
I have a single question. A recent Transport Scotland press release highlighted the broad scope of the £85 million low-carbon programme budget line. Can you give us a more detailed breakdown of the budget, particularly the amount that is being invested to support public EV charging, installation and incentives to support EV uptake? We discussed that in the earlier evidence session, but can we have a breakdown right across that budget?
We are still determining some of that. We can write to you about the EV issues, but to take one example, £10 million of that will be for rural and islands infrastructure for EV. I am getting a signal from the convener that I should come back to him.
We are so short of time, and I am trying to help. It would be useful for the member and for the committee if we could get that in writing. Maybe one of your officials could make that happen, cabinet secretary. Now we come back to Mark Ruskell for another straightforward question.
Is there money in the budget for the purchase and upgrade of Ardrossan harbour?
Yes. We would want and expect to see the purchase completed in the current financial year, so the funding for that is in this year’s budget, and thereafter there is on-going funding for our ports and harbours. Upon purchase, Caledonian Maritime Assets Ltd will immediately want to do some work, including on the provision of ferries and then ports infrastructure, and thereafter, in future years, there will be provision.
I would like you to clarify something, cabinet secretary. In the past, you have made various announcements on Ardrossan harbour, and I think that you used the word “imminently” about three and a half or four months ago. Can you define “imminently”? Is it going to happen in the next month, two months or three months? What is going on?
I am keen to use this year's financial provision to secure the purchase. It is complex. One aspect is negotiation: the heads of terms have been agreed, but the detail still has to be worked through. Some of that goes back to the 19th century; there has been no transfer of property for some time, so there is a lot to it. We want to have as clean a title as possible, so I ask members to bear with us. I know that there is a lot of interest in the matter, and I will inform Parliament at the earliest and most appropriate opportunity.
Of course, if a property has not been sold for a long period of time—sorry, I am speaking as a surveyor now—it is sometimes much easier, because there is a consolidated title that has not been changed. I think that we are all looking for an immediate answer.
Alison, you will tell me that I am wrong.
As the cabinet secretary has already said, the purchase is a complex deal that needs to be worked through. I am under no illusion about how important it is to the cabinet secretary, and I welcome your comments as a surveyor.
That is probably as far as we are going to get on that.
Douglas Lumsden has a couple of questions.
Cabinet secretary, can you provide any more detail on the proposed air departure tax?
That is being led by the Cabinet Secretary for Finance and Local Government, but we can tell you that the transfer power is now being consulted on, so I encourage everybody to get involved in that. The power will apply from 2027, but for the first year, the level will reflect the UK’s air passenger duty level. We will not, therefore, introduce something in the first year. We have an intention to introduce something in relation to private jet travel, but it would probably be best if that aspect was led by the Exchequer.
So it is going to be pegged—
In the first year, yes.
In the first year, people going on holiday will be no worse off, but no decision has been taken on what happens after that.
Through the consultation, I have heard from different people that there are opportunities there. We want to ensure that we do the right thing by the people of Scotland and by air passengers, and that we understand the airline market itself.
In advance of that consultation, have you done any modelling work to see what the impact would be on our tourism sector if the costs on travellers coming to Scotland were put up?
We will be pegging our levels to the UK Government levels. With regard to the transfer of powers, it was agreed on a cross-party basis to make changes to the Scotland Act 1998 to provide us with those powers.
You are making assumptions that have not been made, so if you have views, I would encourage you, and others, to take part in the consultation that is currently taking place.
Finally, the change that we are discussing has been made in respect of the proposals for a private jet tax. How much do you expect that that will take into the budget when it is introduced?
As I said, the policy is being led by the Cabinet Secretary for Finance and Local Government in relation to the Exchequer as a taxation measure. I will ask her to provide the committee with information, if that has been produced.
Okay, so you have no information on that.
I am not a lead on that; it is being led by the finance secretary.
I think that it would be helpful, cabinet secretary, for the committee to get some feedback on that; I would be grateful for that.
It will be available. I am just saying that I do not have it, because I have not been a lead on that.
The next questions are from Bob Doris.
Cabinet secretary, the “Scottish Budget 2026 to 2027: climate change taxonomy” document, at the very end under the heading “Next steps”, says:
“the Scottish Government has launched a Net Zero Assessment of new and significant expenditure, which will be mainstreamed … throughout early 2026.”
The committee would be interested to know how those net zero assessments work in practice. It would be helpful if you were able to give us an example of the decision-making process that leads to specific budget decisions that are embedded in the draft budget before us.
12:00
I might bring in Catherine Jess-Gibson on that question, but it is probably most appropriate for Gillian Martin to answer when she comes to committee next week to give evidence on the climate change plan.
It is for early-stage and new projects, so it will, in my understanding, be for projects at the start rather than continuing projects. It will be for new policies that are coming forward. I do not know whether Catherine Jess-Gibson has anything to add on that.
I have nothing further to add.
I have a very brief follow-up question, cabinet secretary—again, it might be one for you to consider rather than answering just now.
Clearly, as Cabinet Secretary for Transport, you will have a lot of budget priorities. You have mentioned some of those today, and many are linked to net zero. However, difficult decisions have to be made, and we have another cabinet secretary in charge of the net zero aspect. What is the interaction between those two portfolios in coming to those decisions?
We have a responsibility ourselves to deliver what we set out in the climate change plan and in respect of considering how we drive forward net zero. I emphasise that reaching net zero through carbon emissions reductions runs across all our policy areas with regard to the choices that are made, so we have to co-ordinate. Some points were made earlier about housing and energy, EV charging and other areas, and that shows us why there has to be alignment across Government in a lot of these areas. We take our responsibilities very seriously to ensure that we deliver on the carbon emissions reductions targets for which we are statutorily responsible.
I will not come back in on that, but I note that it is an emerging area of scrutiny for committees, as we go forward, to understand the decisions that Governments are making, and how they are made through that prism.
Indeed.
Sue Webber, do you have any questions?
It is just a very short question on the bus pilot. Cabinet secretary, you indicated that you have chosen a £2 flat fare. How was that set? Everyone aspires to have a bus service as good as the one that we are fortunate enough to have in the capital. Lothian Buses has had an increase in passenger numbers, but only over weekends, and it has announced an increase in its single fare to £2.40. With regard to the £2 flat fare, therefore, I am trying to figure out how we manage the public’s expectations about how viable such a cap may be. We all know that it is a pilot project, but we still need to imagine how that might pan out, should it be successful, and what is actually viable for running a bus service.
You make an important point about viability and whether £2 is enough to deliver what is required. In parts of the rest of the UK, for example, the cap is £3. I will be up front: it was part of negotiations on the budget, and the Government’s requirement was that we looked at a £2 bus fare cap. With regard to whether it works or not, it is potentially very marginal. Part of the lessons from the pilot will be whether £2 is either too low, or low enough that it creates increased patronage. Those are exactly the sort of things that we need to consider as part of the pilot.
That is fine—I said that it was a short question, convener.
Thank you—we like short questions and short answers.
We seem to have caught up on where we had hoped to be, so I thank the cabinet secretary and committee members. We will now move into private session to consider the evidence that we have heard before we get the Cabinet Secretary for Climate Action and Energy in to speak to some Scottish statutory instruments. Thank you, cabinet secretary, and thank you to your officials for their input.
12:03
Meeting continued in private.
12:18
Meeting continued in public.
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