Ferry fares

The RET system of fares is in place across the CHFS network for passengers, cars, coaches and small (under 6 metres long) commercial vehicles. A different fares structure remains in place for the Northern Isles.

A key aim of RET was to allow ferry users to pay a fixed element plus a rate per mile travelled, which is linked to the cost of the equivalent journey length by road in a private vehicle. RET also resolved many previous issues of complexity in the fares offering and fare-inconsistency across routes, within the CHFS network.

The 3 key principles of RET are:

• Simplicity and transparency - the basis for fares must have an established rationale and simple for a user to understand.
• Comparability and consistency - the basis for fares should be the same for each community. 
• Public sector affordability versus community sustainability - fare-setting needs to balance the different requirements of public sector affordability with sustaining communities.

Introducing different levels of fares such as ‘islander fares’ on CHFS routes, could increase overall fare revenue and keep services more affordable for islanders.  It could also allow use of different fare types to tackle overcrowding of vehicle-deck capacity, on busier sailings through the year. 

Responses to Question 16 by respondent type are set out in Table 16 below.

Table 16: Responses to Question 16 by respondent type

Respondent	Agree	Disagree	Total
Community Council, Development Trust or Transport Forum	6	3	9
Energy related business or group	2	0	2
Ferry Board, Committee or Group	1	4	5
Local Authority, RTP or CPP	3	4	7
Port or harbour authority	1	0	1
Public Body	3	0	3
Third sector or campaign group	1	1	2
Tourism organisation or business	3	1	4
Trade Union	1	0	1
Other private sector business or group	2	1	3
Total organisations	23	14	37
% of organisations	62%	38%	100%
Individuals	83	41	124
% of individuals	67%	33%	100%
All respondents	106	55	161
% of all respondents	66%	34%	100%

A majority of respondents – 66% of those answering the question – agreed with retaining the current RET principles set out as the basis of a ferry fares structure.

Around 125 respondents made a comment at Question 16. It should be noted that some respondents who disagreed at the closed question went on to reference the potential to introduce different levels of fares, for example calling for RET fares to be available only for island residents. The analysis at this question focuses on the RET principles set out in the consultation paper: points on creation of different levels of fares for different types of user or using fares to tackle congestion are considered in the analysis at Questions 17 and 19.

Overall views on RET

The most frequently made comment at this question – largely by respondents who agreed at the closed question, but also some who disagreed – was that RET fares should be retained. The importance of affordable fares for island residents was often highlighted, with reasons that low fares are so important including low incomes and limited opportunities to increase earnings on islands and centralisation of services that require travel to the mainland. Some respondents suggested that fares for island residents could be reduced further.

Problems seen as arising from RET fares were also referenced – with cheaper fares creating higher demand for transport of private vehicles. Issues resulting from increased demand included capacity constraints on some routes leading to a poorer service for residents who need to travel at short notice, and delays to island supply chains as well as potential loss of business for island shops if it is cheaper for residents to go to the mainland to shop. Busier roads on islands were also reported, with one consequence being pressure on local authority budgets for road maintenance and parking infrastructure.

However, a small number of respondents cited the ‘Evaluation of Road Equivalent Tariff on the Clyde and Hebridean Network’ carried out for Transport Scotland as having found that RET fares had increased visitor spending and extended the tourist season on most islands, and argued that any negative impacts of RET fares are not the result of the policy per se but of the failure to renew the ferry fleet to respond to increased demand. A Tourism organisation or business respondent suggested that the economic benefit of RET to island economies cannot be underestimated.

Three local authority respondents argued that, as pressures will vary between routes, there should be a flexible approach to fares, rather than any one-size-fits-all solution.

The current RET principles

In terms of the three current principles, there was broad support from some respondents, albeit in some cases also with suggestions for additions or modifications to the scheme as currently operated. There were also general comments that fares for islanders should not increase as a result of any changes made and that any potential changes should be considered carefully and subject to wide consultation to ensure they do not have negative impacts on island communities.

A very few respondents objected to RET fares in principle, because they encourage travel with private vehicles.

Simplicity and transparency

Few respondents commented specifically on the principle regarding simplicity and transparency although it was suggested that initiatives to standardise and simplify fare structures would be welcome, and that opportunities to make the pricing formula more transparent could help to ensure that island communities are treated fairly.

Comparability and consistency

With respect to comparability and consistency, there were views that RET fares should be applied to all routes, notably with respect to the Northern Isles where both residents and visitors currently face higher travel costs. A private sector business or group respondent expressed concern that there is nothing in the Strategic Assessment Paper referencing extension of RET to the Northern Isles, while a local authority respondent argued that the current application of RET fares only to west coast routes is divisive.

Comments specific to Orkney included that the Scottish Government should continue relevant discussions with the UK Government under the Subsidy Control Act 2022 and that, if RET is not extended, residents should be provided with alternatives such as vouchers. It was suggested that there is a risk that, rather than making a long ferry crossing from Aberdeen, passengers could be encouraged to drive to Scrabster to use the shorter crossing, undermining targets for reduction of road miles.

With respect to Shetland, a joint local authority and regional transport partnership response referenced a modified RET structure that is in place but argued that, because of the very long distances involved, travellers to Shetland still face the highest fares in Scotland and a requirement for onboard overnight accommodation that is not helped by RET principles. Reviewing and updating the RET formula to reflect the specific circumstances of the Shetland Islands was requested.

Other suggestions for extension of RET fares included that they should be applied to:

• Council-run ferries.
• Ferries to Dunoon and Kilcreggan and more broadly to peninsula access, in view of the lifeline nature of ferry services to these areas.

Support from the Ferries Special Grant for introduction of a form of RET to reduce fares on the Knoydart route was noted as a good example of Government/ Council/ community co-operation that might provide a model to apply elsewhere.

A small number of respondents highlighted specific routes where RET fares do apply but where current RET pricing is felt to have delivered fewer benefits for residents than elsewhere, including on routes to Coll, Colonsay and Jura. There was also a view that, in some places, RET fares have provided only minimal reductions for residents when compared to the books of discounted tickets or discounted season tickets that have been discontinued.

Public sector affordability versus community sustainability

Most respondents who commented on the third principle emphasised the importance of community sustainability or argued that affordability for residents – and hence community sustainability – should be of greater importance than public sector affordability. It was also suggested that CalMac’s operating costs should be reduced before any increases to RET fares are considered.

Extending RET fares to freight traffic

There were calls to extend RET fares to freight and other commercial traffic since hauliers pass higher fare costs on to islanders adding to the cost of living. For example it was reported that freight costs to Colonsay are such that it is cheaper to take a vehicle to the mainland every few weeks to collect goods than to have them shipped by a third party carrier, and that freight costs greatly add to the cost of development on the island. One respondent commented on the current situation whereby commercial vehicles are not eligible for RET fares, but visitors’ motorhomes of comparable size are.

Responses to Question 17 by respondent type are set out in Table 17 below.

Table 17: Responses to Question 17 by respondent type

Respondent	Agree	Disagree	Total
Community Council, Development Trust or Transport Forum	7	0	7
Energy related business or group	3	1	4
Ferry Board, Committee or Group	0	5	5
Local Authority, RTP or CPP	3	3	6
Port or harbour authority	1	0	1
Public Body	2	0	2
Third sector or campaign group	2	1	3
Tourism organisation or business	1	3	4
Trade Union	0	1	1
Other private sector business or group	2	1	3
Total organisations	21	15	36
% of organisations	58%	42%	100%
Individuals	101	27	128
% of individuals	79%	21%	100%
All respondents	122	42	164
% of all respondents	74%	26%	100%

A majority of respondents – 74% of those answering the question – agreed with the option to create different levels of fares for different types of users, such as island and non-island residents. Individuals were more likely to agree than organisations, at 79% and 58% respectively.

Around 125 respondents made a comment at Question 17, although the analysis below also covers some points raised at Question 16. One general point was a request for clarification whether the proposed ‘Islander Fare’ would be discounted from the existing RET fare or whether the existing RET fare would be retained for islanders while other categories of traveller are charged more? It was also argued that introduction of different levels of fares for different types of users would require significant consultation before developing proposals or implementation. Agreement on the conditions, operation and management of the system would have to be agreed with all stakeholders and be consistent across the ferry services.

Benefits associated with Islander fares

Among respondents who supported different levels of fares for different types of user, the most frequent comments related to the possibility of an island resident fare, with reasons for supporting this option including the low wages and high cost of living on islands, and the lifeline nature of the service for local residents who have no choice but to use ferries, often making multiple journeys throughout the year. It was also seen as supporting Scottish Government policy to encourage people to live and work on the islands and a joint local authority and transport partnership response suggested that a flat rate fare for island residents – regardless of the location or length of the crossing – should be considered.

In contrast it was argued that using the ferry service is a choice for visitors who will generally make only one return journey and can probably afford to pay more. However, there were suggestions that fares for visitors must remain affordable to ensure the tourism economy is not damaged.

As well as a financial benefit to islanders, it was suggested that different fare types could make it easier to review capacity and demand data for different user groups.

Eligibility

With respect to who should be entitled to islander fares, small numbers of respondents in each case suggested:

• Permanent residents.
• Local businesses and local couriers.
• All island freight.
• All foot passengers.
• Visitor EV or hybrid vehicles, for an initial period.

Problems associated with differential fares

Among respondents who did not support different levels of fares for different types of user, the most frequent comments were that such an approach would:

• Be unfair or divisive, and that public transport should be equally accessible for everyone.
• Be difficult to define, complicated to enforce or open to abuse.
• Risk deterring visitors and causing harm to the local economy, including a risk of increased costs for services and deliveries.

Approximately equal numbers of respondents made each of these points.

It was also argued that, rather than looking to modify fare structures to reduce demand, there should be greater work to address lack of capacity.

Definitions

Determining who should be eligible for islander fares was seen as problematic. It was noted that some visitors will have strong island connections – for example coming home to see family who are island residents, or being second homeowners who are from the island and retain the family home while working on the mainland. There was concern that it will be difficult to define eligibility without being discriminatory.

Value of tourism and business travel to island economies

With respect to the potential for increased fares for non-island residents, the importance of tourism to island economies was noted, with references to negative impacts on the sector arising from the Covid pandemic, rising energy prices, difficulties in recruiting staff, disruption to ferry services and the prospect of a Visitor Levy being charged in the near future. Illustrating the impacts of such pressures, a public body respondent reported that their latest Business Panel Survey had found that 51% of tourism businesses have seen their profits margins decrease, while 46% indicated that ‘surviving current financial challenges’ was their top priority in the short term.

Positive impacts that RET fares have been found to have on business travel, business-to-business interaction, business formation and competition were also noted and it was argued that any steps which would add to cost pressures on island businesses should be avoided.

Potential alternative approaches

Some respondents highlighted potential alternatives to different fares for different types of user, with a frequent user scheme the most frequent suggestion, either as a season ticket or books of discounted tickets. It was noted that this could benefit both residents and tradespeople making regular journeys and could avoid any discrimination based on where someone lives.

Other suggestions included applying a surcharge to non-resident motorhomes during peak periods, and that different solutions may be appropriate for different routes.

It was also suggested that further research is needed to understand the impacts of potential fare increases for non-islanders and that this could include revisiting the findings of previous RET evaluations as well as additional data gathering and fare modelling exercises. More detailed information on the split between islanders and visitors using each route, and a breakdown of various categories of vehicles including LGVs and motorhomes could help to improve understanding of the extent of current capacity constraints.

Under 22s

The draft ICP suggests that foot passenger travel should become free for residents who are under 22 within the Outer Hebrides, Orkney, and Shetland Island groups. There was support for this position but also calls for such a concession to be extended to cover travel between all islands and the mainland and for ferries to provide the same access to free travel for those aged under 22 as is currently available on bus services.

A local authority respondent calling for parity with bus travel noted that, for residents of islands and peninsulas, ferries are effectively bus routes, and that benefits of equivalence with bus travel would be particularly significant where the ferry provides the link to the local town, as is the case for islands such as Raasay and the Small Isles and for Knoydart.

From an economic perspective, it was suggested that free U22 ferry travel would encourage more young people to stay and work in island communities, potentially in the tourism and hospitality sector. It could also allow islanders studying at mainland colleges and universities to return to the islands to work at weekends. Making it easier for young people from the islands to make more visits home could also help to maintain their island connection, such that they are more likely to return to live and work there after finishing their studies.

There was a further request for free U22 air travel when the air service is part of the lifeline service to an island’s nearest local centre – for example within the Orkney Islands.

Responses to Question 18 for all respondents are set out in Chart 1 below, with a full breakdown by respondent type in Annex 2.

Respondents were free to choose as many options as they wished at Question 18, so percentages are given in relation to the number of respondents who chose at least one of the seven options given.

Overall, 90% of respondents chose ‘Permanent residents’ (almost all of those who made a choice other than ‘None’), with 81% supporting eligibility for ‘Island residents who are currently students and living at mainland addresses during term-time’. There were lower levels of support for ‘People who work but do not live on islands’ and ‘Service providers’ at 54% and 52% respectively, followed by 29% support for ‘nominated friends and family’ and only 8% in favour of islander fares being available to second homeowners.

All those respondents who selected ‘None’ at Question 18 had disagreed with the concept of different levels of fares set out at Question 17. A small number of others who disagreed at Question 17, selected all the possible options at Question 18.

Responses to Question 19 by respondent type are set out in Table 18 below

Table 18: Responses to Question 19 by respondent type

Respondent	Agree	Disagree	Total
Community Council, Development Trust or Transport Forum	4	3	7
Energy related business or group	3	0	3
Ferry Board, Committee or Group	0	5	5
Local Authority, RTP or CPP	6	2	8
Port or harbour authority	0	1	1
Public Body	1	1	2
Third sector or campaign group	2	1	3
Tourism organisation or business	3	1	4
Trade Union	0	0	0
Other private sector business or group	1	2	3
Total organisations	20	16	36
% of organisations	56%	44%	100%
Individuals	78	52	130
% of individuals	60%	40%	100%
All respondents	98	68	166
% of all respondents	59%	41%	100%

A majority of respondents – 59% of those answering the question – agreed with a fares structure that both encourages passengers to travel without a private vehicle and incentivises travel at quieter periods.

Around 115 respondents made a comment at Question 19.

Among the general points made, a small number of respondents commented on a lack of detail on proposed fare structures or their potential impacts within the Strategic Approach document, adding that they would require further details on what is proposed before coming to a clear view. Others expressed broad support or noted that measures to manage and spread demand are common to fare structures used in other modes of transport. In contrast, a small number of predominantly Individual respondents saw such measures as interfering with the right to choose how to organise their lives or as demonstrating a lack of understanding of life in island communities. Rather than seeking to manage demand, there were again calls to invest in greater capacity. It was also suggested that:

• The proposed fare structures should only apply for non-residents.
• Any increase in fares on lifeline ferry services must not have adverse impacts on what are already fragile island and peninsula economies.
• Care must be taken to avoid cost increases for disabled people who may use a car as a mobility aid.
• Any revised fare structure would require engagement with communities and stakeholders to ensure a ‘fit for purpose’ approach is adopted.

Although the question covers both travel without a private vehicle and travel at quieter periods, more respondents addressed travel without a private vehicle than commented on travel at quieter periods.

Encouraging travel without a private vehicle

Although there was support in principle for encouraging travel without a private vehicle, the most frequent comments at Question 19 concerned availability of public transport or connectivity between ferry services and other modes of transport. For some the absence of adequate public transport in rural areas or lack of integration between different forms of public transport were seen as making travel without private cars impractical for most people, and as a reason for disagreeing with the proposed fares structure. The extent to which island residents depend on private cars was emphasised, including because of the need to transport children, pets, luggage, medical or mobility equipment, or transporting the supplies that necessitated the trip to the mainland. Tourists and other visitors were also thought likely to be dependent on a vehicle, again because of limited public transport options and their need to travel with luggage.

Other respondents, taking a more positive view, argued that better availability, reliability and connectivity of public transport options will be essential if passengers are to be encouraged to travel without their own vehicles. For example, poor weekend bus services to the Scrabster Ferry were highlighted as a reason that passengers might currently be reluctant to travel without their cars.

An RTP respondent argued that a number of complementary measures will be required to incentivise travel without a private car, for example by freezing or reducing passenger fares, potentially in combination with increases for cars and drivers. There was also a view that many people would be willing to travel without a car if the alternatives can be made both cost effective and more convenient. Specific suggestions included:

• Passenger-only ferries offering lower cost travel.
• Integrated ticketing with other public transport, such as ‘rail & sail’.
• Improving support services for travellers without their own vehicles for example an onboard ‘left luggage’ facility, carrying bags on and off the vessel or a port to destination luggage / bulky goods carrier service.
• Making the operator responsible for providing onward travel for foot passengers if there are delays.
• Better assistance with boarding for disabled passengers, particularly when the linkspan is out of use.
• Developing a regional/national MaaS system that co-ordinates all forms of transport.
• Investment in improved parking facilities at ports and connecting train stations. A port or harbour authority respondent noted that vehicles left by foot passengers for Knoydart and the Small Isles can leave limited parking for day visitors.

With respect to encouraging people to choose active travel options, a Local Authority respondent expressed a view that this would require infrastructure investment designed to suit local circumstances and available budgets. They also noted that pressures on their own budgets mean such projects are likely to require grant funding, but that conditions set by third party funders can make delivery difficult. It was also argued that there must be consideration for older people, disabled people and families with young children who may not find active travel possible.

Incentivising travel at quieter periods

Points in support of incentivising travel at quieter periods included that variable pricing is an appropriate or sensible way to try to encourage better use of quieter services, that this is a fare structure used by other transport operators including train companies and airlines, and that capacity constraints impose other costs on island communities. However, there was also an argument that encouraging travel at quieter times should not be achieved by increasing fares on busier sailings as this would add to living costs for those who have no choice about when to travel and that variable fares risk a situation where better-off travellers are less financially impacted by any peak fare increase.

Quieter times of day

Individual respondents were among those who observed that, some routes have a very limited timetable with too few services for it to be possible to identify quieter times. It was also suggested that it would be unfair to penalise those who need to travel at a particular time – for example for work – or who need to complete a return journey in a single day.

A joint response from a local authority and regional transport partnership suggested that there may be scope to increase current fares for non-islanders during the summer timetable but recommended that application of a peak tariff should not apply:

• On routes where there are only one or two return sailings per day, because of the lack of reasonably close substitute sailings for users to switch to.
• To more than one return crossing each day on routes where there are fewer than five daily return services.

Quieter times of week or year

There was support for using lower fares to incentivise travel at quieter times including because it could help accommodation providers to manage demand and extend the visitor season. One suggestion was that, while visitors might pay more for some summer services, islanders and non-islanders should pay the same fare during the winter timetable.

Some respondents argued that lower fares during the winter months should not be offset by higher fares during peak periods, both because this is inappropriate on an essential service and that islanders who are tied to school holidays will need to travel during periods of highest demand. There was a call for existing peak fares on services to the Northern Isles to be removed.