Free Bus Travel Deal Secured
Building on an agreement reached in January 2013, Transport Scotland and Scotland’s bus industry have agreed terms for reimbursing operators for providing concessionary travel from April 2015.
The new deal reflects expected growth in demand, fares and costs, and falling fuel prices.
Transport Minister Derek Mackay said:
"Concessionary travel is a key part of the Scottish Government’s social wage and makes a real difference to many of the 1.2 million national entitlement card holders, including our elderly and disabled.
“Research shows the National Concessionary Travel Scheme is greatly valued by users. Card holders themselves say it helps them financially, gives them a greater sense of independence, reduces feelings of isolation and gives them more confidence in their own ability to travel.
"The £250 million we provide every year for the bus industry is not only helping the industry provide services and invest in new greener fleets, but also benefits concessionary travel scheme users by an average of around £250 every year.
"The latest reimbursement terms are based on a formula agreed with the industry in 2013. They will help provide stability for the industry, with recent energy forecasts also taken into account to help manage the costs of the scheme - welcome news for taxpayers.”
The current reimbursement rate is 58.1% of the adult single fare, with a budget of £192 million.
Based on the agreed formula and recent authoritative forecasts on industry costs and consumer prices, and following technical discussions and agreement with the Confederation of Passenger Transport (CPT), the new rates will be 57.1% in 2015/16 and 56.9% in 2016/17. The budgets for each year will be £202 million and £212 million respectively.
George Mair, Director of CPT Scotland, said:
“Today’s agreement signifies the end of a thorough and fact-based look at National Concessionary Travel Scheme reimbursement which should ensure that the budgets for the next two years more closely mirror actual costs.
"This gives bus operators a welcome degree of certainty and signifies a pathway for future such discussions.
"We thank Transport Scotland for its constructive and positive approach throughout this process.”
1. The deal provides for increases in budget to reflect expected growth in passenger numbers and fares.
2. Research published in 2013 and 2014 shows Scotland’s National Concessionary Travel Scheme is greatly valued and works well for card holders for a number of reasons including financial savings, reducing isolation, engendering a sense of greater independence and increasing confidence in their own ability to travel. It also highlights how cardholders see the scheme as having improved their mental and physical well-being. In the words of one user “…I feel good that I live in a country that has this scheme.”
3. In line with EU state aid rules, the reimbursement arrangements for operators must leave them no better or worse off as a result of participation in the National Concessionary Travel (NCT) scheme.
4. The latest terms have been calculated based on an economic model based on independent research and analysis carried out in 2012-13 with the engagement of CPT.
5. Transport Scotland also continues to provide £50m a year to operators through the Bus Service Operators Grant to keep fares affordable and support services which might not otherwise be commercially viable. Payments are based on distance travelled, favouring the longer services which tend to be particularly important in rural areas.