Official Report 825KB pdf
Our second item of business is an evidence session on the 2025-26 Scottish Government budget. Today’s evidence will focus on the transport portfolio. I welcome Fiona Hyslop, the Cabinet Secretary for Transport, and her supporting officials from Transport Scotland. We have Alison Irvine, chief executive; Kerry Twyman, director of finance and corporate services; and Bettina Sizeland, director of bus, accessibility and active travel.
Before we move to questions, I invite the cabinet secretary to make a short opening statement. I am not sure that anyone ever listens to the “short” bit, but we will see, cabinet secretary.
I think that I have good behaviour on that count, convener. Good morning, and thank you for the invitation to give evidence on the 2025-26 transport portfolio budget. The budget, which is investing more than £4 billion in transport, seeks to make real, substantive and sustainable progress in delivering on the priorities of Government and, critically, of people, businesses and communities in Scotland.
Across Government, we want to improve public services to be more efficient and effective. In transport, that means making them more productive and sustainable for the public purse. We are proud that, here in Scotland, our rail services and a significant part of our ferry services are publicly owned and controlled, and we want more people to choose to travel by public transport for work, study and leisure. That helps make our public transport system more financially sustainable and reduces carbon emissions from travel.
We are investing more than £1.5 billion in Scotland’s railway to support the provision of ScotRail and the Caledonian Sleeper passenger rail services, and to maintain and renew network infrastructure in Scotland. We are renewing Scotland’s rail fleet with investment of £158.6 million, which will allow us to start the procurement of the intercity train fleet replacement and complete the enhancement and electrification of the East Kilbride line.
We will spend £533 million on our vital ferry services, supporting our island economies and connectivity, as well as strengthening resilience across the network. We intend to deliver six new major vessels to serve Scotland’s ferry network from early 2025, followed by a further seven electric vessels in future years.
Improving public transport is part of our response to the climate emergency, but we know that we need to do more. Therefore, in 2025-26, we will prioritise £263 million for sustainable and low-carbon travel to encourage more people out of their cars and on to more sustainable transport options; to help local authorities leverage more private investment for electric vehicle charging; and to create safer and improved routes for walking, wheeling and cycling.
Crucially, the budget will include a new bus infrastructure fund to help local authorities to reduce the impact of congestion on bus journey times for passengers and make travelling by bus more efficient and attractive. That comes on top of our record funding for bus services, ensuring that more than 2.3 million people continue to benefit from free bus travel. We will begin to extend our offer to asylum seekers and young islanders relying on ferry services.
The ability to move people, goods and services around Scotland and beyond is a key building block to growing the economy, leisure and tourism, and making our nation more prosperous. Next year, we will invest more than £2.1 billion in transport infrastructure to maintain and improve our assets and make our transport network safer.
I am determined that we make progress towards completion of key projects. The Scottish budget will enable the Tomatin to Moy section of the A9 to be dualled, and for progress to be made on procurement and development of the remaining sections, as well as on dualling the Inverness to Nairn part of the A96 corridor.
The budget will enable Transport Scotland to invest in a safe and reliable network, support the transition to net zero and improve how we help to keep families, friends and communities connected, nationally and internationally. I welcome the opportunity to discuss how we intend to do that and to take members’ questions.
Thank you very much. I will give you the benefit of the doubt on the fact that that was short. Thank you for doing it that way.
Let us talk about electric vehicles and charging points. How much is in the electric vehicle infrastructure fund for the fiscal year 2025-26?
In terms of funding and deployment, a lot of the £30 million of the total of £65 million that we have allocated to date is being spent this year. Eighteen local authorities have already received funding, with another 14 to receive it in this financial year. That allows us to leverage in investment from the private sector. Increasingly, people are aware that the private sector should be picking up more of the responsibility for that. We set out our EV draft implementation plan at the end of last year.
On charging, some electric vehicle infrastructure funding has been paid out to date. On additional funding, I ask the officials where we are likely to get to next year. However, most of it will be deployment of funding this year for delivery next year. A lot of the focus on electric funding next year is on what we can do to help vehicles in particular.
If any of the officials wants to give information about additional funding for EVIF for next year, that would be helpful.
Kerry Twyman, it would be very helpful to know what has been paid out so far and what will be paid out this year.
I can tell you that £4 million has been paid out generally to local authorities, and there is £18 million this year.
How much?
Just over £4 million, with £18 million to the local authorities to date. The remainder of the £30 million, which is for this year, will be paid out to local authorities in the coming months before the end of this financial year.
Is that all of the balance?
Yes.
Sorry, but did I hear you right that you have paid out £4 million this year? Is that what you said?
In the previous year—2023-24—£2.25 million was paid out for initial scoping plans, and we expect a further £2 million to be claimed by the end of this year for more plans. That is a total of £4 million. Our expectation at the moment is that the additional £26 million will all be paid out in grant offer letters by the end of this financial year. That is the trajectory that we are on at the moment for bids coming in from local authorities. At the moment, it is all contained within this year’s budget and the expectation is that it will go out this year. Given the firm commitment to the £30 million, if any does not go out this year, we will ensure that it is funded next year.
I can reassure you that we are all standing ready. I have visited Ayrshire, where people explained that they will be able to move very quickly. Further, for every £1 invested, we can leverage in, I think, about £3.20 from private investment to expand that. You will start to see more of that scale-up. As you know, we have already met our commitment to reach 6,000 EV chargers by 2026 two years early—that was done in 2024.
I know—the Cabinet Secretary for Finance and Local Government said that to me in the chamber when I asked the same question. Of the £2.3 million that has been paid out and the £2 million that is projected to be paid out in the short term, how much private capital has been raised to balance that?
The initial spending was about some of the planning activity. On the actual deployment, I referred to the £18 million—my officials will correct me if I am wrong. That has gone to, for example, the Highland and north consortium, which is bringing local authorities together as a package, and to the Glasgow and Ayrshire consortium. That was around November, so they have those funds.
I am trying to work this out. The point about the £60 million was that £30 million was to come from the Government and £30 million would be deployed by private investment. The Government, as I understand it, has near enough contributed £4.3 million. I want to see that £4.3 million has been generated from private investment.
As I said, it is more than that—there is the £18 million that has gone to the consortiums. Ayrshire and Glasgow have come together and a package was announced for that. In fact, we did that when the Scottish Government Cabinet met in Ayr, when I met all the partners that are involved. The funding has gone out. All that I am saying is that there is probably a remainder of funding to go out in this financial year. The majority of the £30 million has been issued and, as part of the proposals, there is leverage—on average, for every £1 of public investment, £3.20 of additional investment is generated from the private sector.
In terms of the deployment, I was in Inverness and announced the allocation for the Highland and north consortium, after which it would start deploying. Obviously, that involves working with partners to develop, implement and deliver the actual chargers.
In addition, you will know that private sector chargers are developing all over the place—for example, I officially opened the rapid charger in Dundee last year. The pace and rate are increasing. You will see that more in deployment next year, but the funding has gone out this year.
Okay—I kind of understand that. I am just trying to find out whether it is value for money and whether we are getting the private investment. I think that you committed to having 24,000 EV charging points in the next five years. Are you confident that the money and the investment will deliver that?
There is increasing interest from the private sector, as you will be aware. That was set out in our implementation plan, which we wrote to the committee about when we published it at the end of last year. On the 24,000 figure, in Scotland, it is as important to identify the location as it is the volume. In rural and island areas, there is a challenge. For next year, there is an additional £5 million for rural and island connectivity for EV chargers to deal with areas where there is a market deficit in relation to deployment. There is funding next year, particularly for rural and island areas.
On value for money, we will report on how that £30 million has been deployed and what additional funding has come in from the private sector. When I had a meeting with the Climate Change Committee advisers sometime last year, they said that they were a bit more relaxed about the 24,000 figure, and we will see what happens when the Climate Change Committee reports next year. The advisers thought that, given our geography, location will be more important for Scotland. The 24,000 figure was an extrapolation from United Kingdom-wide analysis. Bearing in mind that Scotland has more chargers per head of population than anywhere outside London, within the UK, we are in a strong position.
You made a point about rural areas. I do not want to be parochial but, in the Highlands and Islands, there are big distances to travel, more hills to climb and fewer charging points. How will you target those areas? Are they getting increased funding compared to Dundee and Ayr, both of which you mentioned? I did not hear a single place mentioned that was north of Perth.
I think that I did. I said that, when I was in Inverness, I announced one of the early allocations for this year.
You did.
That was for the north consortium.
Inverness is only halfway to the top, though.
You mentioned Perth and, to be fair, I talked about the Highlands and Islands and the north allocation.
I recognise your point, however. In addition to the £30 million that is being spent this year, there is additional money in the 2025-26 budget specifically for rural and islands connectivity. That might not leverage in the same level of private funding, because cities such as Inverness and Aberdeen might be more attractive in that respect. Certainly, we need to make sure that there is provision for areas north of Inverness and in our islands. That is why there is additional funding for next year that is specifically for rural and islands connectivity.
Thank you. We will now move to the deputy convener for his questions.
Convener, I have a supplementary question that I wanted to ask.
You did, actually—how very rude of me. I apologise.
09:15
I apologise to the deputy convener for cutting across him.
On you go.
You might recall, cabinet secretary, that when you were before the committee in September, I asked about the accessibility of EV charging bays and, in particular, the PAS 1899 accessibility standard, because of my concern that Glasgow had only four accessible spaces out of 337 bays. Since then, there has been really positive news. For example, I am aware of the draft implementation plan, which was published in December and which specifically mentions accessibility provisions.
However, I would like some clarity, perhaps from officials if you do not have this information to hand. That draft plan says that the new bays should have
“a reasonable proportion of charge points”
that
“comply with ... PAS 1899”,
but it does not define what “a reasonable proportion” should be. It also says that “grantees” of Scottish Government funds should “demonstrate appropriate measures” in relation to implementing PAS 1899. Those with wheelchairs and other disabilities need larger, more appropriate bays in order to charge their EVs, and the charging points must be in the right places to ensure a fully accessible network.
Glasgow City Council has told me that its approach will be based on an equality impact assessment. We have 32 local authorities; this is a national network that is needed for all Scotland’s people; and I just wonder how the draft implementation plan will be delivered on the ground so that the Scottish people can be assured that there is a fully accessible network for all those who wish to drive electric vehicles.
I am not quite sure how that applies to the 2025-26 budget, but my recollection is that, when you previously raised this issue with me, I wrote to you to explain that with regard to this year’s funding, which we have been discussing, and the allocation to the councils applying for the funding for EV charging, they had to set out how they were going to achieve the requirement for that standard.
I will look again at the letter that I sent to you and at the draft implementation plan that we issued last year to see whether that is clear enough. I did reply to you in writing after you raised the matter as a constituency issue, and I am happy to do so again to ensure that the requirements that are being made of the councils receiving funding are clear. I have to say that I thought that the letter that I sent you made it quite clear that there would be specific requirements with regard to the standards, particularly in relation to the regulations that you have talked about.
I will double check the letter, cabinet secretary. The implementation plan that you have mentioned, which was published in December, uses the phrase “appropriate measures” but it does not specify what those measures might be—that is my understanding, and I apologise if I have got that wrong—and it also does not specify what “a reasonable proportion” of these charge points would look like.
I also thought that this was relevant to budget scrutiny, because in financial year 2025-26, there will be public sector investment in the EV network, and I want to ensure that that investment is guaranteeing accessible EV parking bays.
As I have explained, there is £30 million going out this year, with an initial £5 million for rural and islands connectivity next year. As for what the phrase “appropriate measures” means, I think that you are right to pursue that question. We will identify how charging measures are being deployed, but I am afraid to say that, as far as the financial provisions are concerned, that is a level of detail that I do not have to hand today.
Okay. Thank you.
I apologise again, Bob, for missing you out. We will now go to the deputy convener, Michael Matheson.
Good morning. Sticking with the issue of EV charging, I would say that one of the challenges with the deployment of EV charging in rural areas—and in some urban areas, too—is the limitations on the local grid to provide charging connections. How good is the partnership working between the distribution network operators in the north and south of the country—Scottish and Southern Electricity Networks and Scottish Power Energy Networks—and the consortiums to identify and try to address areas of constraint in deploying EV charging as a result of local grid capacity?
Grid capacity is the single biggest issue that we face in our transport network and, indeed, in our decarbonisation work. I know that the committee has taken an interest in the issue; indeed, when I was deputy convener, we had a very short and sharp inquiry on it, because it does link with the wider issue of transport connectivity.
Along with Alison Irvine, the chief executive of Transport Scotland, I met with SSEN in relation to some of the wider connectivity issues, because we have a number of issues across different modes. However, you are right; we need to ensure, in particular, that there is capacity and that the capability to deploy is met. Clearly, local councils will be engaging on this, too, as they lead on such issues.
My concern is that, when it comes to the current UK provision and the decision making on priorities with regard to connectivity, we as a Government and as a Parliament collectively ensure that Scotland’s needs are properly met. The convener has previously pointed out the geography of Scotland’s rural and island areas, and we want these things to be deployed as well as possible.
However, this is a constraint, and if the committee wanted to look at the issue further, it could do so. I should point out that I do not lead on energy and grid connectivity, but I do make my interest known to colleagues and increasingly have more direct contact. We have agreed with SSEN to look more widely at some of the strategic issues in response not just to its needs but, more important, to the public’s needs with regard to grid connections.
Secondly, can any of this funding be used for pop-up EV charging facilities, particularly in those areas where we know there will be a significant increase in demand during holiday periods? If you look along, say, the A82, places such as Fort William will be very busy at those times, and there is also Skye, which has a standing population of about 10,500 people but, at peak tourism time, can have more than 50,000 people on the island. Such places might not need the full infrastructure, but there will be times over the course of the year when additional infrastructure will be needed to support demand for EVs. Is there scope for some of the funding to be used for pop-up facilities, with, say, partnership working with the DNOs to see how such an approach could be deployed to help reinforce existing local infrastructure at peak times?
Again, that kind of deployment, particularly in places such as Skye and Fort William, would be a decision for the Highland Council. My instinct as a former tourism cabinet secretary is that our tourism season is extending and extending; it used to be in the summer months, but it now runs from March right through to November. As a result, one could probably make a strong case for permanency of provision.
Our role, though, is to provide the funding; we do not identify specific locations. That is why we are working in partnership with local government—they are better placed to identify individual areas. Your point about the A82, Fort William and Skye is well made, but I think that there should be permanent rather than pop-up provision there. After all, if you are making that investment anyway, you are probably better to put in more permanent rather than just pop-up provision, but I will take the issue away for discussion with my Convention of Scottish Local Authorities colleagues and hear their thinking on it. It is probably quite a creative matter to consider.
Thanks. Can I now—
Just before we move off EVs, Mark Ruskell has asked to come in briefly.
I will be very brief. Obviously, the public charging network is hugely important, but it is very expensive to use. The cheapest way to charge your EV is at home with a night-time tariff; it is a fraction of the cost of using the public network, and I suspect that that is where the majority of people will want to charge their EVs from day to day. What provision is there in the budget to support householders to introduce EV technology, including ways of allowing them to get across pavements to their vehicles and charging points?
Officials can correct me, but I do not think that there is anything for loans for individual households. However, your point is well made. We have tenements, housing without driveways and so on, so how we support the market in that respect is increasingly becoming part of what we need to look at.
When it comes to deploying these things, a number of innovative inventions are being put together in Scotland by Scottish companies, but one of the biggest issues is ensuring that you do not disrupt pavements for people with disabilities and so on. I go back Bob Doris’s question; whatever we do has to be accessible to everybody, and we need to look at what can be done in that respect.
I visited Trojan Energy up in Aberdeen and saw its very interesting invention. There are others, too—I should say for clarity that I am not promoting that product alone. What we have done is bring together officers from the Society of Chief Officers of Transportation in Scotland to try to identify areas of commonality, guidance on what can be done and, in particular, standards. Part of that is about how we can cut down on regulation and planning to ensure rapid deployment when we are in a position to do this on a mass scale. That work will help ensure that we are in a much stronger position when we move to deployment.
I understand that the Department for Transport has produced guidance, particularly on cross-pavement gullies. I realise, though, that that is beyond the budget.
Yes, it is, but it is also an enabler in helping deployment. Alison, did you want to come in?
The only thing that I would add is that the EVIF funding that we are providing to local authorities is not just for your typical side-of-the-road-type charging network. It will also help them work through their estates to come up with solutions that will help address the challenges that you have outlined.
Indeed, some of the additional funding in this year’s budget is not for actual deployment, but for work within councils more generally.
Let us pivot to buses. Around 80 per cent of public transport journeys are made by bus. However, for a number of years, there has been a decline in the number of routes that are available in many local communities, urban and rural, which has resulted in some communities, which do not have a rail link or an alternative to buses, feeling isolated from the point of view of access to public transport.
Alongside that decline, an increasing amount of money has gone towards concessionary travel—around nine times the amount of money that goes into supporting bus routes that are not commercially viable goes towards concessionary travel. Do you think that that balance in the budget is right, given that there are communities where people feel as though, although they have a concessionary bus pass, they cannot access buses to make use of it?
I think that that is a very important point to identify. Even those of us who represent constituents in the central belt will know that, in rural areas, the availability of buses is important, and a number of us have reflected on that in the past in this committee. We must remember that we have a deregulated system of buses, in which the vast majority of bus providers are private companies.
As far as the funding model is concerned, you are right to identify that the vast majority of funding goes towards supporting our very popular and welcome concessionary scheme, whereby 2.3 million people in Scotland have free bus travel. Does the funding model allow us to use that funding to organise the system in a better way? It does not, because of the deregulated position that we are in. Can and should that change? Yes. That is why the committee has looked at all the different statutory instruments that have come forward under the Transport (Scotland) Act 2019, which provides the opportunity for franchising and bus partnerships. Those regulations are now in place and local authorities have the power to establish such arrangements.
I am not pretending that that will happen any time soon, but there is a wider issue that I have asked Transport Scotland to work on with the Minister for Agriculture and Connectivity, Jim Fairlie, who has direct responsibility for buses. I would like them to identify what we can do to make better use of, and to leverage, the investment that is provided to local authorities. However, the committee will be well aware that the legislation on concessionary travel is quite prescriptive in its provision of an entitlement and a funding mechanism, so making any strategic changes to that will be a task for the next session of Parliament. All parties should come together to look at how we can best use that heft of public investment to ensure that, as part of that arrangement, we have stronger provision in those areas where there are currently challenges.
The problem that we have is that bus patronage has gone down post the pandemic, and it is a struggle to get that back. You have identified that there is a vicious cycle here. People will not use buses if they are not reliable and the routes that take them where they need to get to have been lost. Through the work that we are doing at East Kilbride and Hairmyres, we are trying to make sure that we end up with a hub that allows people to use buses to access the rail infrastructure. That connectivity with other transport modes will be very important.
We cannot continue as we are. We need to bring about change, but we face challenges with regard to the pace at which we can do that and the levers that are available to us. Bettina Sizeland might want to comment more generally on our work in this area.
09:30
We are looking at what we can do to improve bus services with the operators, local authorities and regional transport partnerships. We are initially looking at what we can do to improve the reliability and punctuality of bus services. We are also looking at how we can make best use of the network support grant. At the moment, it is a universal offer that all operators can apply for, but there is only so much that can be done with 14.4p per kilometre to improve service availability. We are also encouraging operators to look at best use of concessionary travel and how they can encourage more patronage and, at the same time, to look at improving services and service availability.
We must be spending the best part of about half a billion pounds a year on concessionary travel schemes for young people and older persons. Is that right?
Yes—the figure for 2025-26 is £414 million. A large amount of funding is going into concessionary travel.
It is a huge amount of money.
Yes.
It would be fair to say that bus patronage has been declining for many decades. That is not peculiar to Scotland—it is a trend across the board—but I feel that we need to think about whether that annual expenditure of almost half a billion pounds is contributing to a level of transport inequality, whereby some communities do not feel as though they are linked into the bus network. There are communities in my constituency where people simply cannot access bus services, even though they have a bus pass. There are questions about whether spending so much money on concessionary travel is the most effective use of public money to deliver the most efficient and best bus network for people.
There are a whole load of equity issues around bus transport. People on lower incomes are far more reliant on it. The committee that I know as the social justice committee—I apologise; I have probably got its name wrong—had an inquiry on employability, especially that of parents who are living in poverty. Transport has been identified as one of the key things that can make a difference in getting people into better paid jobs, education and so on.
I think that the issue of equity is extremely important, but the majority of people who use concessionary travel will be concentrated in the areas of higher population, which are our cities. The spend makes sense in terms of the numbers of people, but the pattern of concentration of population does not necessarily reflect the challenges that we face with regard to geographical equity.
However, I make it clear that what we do about that is an issue that needs to be looked at collectively, on a cross-party basis. We had a very good debate on the subject in Parliament last year. It was a debate without a motion in which members explored some of those issues. If we were to make such a shift, there would have to be a general consensus. We must protect people’s right to free travel, but we must also think about whether there is anything that we can do to get greater leverage. That would probably require legislation, which, at this point, will not necessarily be possible.
Transport connectivity is the glue in the economy that brings it all together, which is critical.
I want to turn to a slightly different issue—that of bus manufacturing in Scotland. Last summer, the Scottish zero emission bus challenge fund provided funding for the manufacturing of 252 electric buses, which will be distributed across the bus network. Various companies submitted bids for some of that funding. Of the 252 electric buses that are being funded through ScotZEB 2, 44 of them will be manufactured in Scotland. That represents 17 per cent of the overall funding package. The remaining 208 will be manufactured by Pelican Yutong in China.
In effect, we are using taxpayers’ money to subsidise the manufacturing of buses in China by a company that probably does not have to comply with fair work principles in the way that companies such as Alexander Dennis in my constituency do. What more can we do to ensure that, when we invest Scottish Government funding in supporting further electrification and decarbonisation of our bus network, we also support manufacturing jobs here in Scotland and do not simply subsidise companies in other parts of the world that do not comply with fair work principles?
When it comes to transport procurement, everyone will be aware that there are issues around what we can do in allocating procurement and ensuring subsidy control. It is part of the UK requirements that we must ensure that competition law is recognised and met. I am well aware that the member has a keen constituency interest in the ScotZEB programme. He will be aware that Alexander Dennis has received, by a clear margin, the highest number of allocations of any company in that area. As part of ScotZEB 2, as you identified, it is working on 44 zero-emissions double-decker buses as part of the successful consortium led by Zenobe.
In relation to ScotZEB 2, it is not correct to say that the rest of the buses are being produced in China. An additional 28 zero-emissions single-decker buses were originally going to be allocated to Alexander Dennis, but there was an issue around delivery to do with the lifespan of ScotZEB 2, so Volvo is producing those buses. They will not be made in China.
As to what can be done, there is still a desire by companies to expand their zero-emissions fleet. With ScotZEB, we have looked at—I am sure that the member will be very familiar with this—how we can crowd in private funding and use leasing to generate increased funding. That has grown, so we are encouraging bidders that were unsuccessful in the most recent round of bidding to work with interested funders to procure additional fleet. In that way, the private funding mechanism that we helped to develop and innovate as part of ScotZEB will be able to continue, regardless of the public funding that is available in that area. That is increasingly important. We are learning from that for heavy goods vehicles, which is an even more challenging area than buses. From next year, there will be funding available to identify how we can help with that.
With regard to fair work practices and how we can police a consortium that has submitted a bid, there is a degree to which we can do that, but the measures that we can take are constrained by the subsidy control regime. I am very supportive of investment in manufacturing in Scotland. I hope to visit Alexander Dennis at some point soon, at its invitation. Alexander Dennis is benefiting from ScotZEB 2, although it might not be doing so to the extent that some people would want. Companies such as Volvo have also received work through ScotZEB 2. Can we prevent people from procuring from companies outside Scotland? It is increasingly difficult.
Alison Irvine might have more to say on that.
There is one other aspect to add. The types of vehicles that Alexander Dennis manufactures are relatively limited in relation to what the bidders were looking for when we went through ScotZEB 2. For example, the bidders wanted to procure 166 coaches, and Alexander Dennis does not manufacture coaches. There is a combination of issues. As you can imagine, it is not necessarily straightforward.
Okay. I do not know where the Volvo buses are being manufactured, but it is certainly not in Scotland or the UK. I suspect that it is in Turkey, which is outwith the European Union and therefore its fair work practices.
If we are going to deliver a just transition and decarbonise the bus network, we need to not just decarbonise the buses but create a manufacturing capacity in Scotland to deliver that decarbonisation of the network because, otherwise, we will not be delivering a just transition. You will be aware that companies such as ADL are laying off staff, largely because of a reduction in work in the second round and because of the national insurance increase. It is important that we do everything within our £4 billion budget to help to support economic growth for manufacturing capacity in Scotland to achieve our objectives of decarbonising our transport system.
I absolutely agree with that in relation to what we can do. We want to try to achieve that as best we can within the legislative constraints in which we must operate, particularly in relation to subsidy control. That is why, as you will be aware, there has been a substantial investment on the economic side of things in order to help to promote that and, in particular to support Alexander Dennis in the development of its capacity to meet new markets as part of transition. The point is that that is part of what the market needs and that includes moving into coaches. Again, it is about how we help to develop the capacity to deal with the new demands that the market requires.
Thank you.
I am conscious of time already. We have been on the buses for 30 minutes and there are other aspects of transport, so, as always, short answers to short questions would be helpful—to me anyway. Mark Ruskell has a couple of brief follow-ups on buses before we move on to something else.
Cabinet secretary, you have spoken about the importance of investment in publicly owned transport, ferries and ScotRail. Obviously, largely, we do not have that situation with the buses, which are run by private companies. The community bus fund was an attempt to support local authorities to look at more public control through franchising and potentially through municipalisation. That standalone fund has been scrapped and is now part of the bus infrastructure fund for the next year. How will local authorities be able to take forward that work, given the new budget line? Does that approach meet the aspirations of councils to procure their own buses and run their own bus services, or at least control those services through franchising?
I point out that Lothian Buses is successfully in public ownership and is recognised as one of the best services—if not the best service—across the UK in its provision.
Unfortunately, because of the challenges we had on funding during the last year, we were not able to progress the community bus fund, due to the fact that it would have been for new, additional work that was not already legally contracted.
On where the budget lies, generally we have more pressures on our resource budget than on our capital budget. The bus infrastructure fund will help to reintroduce support that local authorities are asking for on bus infrastructure and I want to try to be as flexible as I can to help support those things for which the community bus fund would have been used. I will give you an example—although, I am not saying this is how it would be used. Highland Council has purchased a limited number of buses for a limited number of routes in relation to Inverness—I am not sure whether it was the community bus fund that Highland Council used for that. However, that is one use of it.
There is a lot of focus on Glasgow and Strathclyde and the Strathclyde Partnership for Transport in particular, but all the regional transport partnerships are looking at what suits them; for example, SWestrans is looking at what the south-west of Scotland’s needs are.
I will try to be brief. Although we have had to pause—I used that phrase deliberately last year—the bus priority fund, there will be funding for buses that can be used for infrastructure and for what the community bus fund would have been used for. I am not currently in a position to tell you what that is, but that is what I will try to do with the budget for 2025-26.
You are saying that the community bus fund will continue in some form or another. That is revenue. You also mentioned the bus partnership fund. However, there has only been about 5.8 per cent of the initial £500 million that was promised during this session. Can you give us some clarity as to whether that will meet the aspirations of councils to get buses moving quicker and avoid congestion within our towns and cities?
My recollection is that the community bus fund for the previous year was capital.
Sorry, I think that it was split between revenue and capital.
09:45
There was some split. There was a small amount of revenue. Most of what the new fund can be used for is help for capital works that the councils are requesting and needing for infrastructure.
Okay, but I think that £500 million was set out originally. We are way short of that—we are just talking about tens of millions, tops.
It was made clear—in fact, there was a correction from one of my predecessors—that it would be long term. Given that billions have been taken out of the Scottish Government’s capital budget, we cannot expect all our previous ambitions to be realised. Particularly in transport, so much of our budget has to go on keeping our existing system safe. That means that a lot has to go into rail. We have just finished negotiations on the control period 7 position for rail and there is a massive investment there.
Would I want to have more on bus? Yes. Do we have the capability to do it this year? We certainly have more than we had last year, which was a challenge. We are getting back the momentum on bus investment, but it is not at the level that we would have wanted. However, Scotland’s finances are not at the level that we would have wanted and are certainly not at the level that we had at the time of that commitment.
You have commitments around the A9 and sections of the A96 as well, which are an enormous pressure.
I also have ferries and fleet replacement. There is a whole load of different things that are in that capital budget.
I know that there are a couple of other members who want to ask questions on buses. If we get time at the end I will come back to buses, but I am afraid we have to move on to the next subject.
Cabinet secretary, moving on to ferries, the cost for the provision of the Clyde and Hebrides and Northern Ireland ferry services has near doubled in the past decade. That does not include fleet replacement and harbour upgrades. Can you give us some of the reasons behind why there has been such a massive increase over the past 10 years?
Which figures are you referring to as having doubled?
Service provision in 2015-16 was £174 million and it is now due to go up to £334 million.
There is a particular increase in more recent years and for this year coming. There will be increasing costs in relation to bringing in the six new vessels, the payment for that and the loan arrangement that was put in place for that. As you will recognise, over 10 years, there are big increases from inflation and our costs on the harbours and ports investment work, and so on. There are also significant pay issues. The biggest subsidy that we have put into services has been in relation to the road equivalent tariff, which came in substantially around that time—in 2015. If you look at the journey from Oban to Craignure, for example, with RET that fare for next year will be £4.70, whereas immediately before RET was introduced, that fare was £5.65.
We need to identify subsidising our fares structure as a way of realising income to an area. If we are in a position that ferries from Oban to Craignure are cheaper now than they were almost 10 years ago in 2015, that shows the level and degree of subsidy that we have put into the ferry services to make sure that our lifeline ferry services are providing the value that our islanders need.
You will know that one of the consequences of bringing in RET is that it also made tourism more attractive. That has brought challenges in some of our island communities, but it has certainly brought economic benefit to our islanders. They have been able to benefit economically from more tourists coming to visit our islands. RET is a substantial increase in subsidy. I am not sure whether you are suggesting that you want us to remove road equivalent tariff—I hope not. We know from our islands’ connectivity plan, and I suspect from the investigations of the committee, that RET has proved very popular with islanders.
No, cabinet secretary, I am not saying that. In respect of RET you mentioned 2015, and this increase came about post-RET.
That is because subsidy is not a one-off thing. Subsidy carries on each year.
Is it an increased subsidy because of increased passengers? I am trying to understand the almost doubling in cost. Is it because passenger numbers have doubled, which means that the subsidy has doubled? Why has it increased by so much?
This is basic economics, I suppose—it is finance. Even if you had the same numbers of passengers, you would still accrue the subsidy level each and every year thereafter. It is a substantial amount to subsidise passengers. It is a good and popular policy. We are not seeking to remove it unless that is a recommendation of the committee, but I sincerely hope that it is not.
I will move on to Ardrossan harbour. We had Caledonian Maritime Assets Ltd in a couple of weeks ago. It said that no decision had been taken on upgrades that would be required to Ardrossan. Can you give us any update on whether there is any money allocated in this year’s budget for those improvements or when a decision will be made on when those improvements could take place?
I absolutely appreciate everyone’s concerns around what can be done to ensure that our commitment to Ardrossan is realised. I am not currently in a position to give you the information that everybody is looking for. We are coming to a conclusion. I spoke to the leader of North Ayrshire Council at the tail end of last year. We are very clear that our commitment to Ardrossan is there, but the issue is how we realise that. We need to identify the conclusion of the business plan that we requested.
Of course, coming into this post, I looked at the history of the project. Originally, the partners to deliver the improvements were North Ayrshire Council and Peel Ports. Over the period, the Government has had to become involved and it is one of the items that is at the top of my priority list. I would like to give you information at this session; I cannot, but I am very conscious that I will need to report to the committee as soon as I can.
Would you be able to set out a timetable on that, cabinet secretary? We are looking at the budget for 2025-26. I do not think that there is any money allocated in that.
There is funding in the ports and harbours budget line, which, as you will notice, is increasing.
That business plan got the go-ahead. Is there money set aside to move forward with it in the coming financial year?
There is funding that will be made available for Ardrossan over the coming year should we get to the position that I can make a decision that makes sense for the Government, North Ayrshire Council and the provision at Ardrossan.
Can you not yet give us a date on when that decision will be made?
Much as I would like to, no, I cannot.
Cabinet secretary, can I just push you slightly on that without asking you to give everything away? Basically, as I understand it, Ardrossan needs a longer quay and more gantries to support the new boat. It would also need a liquefied natural gas storage tank. We are talking millions of pounds to do all that. Have you done an assessment of what that would cost? Can you confirm that there is sufficient money in the reserves to allow you to do that?
In terms of delivery, at any point it will be more than one year for that investment.
Yes, I understand that.
That is exactly what we have been looking at—part of looking at the business plan was to identify the cost base.
So, have you costed that out?
The business plan will have looked at the different areas of investment is how I would put that.
Okay. I note what you said, but Kevin Hobbs came in here the other week and said that the negotiation on Ardrossan ports was in the middle of nowhere. You are suggesting that it is not in the middle of nowhere. The suggestion of the middle of nowhere terrified people because it meant that after more than 10 years since we knew we needed to do it, we were going nowhere. Is that process in the middle of nowhere or do you think that we are in a better position than that? I will accept “better” because it will give islanders some hope.
We are in a better position than that. Although I would not have used those words, I understand why Kevin Hobbs would have wanted to relay that from his perspective. From the Government’s perspective, I can tell you that, as I said, I hope to be in the position sooner rather than later to be able to come to the committee to advise on what our intentions are.
Well, some good news. I think that is enough on ferries. Oh, the deputy convener wants to come in on ferries.
Yes, it is just on the issue of Ardrossan harbour, which is owned by a very wealthy private company that is highly profitable. Cabinet secretary, can you clarify whether a significant portion of the investment that is needed in Ardrossan harbour will come from the private company that profits significantly from the use of Ardrossan harbour or will it all have to be on the back of taxpayers’ money because Peel Ports is not prepared to cough up any investment in the facility?
You reflect some of the tensions that there have been historically over the situation at Ardrossan. You identify the ownership and the fact that the harbour is not in public ownership. Members will be aware that there is variation in the ownership of ports and harbours: some of them are owned by CMAL and some are not; some are owned by local authorities; and there are harbour trusts and other models. When we are looking at the different partners coming together to look at investment, Peel Ports has a clear responsibility as the owner. North Ayrshire Council also wants to identify its role and responsibilities. The scale of that will be variable depending on what works are done at Ardrossan. For example, there has been some distressing news in recent times about the Irish berth, which has caused some issues. Part of the work is to look at the different scope of what would be required. You are right to identify that one of the challenges that all parties have been working on is that it is a multi-partner business plan that is currently being developed.
Peel Ports owns the Irish berth as well, and its lack of maintenance is its responsibility. It has not invested in the berth, which is why it is not useable. Can you clarify whether Peel Ports is a willing partner? Will it make a significant contribution towards the capital investment that is needed in Ardrossan harbour or is it dragging its feet on how much it is prepared to invest, with a view to trying to get the taxpayer to meet the full bill?
I know that the deputy convener has a lot of experience; he might reflect that it could be difficult for me to identify publicly some of the challenges. Discussions are on-going. I want to respect that space so that we can have those on-going discussions.
I hope that Peel Ports will play its part in any investment that is needed in the port.
Perhaps between us, deputy convener, we got some positive news out of that. Let us move on to the next question, which comes from Mark Ruskell.
You mentioned the fair fares review earlier, cabinet secretary. The review set out some longer-term options for where we go with concessionary travel and investment. Some short-term measures were identified as well, including a pilot for a cap on bus fares. Is that reflected in the budget? If it is not, what options are there to bring that forward, and when will that happen?
I was keen to have a pilot, but it proved particularly problematic because of last year’s emergency measures. It was very difficult to get financial approval for anything that was new or additional due to the adjustments that had to be made, particularly around the autumn budget. There were other pressures as well.
There are challenges with undertaking pilots. As we know, if you have a pilot then do not continue it, that can cause issues from a passenger perspective.
The bus companies are less than enthusiastic, so—this takes us back to the deputy convener’s point—what leverage we can apply? Currently, there is no provision in the budget for a pilot to cap bus fares, although I would note that the vast majority of the fares in Scotland are under £3.
There is no provision in the current budget for that.
No.
Okay. If you do not introduce a cap on fares, how will you dramatically increase patronage? Everything that we have talked about today leads us to the conclusion that bus services are largely stuck. We cannot take them into public ownership overnight. Concessionary travel is expensive, and it is working to an extent. However, with regard to getting adult fare-paying passengers and working people to travel by bus, I am struggling to see how this budget changes the picture. We seem stuck without something like a fair fares type of cap.
10:00
Reliability is really important, and we are investing in buses to ensure that we have reliability. On the paused funding, we are now releasing funding for bus infrastructure, which is very welcome.
I reflect that Mr Fairlie and I had very good meeting with the Scottish road works commissioner, who will focus on the information that can be provided for buses. There is an increase in the amount of emergency works that are being carried out on bus routes. Clearly, as those are emergencies, they must be dealt with. Utility works are increasing, which causes disruptions. If bus companies know about problems with road works, they can put in place diversions and so on. We are looking at everything that we can do to identify how we can help to make buses more reliable, and I welcome the fact that the commissioner, who has responsibility for looking at such issues, is engaging directly with bus companies, which will be helpful.
On what we can try to do to leverage in funding, I will just reflect on my comments to the deputy convener. There is a significant amount of funding in buses, some of which goes on free travel for the under-22s. That is determined by legislation that is scrutinised by this committee and passed by this Parliament. Making changes—to leverage that into providing more security for more rural routes, for example—will take a significant amount of thought. We are working on that.
Okay.
Thanks, Mark.
We have drifted back on to buses. As I have been particularly hard on Monica Lennon, who wanted to ask a question on buses, I will let her to do before she goes on to her other questions. I am not sure that that was a good segue, but there we go—it is the best that you are getting.
There is lots of interest in buses today, which is not surprising. I bring some good news: the X1 bus between Glasgow and Hamilton has recently been reinstated. When I was on the bus last week, I remembered that I have asked the Government lots of questions before about work to improve journey time and reduce congestion. That is a barrier to people using buses. They think that journeys can take too long.
With that infrastructure commitment, particularly on the M8 in and around Glasgow, when will we see some progress on bus prioritisation? Although my experience was very good and the bus was punctual and swift, we know that improvements must be made so that people have more confidence that they can get around quickly.
I will make two points on that. One is that the bus infrastructure fund will enable work to help with easing congestion. On a recent visit to Dundee, it was quite clear to me what they could do should they get approval for funding. I had a good conversation with McGill’s Buses as well on what that would mean for reliability.
Secondly, in relation to the M8, I am recused from talking about that issue, because I have a constituency interest—the M8 and the M9 go through my constituency. I will maybe ask my officials.
Yes, perhaps your officials could help out.
It is either that or we can come back to you in writing. I had better not talk about that issue.
I will go first and then I will bring in Bettina Sizeland if I need to. I suspect that Ms Lennon is talking about a different part of the M8.
People in Whitburn travel to Glasgow.
Okay. The work around the M8 had to be paused this year for a number of reasons, primarily related to resources. One thing that we will need to talk about with the cabinet secretary is where we should be directing the funding that we have for the next financial year to make the most impact, given all the constraints on which we are working.
Bettina, is there anything that you would add to that?
We are talking to all of our partners about the bus partnership projects that we had previously to identify which ones would be most appropriate for this year’s funding and the coming year’s funding and which ones should be the priorities. It is a live conversation.
It is concerning to hear about some of the constraints around resources, because the strong view is that that needs to be a priority. Maybe we can explore that later. That was just a brief supplementary question, convener.
I will move on to some other questions. Last December, Transport Scotland published research that covered the pros and cons of the national road user charging scheme. The research said that the scheme could achieve a 20 per cent reduction in distance driven at minimal social cost while raising revenue for sustainable alternatives. With that in mind, can you explain why the Scottish Government has ruled out national road user charging schemes?
That research informs our debate, but it is not Government policy. In looking at how we deal with national resourcing for transport, particularly road transport by car, a big issue is how the reserved powers of the UK Government are deployed in relation to fuel duty replacements. It is not just the UK that has to deal with that. Every country will have to identify how it moves from gathering revenue from individuals using carbon travel and what will enable investment in any new system or in any alternatives, such as public transport—which is a very effective measure—in order to reduce car use.
I raised the issue with the then Secretary of State for Transport and the previous ministers for transport in the UK Government, as well as with the current minister, the Minister for Future of Roads. I will certainly raise it with Heidi Alexander, the new Secretary of State for Transport, when I get a chance to meet her.
A UK Parliament committee has identified a big issue. The UK is about to lose £35 billion in fuel duty as sales of carbon cars decrease. This committee will also be involved in the vehicle emissions trading schemes and the zero emission vehicle mandate to reduce the sale of carbon cars and to phase them out.
My strong view is that we should not just leave revenue-raising replacement measures to the Treasury and the issue of how to replace £35 billion of funding for services to the UK Government. I am concerned that that is what will happen. I am constantly being told the issue is being referred to the Treasury. We should probably be looking at it more from how that helps to support the climate change agenda and what that means for road usage more generally.
The issue needs to be dealt with on a UK-wide basis. Last week, I had a very good meeting with Ken Skates, the Cabinet Secretary for Transport and North Wales. At some point, I hope to get that on the agenda with the other ministers in the UK. The decisions will have to be made, so why not do it in a sensible way and try to take a four-nations approach? Of course, the levers in relation to and the decision making on what the replacement for fuel duty should be lie with the UK Government, but we have an interest in the matter and we should keep actively involved in it.
The Scottish Government is committed to a constructive four-nations approach in exploring what the replacement for fuel duty should be. Is it a distance-based charge that you feel is right? Do you have a view? What would you bring into those discussions with the UK Government?
In terms of the scoping of that, I am happy to take advice from the committee. There is a range of things that can be looked at. That can best be done on a four-nations basis. I am not going to prejudice those discussions by speculating.
Every country in the world will have to look at the issue, so how can it best be done? We need to look at not only a budget replacement mechanism. We also need to look at how you replace fuel duty in a way that helps to invest in public transport or whatever.
I want to come on to some Government policy issues. However, it sounds like the discussion is at a very early stage. Does the Scottish Government intend to consult with the public?
I think that the UK Government should. To be fair to the UK Government, it has been in power only since July. I am sure that the issue will be at the top of somebody’s in-tray, particularly of those in the Treasury. I want to make sure that discussions are also informed by transport ministers.
Okay. I just have a couple more questions. I think that the Scottish Government route map was mentioned earlier. There is a bit of frustration that the route map is not yet published in final draft. Will you give an update on that?
Work on the route map has continued. You will be aware that the draft route map was published together with COSLA. We want to do that in partnership with local authorities. As you can imagine, local authorities will have different views. I know from my discussion with Gail Macgregor, the transport lead for COSLA, that she is very supportive. She has to take the route map through the COSLA process.
There has been a delay with regard to when I would have wanted the route map to be published. There are genuine issues. People wanted to see the research that was referred to, for example. Some of those who wanted to see the research were very positive and supportive of what is in the route map, and some of them were not.
We have helped to inform their discussions about that, but, more important, we have shared what our thinking is, and our officials have engaged actively. The ball is probably in COSLA’s court with regard to getting agreement with local authorities on a way forward.
From a national point of view, we know that local authorities are critical in some of these areas. You will recall that this committee’s inquiry in 2021—I think that it was its first inquiry in that year—was on local authorities and their partners delivering net zero. The route map is part of that. We have to respect our colleagues in COSLA and the time that they want to take in looking at that.
However, ultimately, we need to see progress and delivery in order to reduce car kilometres by 20 per cent by the end of the decade. We are midway through the decade. Is good enough progress being made? Are you confident that things are on track?
I do not think that we will be in that position, but I would rather take the advice from the Climate Change Committee. Part of what we are intending to do is to see what it says in relation to that. I think that we would need to make more progress. I do not think that progress is at the level that it needs to be to make the shift. We are making progress, but we need to identify how we best do that.
Again, I come back to the point about having more reliable public transport for people to use. That is the incentive for people to make the shift, as well as availability, which is one of the key areas.
I know that the committee in its wider analysis is looking at how we tackle climate change and emissions. Reducing car use is important in that regard. However, let us put that into perspective. We know that fewer people are travelling by public transport as more of them are working from home. People choosing to not use their car one day out of five working days and using public transport instead is a 20 per cent change. In addition to having national plans, there is something around how we popularise the use of public transport and make it a real responsibility for individuals. We have to make it achievable for people.
I have a final question. You have talked about the importance of reliability and availability. In the earlier exchange, the deputy convener raised some important issues, and I think that you used the umbrella term of transport equity. There is still real disappointment that peak rail fares have been reinstated, and we know that means that many workers are taking a hit. Have you done any analysis on the impact of that and what that could mean to the important aspiration and commitment to reduce car kilometres by 20 per cent?
One of the disappointments of the trial is that it did not lead to the shift in people making the decision to travel by rail that we all wanted to see. There is a challenge in the temporary nature of the trial, although you will remember that the Scottish Government extended it, beyond what the Greens had negotiated, to the autumn, to give it more space and time. The result was a disappointment.
10:15We have replaced the measure with other offers, including changes to the flexipass option. I have written to all members with the options and what that means. I think that we are discussing commuting. Eighty-six per cent of the commuting market can now use a flexipass. It has recently been expanded further to Perth, Stirling and Bathgate, for example. That is helping to provide reductions in costs. In some instances, that is cheaper than the peak fare—this is not always the case, but the cost is in the same ball park. It is still providing a subsidy and much reduced costs to the public sector.
Yes, I am monitoring that. I want to look at it over the piece. I want to see a more settled period, particularly over the autumn, to be able to do the right comparison. I am expecting to have information sometime around spring, I think. That might be an area in which the committee is interested. I would be happy to share that when we have an understanding of people’s behaviour and of the numbers of those returning to rail travel.
I am looking at the convener—I will hand back to you. Thank you.
If you have asked all your questions, Monica, I am happy to move on. Mark Ruskell has a question to ask.
I want to turn to active travel. There was a previous Government target to spend 10 per cent of the transport budget on active travel, but, in this budget, we are quite a way short of that aspiration. Has the target been dropped? If so, is there anything to replace it with? Is there another aspiration, another target or another commitment from the Government?
The Greens brought in the target for that percentage spend on active travel as part of the Bute house agreement, which, as members well know, has ended. Our challenge is how we ensure that we continue the momentum of very welcome investment in active and sustainable travel.
As we wrote to the committee—I think Gillian Martin wrote, with input from me and my transport officials—on 4 December 2024, last year’s budget for active travel had to be scaled back. The active and sustainable travel budget went down to £157 million. As you will have identified, that has increased in this year’s budget, so we are trying to recover from where we were.
We had challenges last year. You will remember that some of the active travel funding went to support the extension of the peak fares removal pilot. Some of it obviously had to be returned to the Government in the spring budget review, and the spring budget figures will identify the extent of that. We are now able to increase active travel funding to about £187 million, which is an increase from what it was last year, but we are not getting back to the targets about which you are talking.
The most important thing is deliverability, and all these schemes can sometimes take longer to deliver than others. We do not want to lose the momentum in the projects that are available to be invested in, which is why I am pleased that, should the budget pass, we will be able to keep the momentum of investment for active and sustainable travel. Local councils are very keen to see this investment.
Yes, the momentum or pipeline is really important. However, we have heard concerns from stakeholders that the active travel infrastructure fund is announced only from one year to the next, and that that lack of a multiyear funding commitment disrupts the pipeline.
That is one of the challenges in the transport budget—full stop; end of story. Most transport projects are not deliverable year to year; they are long term. If we could get a three-year budget from the UK Government in its spending review, that might provide the opportunity for the Scottish Government to have more longevity in its funding. If that were realisable, it would benefit our portfolio, in particular, and it would benefit lots of other areas, too.
You would look to provide more certainty if you had certainty from the Westminster Government, particularly for active travel. Is that what I am hearing?
The answer is “if”. It is important because, when you get that momentum—or pipeline, which I think you referred to it as—people develop expertise. We have had a change whereby it is now regional transport partnerships that take a big part of the responsibility for many projects, although individual councils can apply as well. It is important to keep the experience and expertise; that provides value for money in and of itself. There is something around keeping the pipeline and momentum, which is what we want to do.
Do we want to make multiyear commitments? Yes, that would be desirable. However, we are not currently able to do that. Instead, we have yearly budgets that we have to report to the Parliament on.
I have one further question if there is time, convener.
If it is a brief one, that is fine.
There has been a welcome increase in the road safety budget this year. I want to understand which particular projects will be focused on for local authorities to bid into. I am interested in certainty in investment from that fund for 20 mph zones and some other work that might happen at local council level but is nationwide.
There is an increase in road safety investment. Even this year, it was at a record level, but we have managed to increase it again in the 2025-26 budget. A significant amount of the investment is for road safety work by local authorities. There is already a road safety improvement fund, which continues; it allows local authorities to identify support. Junctions, in particular, can be an issue. Individual councils can bid into that, including for road safety work related to 20 mph zones; councils are also allowed to use local authority transport grants for that work.
Some local authorities are moving swiftly ahead with the roll-out of 20 mph zones. Scottish Borders Council is an interesting example that is already seeing the benefits of the roll-out. As more councils deploy 20 mph zones in key areas, the investment to support that is reflected in the road safety budget, as well as in local authority grants.
Good morning, cabinet secretary. You said earlier that the 2025-26 budget includes £158.6 million for the train fleet. I have an interest in the inter7city services, particularly when it comes to Aberdeen. You have indicated previously in answer to me and other members that diesel trains will operate on those routes until 2035 or even 2040. The high-speed trains, although immensely popular with the public, are quite old; they are not so popular with the drivers and engineers who have to maintain them. When will the HSTs be replaced on the inter7city routes? Will part of the £158.6 million be used to procure the replacements?
We are in the process of procurement for replacing the HSTs, which I announced to the committee at my previous appearance, I think. That is live and current. We will make the decision on that, and the funding that you have identified will support it.
You capture the challenges well. I am keen that my officials work with the rail unions on what the replacements will look like. I have had regular discussions with the unions on what their requirement is.
Whatever fleet is procured, we will certainly see reductions in carbon emissions. That is what is required. It is quite clear that we need to de-risk in terms of where we need to get to by 2045 to meet the overall national targets for carbon emissions. Rail will contribute to that, and 75 per cent of journeys by rail are already decarbonised.
In addition to the work on HSTs—Kevin Stewart’s particular interest being those that serve the north-east—and the other intercity routes, work is progressing on the suburban fleet replacement.
I am conscious of time so I will perhaps just identify the fact that part of our budget helps with the rail infrastructure to assist with the Fife and the Borders decarbonisation projects. There is substantial investment in feeder stations in Thornton in Fife and in Portobello, and we are investing in another feeder station, too. The Haymarket to Dalmeny work has already started, which will help with the decarbonisation of the railway in Fife. I know that that is not Kevin Stewart’s constituency area, but I am giving you an overview of the investment in progressing decarbonisation.
You have been open and transparent about the slippage around phasing out diesel. Would it be easier for you, your officials and for those working in rail if we had a multiyear spending review for the planning of decarbonisation across the rail network?
Decarbonisation is a long-term project. It is not even a three-year timescale; it involves a longer time period. Kerry Twyman might want to comment on how, over the piece, the Scottish Government manages an annual transport budget—obviously, we get annual allocations—when a lot of what we have to consider concerns big-budget issues that must be dealt with over not only the next three years, but the coming five or ten years.
Yes, I can have a go at that—Alison Irvine may want to come in, too.
Transport is pretty much in the best-practice space in that regard. We have the strategic transport projects review and now STPR2. Those reviews are the start of the process in which you identify your hierarchy for the long term and the projects that you want to proceed with and then map that process out. We feed all of that into the Scottish Government. I know that colleagues in health, justice, education and other areas are also doing long-term planning, and there is a lot of work going on at the centre looking at all that and bringing it together. Ironically, as we speak, our executive team is meeting to consider how we get ahead of the game on the multiyear planning while we await the announcement of the UK Government’s plans. We are optimistic about the possibility that we might get three-year capital plans, but I think that, at the moment, we are hearing that it will be less than that, which is a bit of a disappointment. In light of that, we need to handle the uncertainty, which means that we need to build flexibility into our programmes and our thinking.
That is very much what we have been doing on rail, for example. We need to ensure that we have viable fleets, so we are engaged in advance planning but being as flexible as possible. We are putting forward our plans to the centre and being very clear about what the absolute bare minimum is to keep everything safe and reliable, but we are retaining that ability to move very quickly if we receive funding. That is what we did when the UK Government budget was announced in October and we saw a small and welcome uplift to capital funding: we were able to deploy that quickly for next year in order to get value for money to the taxpayer.
Compared with the timescales that our EU partners use, three-year funding is a minuscule timescale. At some point, the UK Treasury will adopt the practice that is used elsewhere, where there are funding announcements that cover decades.
I will move on. There is opportunity within transport for further decarbonisation. At the outset of this meeting, you talked about EV charging points, but in Scotland we have only three hydrogen refuelling stations, two of which are in Aberdeen. There are opportunities for hydrogen not only in road transportation but also in other areas including rail and maritime.
Cabinet secretary, in your liaison with colleagues to use budgets as best as possible, what are you doing to ensure that our transport system benefits from Scotland’s immense capacity for the production of hydrogen?
I will approach the issue from two directions. Colleagues who remember when I was a member of the committee will know of my personal interest in hydrogen and its potential in relation to the wider energy mix of Scotland, our exports and demand from mainland Europe and Germany in particular.
On what can be done for Scotland, there is long-term potential around green hydrogen and how it can be deployed, particularly for the transportation of heavy goods, including maritime transport, in relation to which I think that it will be used at some point. Obviously, we are not in the lead on those areas but having the capacity for refuelling will be essential. That is why deep water ports are increasingly important from a global point of view. What is unfortunately happening with the polar ice cap will open up routes that previously were not there. In the long term, we are looking at 30-year cycles particularly for freight, which is relevant with regard to our moving into the hydrogen area. Might Scotland be well placed to take advantage of that, particularly with regard to the routes, but also with regard to the manufacturing of green hydrogen? How might that manufacturing capability be deployed in particular parts of the country? For example, might the north-east of Scotland be extremely well placed to take advantage of the opportunities?
10:30I have taken interest in the development of hydrogen for rail and keep apprised of that. It might be used in some far north lines, for example, or lines that do not yet exist.
I want to see the use of green hydrogen in that vision of where the country could get to. I will not say that that is happening any time soon, but we should be exploring that. I am open to the issue and I engage with colleagues in the energy sector who deal more with hydrogen.
In the short term, we established a truck task force that looked at how we could map provision for a decarbonised approach to heavy goods vehicle transport, working with the sector—obviously, it is a commercially competitive sector, so there are issues around sharing data about where the optimum routes would be. The UK is interested in that work and would like to see it explored further. That task force also identified the potential for hydrogen fuelling as well as for electric power. That was a more immediate piece of work that has already reported. The work was done with Heriot-Watt University, and I am continuing to take an active interest in it.
It is good to see the future proofing of some investment. The port of Aberdeen has future proofed to ensure that it will be easy to put in hydrogen infrastructure in the new south harbour. As I said earlier, we have only three hydrogen refuelling stations in Scotland. Sometimes, permissions around such infrastructure are difficult to obtain. Obviously, there has been a push for the UK Government to change hydrogen transportation and storage regulations, and I am sure that you will continue to push for that. However, is there a way that we in Scotland can make it easier for folk to get permission to, for example, deploy joint hydrogen and EV charging stations throughout the country, so that we can maximise the benefits? In my city, Aberdeen, the presence of those two recharging stations has enabled us to make moves with regard to getting buses and local authority vehicles to use hydrogen to a greater extent than elsewhere in the country.
Cabinet secretary, could you focus on the budget aspects of that rather than the policy and the guidelines? We are really meant to be concentrating on the finance.
Yes. In the transport innovation space, I am not sure whether the Aberdeen bid has any joint application for EVIF funding in relation to hydrogen, but I do not think so.
Kevin Stewart makes a good point around perspective. I do not know how I can tie that back to our budget provision, but I will look into the point about permissions and so on in relation to what the challenges are. When I was still a member of the committee, before I became the Cabinet Secretary for Transport, we visited the hydrogen fuelling station and I was interested in the work that has been taking place in Aberdeen. However, I think that I will need to come back to the committee with regard to what strategic work has been done in that area.
What would be interesting for me and probably for others is information about the melding of budgets across portfolios to make sure that we are advancing those possibilities when it comes to innovation.
I hear what you say.
We have a couple of follow-ups on this, first from Douglas Lumsden and then from the deputy convener.
In 2016, the Scottish Government pledged £200 million to reduce the average journey times between Aberdeen and the central belt by 20 minutes by 2026. Will that still happen? When I look at the budget, there does not seem to be the necessary money there.
The work that is being done, particularly in the Aberdeen area, continues to develop the scope of that £200 million investment in enhancements. The options selection process for the project concluded in 2023. The final package selected comprises signal enhancements, improvements to station layouts at Dundee, Aberdeen, Arbroath and Montrose, and specific capacity alternations including freight loops to facilitate the mixed operation of faster and slower trains on the same route.
On the challenges, you referred to a position in 2016. For a variety of reasons that I have relayed, involving the Scottish Government’s overall financial challenge, particularly with the capital reductions from the previous UK Government, some of the realisation of those rail investments will not have been made at the speed that we would have liked. However, as I said, that is the most up-to-date position that I can reflect on.
Can you give us a new timetable for when the 20-minute reduction will be met?
Part of the work on that selection process will help identify what time reductions would be provided. On the update about the implications for journey times, we have already seen some improvement as a result of some of the investment that has taken place, but I will be able to come back to the committee in writing if there is anything additional to what I have set out to you in my answer.
However, it is quite clear that the 2026 deadline will not be met.
There are improvements and changes. We have talked about the fleet replacement, which is important in terms of that north-east investment. We have talked about the selection process, which has concluded and has identified improvements there. However, on project timelines, I think that it was said in January 2024 that the timescale for the delivery of the commitment to deliver journey time improvements and increase capacity between Aberdeen and the central belt was under review. The position is the same as it was a year ago, so it is not a new reflection that there are challenges in the timescales. That was reflected to the committee in 2024. I cannot remember whether you were a member of this committee a year ago, so I apologise if that is news to you.
I am just looking for the openness and transparency that Kevin Stewart mentioned. The people of the north-east just want some transparency on whether it will still be delivered and on what timescale, and I do not think that we are getting that at all.
I do not think that you have got that, Douglas, but, anyway, we will move to Michael Matheson, who will be followed by Mark Ruskell.
I want to go back to the HST replacement programme. Does that involve refurbishment or new stock?
It has been an open procurement. Whatever happens, there will be reduced emissions—that is a priority for us. However, as said, and as I relayed to the committee when we announced the procurement—obviously, ScotRail made the formal statement—it has been an open procurement, and we will have to identify what comes back from that.
So, it could be brand new rolling stock, or it could be refurbished rolling stock.
We need to determine what the market can deliver, and then identify how to get best value.
It could be one way or the other, or a combination.
Let us see what the market comes back with.
Okay, and will the existing HST rolling stock remain in place until the replacement is ready to be rolled out?
Obviously, we need to continue the services, so we would want to continue using the stock until such time as it is replaced.
Yes. The reason why I am asking that is because of the pain that there was in the introduction of the HST programme because of the delay in the refurbishment programme, which meant there was a reduced service on a lot of routes. What I am getting to is, given the history of the introduction of HSTs when I was transport secretary—the issue was not with us but with the refurbishment company, which was unable to deliver on time—I would like some reassurance that the existing HST rolling stock will not be withdrawn until the replacement rolling stock is ready for introduction, in order to prevent any reduction in the service provision.
I hear what you say. All lessons will be learned and your advice is much appreciated.
Okay, thank you.
I want to go back to concessionary travel. Obviously, the under-22s scheme has been hugely successful. I think that the majority of people getting on the bus on my own rural bus route are under 22 and are probably making journeys that they would not be making unless they had the card. However, it is a big investment in private companies—I am just looking at the reimbursement rates. For the older and disabled persons scheme, the rate is about 55 per cent of an adult fare; for the young persons scheme, it is 81 per cent of an adult fare.
Private bus companies are carrying passengers—young people—who probably otherwise would not be travelling, yet they are getting 81 per cent of an adult fare paid to them. Given the amount of money that we are spending on both concessionary travel schemes, which is substantial, that feels almost like profiteering by the bus companies. It does not feel like a reimbursement; it feels like quite a hefty subsidy is being paid to the private companies to carry passengers who otherwise would not be travelling.
The rates for reimbursement for concessionary travel are subject to negotiation with the Confederation of Passenger Transport and industry representatives, and they are agreed annually. To make changes to the reimbursement rates, amendments to secondary legislation are required annually—I think that there is a Scottish statutory instrument due to be laid in the Parliament on 27 January; I hope that I am correct about that—which this committee will obviously scrutinise. Part of the process is the negotiation of the rates, and, with the young persons scheme being a fairly new scheme, our experience of that scheme will obviously inform the level of reimbursement. That negotiation is happening now, and you can take a view as to whether that is appropriate.
The benefits of increased patronage and the increasing number of people using the buses are a behaviour change among our young people, who will continue to use the bus—that is the intention—and, I suspect, the fact that they are keeping some routes going. Many operators have reflected that the concession scheme has helped to support the bus industry, which was in a very difficult position during the pandemic, so it has been very welcome.
The issue with adjusting the reimbursement is that, if the bus companies say, “If you reduce the amount that you are investing, we will have to reduce our services,” that compounds the problem that Monica Lennon set out around the vulnerability of routes and weekend services in some areas. It is not an easy task to negotiate a level of reimbursement that the bus companies see as fair, meaning they will not reduce services, but that also provides value for the public purse. We are obviously learning lessons from the young persons scheme in particular.
Yes, but surely the principle is that there must be no detriment and the scheme should not result in profiteering—profit making—by the companies. Although the scheme is encouraging more people to use the bus, it should not cost them. I just do not see how a rate of 81 per cent really ensures that.
The committee is going to look at the SSI, because it will have to come forward and present the actual figures. You have given the cabinet secretary fair warning of some of the questions that the committee will be asking.
The SSI is also constrained by the current legislation.
Okay—I will end on the words “no detriment”.
We will definitely get a second bite of this apple.
Douglas Lumsden has a brief question, and then I will ask a couple to finish, unless any other committee members have any.
I want to go back to the subject that the deputy convener raised about the buses that we are helping to subsidise that are coming from China. You mentioned the difficulties resulting from state subsidy rules, but are there other ways that we can do it? Electricity production in China is mostly from coal, so it almost seems that our path to net zero is being fuelled by Chinese electricity that is being produced from coal. Are there any other ways in which we can potentially do it, such as by looking at purchasing only from countries that have moved to net zero energy production?
That is an interesting proposition. When I was on the economy committee, we looked at how we measure carbon miles, and that would obviously need to be done. Such issues are live and current. There would need to be reciprocal international agreements and so on, and we could see the EU collectively moving more quickly in that area than Germany. If you have defensive procurement, which some countries are alive to and considering as we speak, there are knock-on consequences. For every action, there is an equal and opposite reaction, which tends to be in imports and exports.
I understand that you have the UK minister coming to give evidence to you, and that may be an appropriate question to ask them.
You do not see a way of trying to restrict our purchasing from countries that use coal as their primary source of energy.
In a carbon market, there is an issue around how we can try to reduce climate change emissions. Even if we wanted to do that, the question is whether Scotland would have the powers to do that under the current devolved Administration arrangements. Even on a UK basis, could that be done in a way that would not be to our detriment through unintended consequences and retaliatory action? That is the international issue of markets in relation to imports, exports, tariffs and so on.
I think that it is going to become an increasingly live issue if the world collectively gets serious about what it is doing to reduce emissions.
10:45
I have a couple of quick questions on the replacement of high-speed trains in 2035, which you are budgeting for. One of the key lessons that we learned from the Edinburgh to Glasgow improvement plan was that a huge amount of work needs to be done on the rail infrastructure. We decided to go with electric power, but a lot of the bridges did not take the electric cables that went under them. Once you have identified how the new trains are going to be powered, when will you start the infrastructure improvements, to make sure that, when the replacements come in, which is barely 10 years away, everything will be ready? There is a massive amount of work to be done.
I have made it clear that the 2035 target for electrification and decarbonisation of the railway will not be met but that the target of 2045 will be met. Depending on what type of fleet replacement we have, that procurement will allow us to determine exactly what you are asking about and to spread the investment. The industry has told us that it would prefer to have a pipeline of investment.
Those of us who lived through the EGIP project will know that the disruption for regular rail commuters is substantial, and we see that at the moment in East Kilbride. A major electrification and enhancement project is currently taking place in East Kilbride and the line will be closed for a substantial amount of time. It will benefit everybody once it is done, but we have to plan for it. We are alive to the need to spread the investment and the disruption over a period and, depending on the procurement level, to de-risk it from being as disruptive as it might otherwise be. That is why the 2045 target makes more sense than the 2035 target.
Yes, but if electric trains came in in 2035, they could not run on the infrastructure that is there at the moment. Even if you have a pipeline of trains and run some on electricity, some on diesel and some on hydrogen—as Kevin Stewart suggested—the improvements that are needed to the infrastructure will probably have to start in less than five years’ time.
There are different options, including electric trains with a better battery, that would allow some decarbonisation when we do not have full electrification. Across Scotland, that is exactly the territory that our officials are exploring.
I think that we need a lot more clarity, so that people can understand what effect it will have on the service for those who use the train from Aberdeen or Inverness down to—
It is not just about that line. We are looking at what the roll-out might look like on the suburban lines, too. There might be a different combination of trains at various times. We want a pipeline of work, so that the industry can keep the trains running. Once we know what we are procuring for the suburban lines and for the HST fleet replacement, that is exactly what we intend to happen. You are right about the need for clarity around what the disruption will look like, but I am sure that the deployment will be very much welcomed by everybody.
I have a very simple question for you. You have probably given us the answer before, but I may have missed it. The MV Alfred is costing £15 million for this session of rent. It is not being rented again, is it?
I am not sure what has been communicated to the committee about the timeframe for that, so I will check. If we need to update—
So far, we have spent £30 million on it, have we not? If we are going to rent it for another session, that will cost another £15 million.
We obviously need reliability and resilience in the fleet. We know that, and that is what we are providing. We are also very keen to have a spare vessel for deployment when there are—
I understand that. I am just asking whether there is £15 million in the budget to rent the vessel for the third year running.
We have increased funding in the ferries line for a variety of reasons.
Have you specifically earmarked £15 million for that?
If there is a requirement for it, it will be able to be funded, but we have reported to the committee when that lease—that rent—will end. If that is not the case, I will come back to the committee on it.
Lastly, there has been some keenness to shift from road to rail, and I think that you are in discussions with industry about its proposal for “48 tonnes for 48 miles”, which would allow containers to be taken from trains directly to distribution points. Part of that process was something that I have written to you about—the modal shift revenue support scheme, which was in place but was then cut. Has that been reinstated? I know that it was only £750,000-odd a year, but it made an enormous difference to getting vehicles off the road. Have you got it back in the budget?
The modal shift revenue support scheme is not in the budget, but the freight facilities grant is. The freight facilities grant is a larger amount—about £4 million, I think, but I can be corrected—that is for modal shift from road to rail and, potentially, to water as well. It is a bigger amount.
Will it achieve the same as the modal shift revenue support scheme?
Alison Irvine can reflect on the amounts in capital and in revenue.
The two schemes did slightly different things. There is no revenue funding for the one that the cabinet secretary is referring to. The freight facilities grant, to which the cabinet secretary is referring, is infrastructure related and provides support, where appropriate, to improve infrastructure in order to encourage the transfer from road to other modes of transport.
The modal shift revenue support scheme was to make the renting of cargo trains easier, was it not?
Kerry Twyman might remember. I cannot remember the last time that we had that in our budget.
It was about 18 months ago—it was cut halfway through the year with no reason given.
The freight facilities grant is a bigger amount. When I have been talking to industry—
But it does a different job.
I know from talking to the industry what it is keen on doing, and there are particular areas that the grant would benefit.
We must be talking to different industries, then, because it has asked me about the modal shift revenue support scheme, which stopped freight being moved on railways as much as it had been in the past.
A lot of companies benefited from the modal shift revenue support scheme—companies that make good profits and want to reduce their carbon emissions. Public funding to subsidise companies can help to kick-start that shift; it is a question of the balance of investment, and capital investment provides permanency. However, I know that there is interest in that scheme. When I spoke at a recent conference in Grangemouth about connectivity to the port there, that was a particular area of interest, as that is an example of where such funding could be used. I am not saying that it would be, but that is an example of where the industry needs it, and I was being lobbied very hard for the reinstatement of that funding.
I look forward to seeing your detailed response to my letter on that, which was sent to you earlier this year.
I think that those are all the questions that we have for you, cabinet secretary. I thank you and your officials for the evidence that you have given this morning.
I ask the committee to reconvene at 11:00, prior to the next evidence session.
10:53 Meeting suspended.Air adhart
Great British Energy Bill