Chamber and committees

Let me finish my point first.

Lothian Buses is the largest municipal bus company in the UK. The City of Edinburgh Council owns 91 per cent and the other councils in Lothian share the remaining 9 per cent. In its last profitable year, prior to the Covid pandemic, it paid out £7.7 million in dividends to local councils.

I will take Sue Webber’s intervention.

The £7.7 million that I just referred to is paid to the council, and the reinvestment in the network is made by Lothian Buses.

I also want to touch on the move towards a national integrated ticketing system. In my experience, bus companies are protective of their market shares and are reluctant to share the data that is required to allow ticket income to be properly allocated. An example of those difficulties can be seen by examining the performance of One-Ticket Ltd, which was formed here in Edinburgh in 2001. Its main objective was to increase the use of public transport and to achieve modal transfer from car to public transport in the Edinburgh and south east of Scotland transport partnership—SEStran—areas. The company brought together all the bus companies and ScotRail under the umbrella of an integrated ticketing system, but, in my experience, it has offered a very marginalised product. In 2010, it had a turnover of £1.3 million, but its annual accounts in 2017 identified total sales of only £850,000, and that figure has declined further in recent years. If a multiticket scheme is to be successful, the 20-year operations of One-Ticket in the Lothian area need to be closely examined so that lessons are learned and its difficulties are not replicated.

One mode of travel that was not mentioned in the review relates to the Edinburgh tram service, which does not qualify for the national concession scheme. Until last year, its costs were borne by Edinburgh taxpayers through their council tax payments; those costs are now being met by Lothian Buses. Although I understand that the tram service is considered a fixed-rail mode of transport and that, if it became eligible, there could be calls for other fixed-rail operators to ask for a similar subsidy via the concession scheme, it is the case that the bus company in Edinburgh is bearing the tram service’s concession costs, which not only distorts the transport market but impacts on the bus company’s profitability.

As a result of Covid, many people are still reluctant to take public transport. If we are to reduce the number of car journeys in our towns and cities, we have to reassure the public that, post-pandemic, public transport is safe and reliable. I welcome the report as a foundation from which to move towards a more affordable, reliable and accessible public transport system.

Before I make my contribution to the debate, I should make members aware that, prior to my election in 2011, I was employed by Lothian Buses for more than 20 years. Part of my responsibility was calculating route profitability across Edinburgh and submitting national concession scheme claims to Transport Scotland.

I welcome the Government’s fair fares review and its aim to support public transport to become affordable and accessible. The Campaign for Better Transport briefing highlighted that, in 2022-23, there were 301 million bus journeys in Scotland, with 146 million—or nearly half—made under the national concessionary travel scheme for over-60s and under-22s.

In the coming year, that support for the bus industry is expected to reach £370 million relating to concessions, and just under £50 million for the network support grant.

The low flat fare that is referenced in the review is the business model that my previous employer has successfully operated over many decades, based on a high volume of passengers on a low flat adult fare—currently £2—which allows travel anywhere in Edinburgh and right across Edinburgh, carried on 800 vehicles with an average age of just six years.

I thank the cabinet secretary for that point. She will be aware that Lothian Buses has recently extended into East Lothian and West Lothian. It may well be that it has taken on board the issue of low volume and further distances to be travelled.

Although a low flat fare is welcome, on its own it will not deliver the modal switch that the Government seeks. It will also require investment in new buses that are dependable, comfortable, well maintained and kept clean, and which have closed-circuit television to keep passengers and drivers safe. To make journey times more attractive compared with those taken by car, there require to be park-and-ride sites to reduce car congestion in our towns and cities, bus priority lanes in order that buses can compete, and bus trackers to provide some certainty on bus times. Without such improvements in vehicles and infrastructure, commuters will not move over to public transport no matter how cheap the ticket price.

All the above features already exist in and around the Edinburgh area. The result is that, at a time when bus patronage declined by 21 per cent in the 10 years leading up to 2019-20, Lothian Buses was carrying an ever-increasing number of passengers. In 2019, it carried 119 million—a 27-year high—plus a further 5 million passengers due to the expanded network that I have mentioned. Then the pandemic hit. Last year, Lothian’s total dropped by 14 million to 110 million passengers.

Despite that drop, only last year, Lothian Buses added to its long list of transport awards when it won two prizes at the UK bus industry awards. The first was for excellence in transport accessibility, which recognised improved access to travel for disabled people, and the other was for excellence in innovation and technology. That highlights what can be achieved when a transport operator is owned by the public and can invest in its service without being concerned about ever-increasing and unsustainable shareholder dividends that are demanded by a large parent transport group.

Recent major food organisations have warned that new Brexit border rules could cut the shelf life of fresh fruit from mainland Europe by a fifth and leave some deliveries from the European Union unsaleable. Does the minister share those concerns, and has the Scottish Government made any assessment of the impact of Brexit border rules on increased food waste?

To ask the Scottish Government what assessment it has made of any impact that stagnation has had on Scotland’s public finances, in light of the final report of the Resolution Foundation’s economy 2030 inquiry, which found that the United Kingdom is a decade and a half into a period of stagnation. (S6O-03268)

I thank the Deputy First Minister for that answer. The Resolution Foundation found that benefit levels have not kept pace with prices, and that people who rely on benefits have had their incomes reduced by £3,000 at the same time that wealth has risen from three times to more than seven times national income since the 1980s. Given the powers that it has, what steps could the Scottish Government take to address that?

Yes; before we lose sight of the points that were raised earlier, I thought that I had better come in with my questions.

Stacey Dingwall spoke about public procurement. When the Public Contracts Scotland portal was introduced in 2008, it was cutting edge, it brought a lot of contracts together and it gave a lot of small and medium-sized enterprises the option to bid for contracts. However, my experience from being on the Economy and Fair Work Committee is that there is a lack of capacity in micro and small businesses, and there is a perception that there is too much bureaucracy, whether that is true or not. What practical steps need to change in procurement so that SMEs can help to keep money circulating in the local economy because local businesses are using local services and so on?

My second question is to Matthew Brown and Neil McInroy. What is the definition of “local”? If we are to keep money circulating in the local economy, does that mean businesses that operate in that council area, or does it mean businesses that have a registered office in that area? Does “local” mean where the invoice is paid at the end of the day, which might be hundreds of miles away from where the particular business is operating?

Are quick quotes of benefit to SMEs, and should the threshold be increased?

How do we keep the money circulating in the local economy?