Executive Summary

Connecting Scotland – The Value of Transport

Introduction and Rationale for Producing this Paper

Scotland has a unique, rich and diverse geography. This geography has shaped our history, from acting as a natural defence from invaders to providing natural resources that influenced our economic development. Of course, Scotland’s geography has also shaped our transport system and network. In many ways, it creates challenges and these challenges lead to transport playing a disproportionately large role in Scottish society. Our ferry network provides a vital link between our islands, and to the mainland, connecting communities and enabling a flow of value in both directions. Scotland’s rugged terrain and sparsely populated geography away from our major cities mean that our trunk road network in particular acts as a key foundation upon which we both depend and derive tremendous value from. Getting transport right matters more in Scotland than it does in most countries in the world.

Scotland’s geography and transport system have also had a significant impact beyond our borders. Dating back to at least the establishment of the Carron ironworks, near Falkirk, in 1759, transport has played a key role in the economic and social development of Scotland and Scottish innovations in the field have had a profound impact around the world, shaping the industrial revolution.

Today, the transport system continues to have a profound impact on our daily lives. In 2023, 64% of Scottish Household Survey respondents had travelled the previous day, with car being the most popular mode of transport – accounting for 51% of journeys. Although we do not know the total volume of journeys made, cars account for around 96.9 million vehicle kilometres per day. Approximately over 900,000 bus passenger journeys were made each day in 2023, as well as over 200,000 rail journeys and over 25,000 ferry journeys each day. Even when we’re not making a journey ourselves, a lot of what we do depends on the transport network.

Of course, sometimes it can be easiest to notice our transport system when things are not going well – with disruption and delay causing us significant frustration. This paper is not an attempt to diminish or deflect from these frustrations. Instead it is an attempt to look at the Scotland’s transport network from a different perspective – to take stock of the tremendous value that transport delivers for the people of Scotland and to explore some of the issues that we face in maximising the positive impact that transport can have on our economy and on our lives. This involves discussing the ways that transport already influences and improves our lives. But it also involves looking at some of the constraints that we face, and the areas where transport could be delivering more value for our communities.

Too often, transport is viewed in isolation and seen as separate from the economy. Good transport is often not seen as central to our wellbeing in the same way as other key Government policy areas. This paper attempts to challenge that perspective and show that overlooking the impact that transport can have on our lives represents a tremendous missed opportunity – one that costs us both economically and socially. This stands out more when considering the context of a devolved government, which has powers over some, but not all, policy areas available at its disposal. Similar to our geography making transport more important to our lives than for other countries, the balance of devolved and reserved powers in Scotland means that transport should represent one of our key economic and social policy levers. This is even more true at a local or regional level within Scotland. It is hoped that this paper will show the importance of ensuring that transport always plays a key role in economic and wider social policy making, and that is aligned with, and can both influence and be influenced by, other key policy areas such as economic development and housing. Doing so will help us deliver better outcomes, grow the economy and improve our lives.

The Transport Sector Itself

Even when just considering transport in a narrow context – as a sector of the economy – it is clear that it is an economic powerhouse.

Analysis in this paper shows that the transport sector is estimated to support just over 150,000 full time equivalent jobs, and just under £10bn Gross Value Added (GVA). This represents between 6-7% of the total workforce and Scottish GVA.

Similarly, transport comprises a major part of the Scottish Government’s economic toolkit. In 2025-26, the transport budget exceeded £4bn for the first time. The transport budget is larger than the economy budget, the Rural Affairs, and Reform and Islands budget, the Net Zero and Energy Budget combined. In fact, £6 in every £100 that the Scottish Government spends is spent on transport. This is much more pronounced when looking at the capital budget, which has a significantly important role in stimulating and shaping our economy. Almost £3 in every £10 of capital expenditure invested by the Scottish Government is accounted for by transport.

On this basis alone, the role that transport plays in our economy and our lives is hard to under-state.

The Role of Transport

Of course, simply thinking of transport in these terms will lead us to grossly underestimate the impact of the transport network on Scotland’s economy. This impact is felt much more in terms of all the things that the transport network facilitates. It is almost impossible to imagine how our society could function without a modern transport system. On the few occasions when there has been a major disruption to our ability to travel – such as the recent Storm Éowyn – our lives have been limited in ways that would be unimaginably constrained if repeated with regularity.

Our ability to go to work, or to school, access services or see family and friends all relies on transport in a tangible way. Looking at commuting to work, the Scottish Household Survey (SHS) data tells us that 83% of workers commuted to work at least once per week in 2023, and 71% did so at least three days per week. This was done through a mix of modes: walking (12%), taking a car or van (68%), riding the bus (10%), cycling (3%) and taking the train (5%). Transport infrastructure is critical in our day-to-day lives – be that well-maintained road for private vehicles, accessible pavements or bicycle routes, or dependable bus or rail services.

Of course, we also rely on the transport network to deliver goods around the country so that our shops are stocked with food and clothes and other products. We rely on transport to support the growth of Scottish businesses. Scottish Transport Statistics show that the scale of trade supported by our transport network is substantial; be that commercial freight travelling to, within and from Scotland. In 2023, approximately 134 million tonnes of commercial freight was transported by UK Heavy Goods Vehicles (HGVs) on journeys originating in Scotland – 118 million tonnes travelling within Scotland, and 16 million tonnes to the rest of the UK. Exports through major Scottish ports totalled almost 23 million tonnes in 2023 and Scottish goods exports totalled £32.3 billion spread across the world.

Attempting to comprehensively cover all the avenues through which transport impacts on our economy and our lives is a daunting task. It also would likely represent an abstract exercise, and it is intended that this paper focus on more tangible ways in which transport impacts our lives. For this reason, the paper briefly discusses some frameworks for understanding how transport interventions can deliver economic benefits and improve our wellbeing – focussing on economic and social impacts but also externalities such as health and safety. It also discusses some of the empirical work that has looked at the link between macroeconomic growth and transport investment, which suggests that under-investment in transport can constrain economic growth. However, the focus of the paper is exploring specific ways in which transport can influence our economy and lives, and so the majority of the paper is made up of discussions or case studies around more specific issues.

Case Study: Agglomeration and Productivity

There is a well-established link between large urban areas and higher productivity. Generally speaking, the larger the size of a town or city, the more productive the people of that town or city will be. The increase in productivity is thought to be achieved by bringing people closer together and facilitating learning and the sharing of knowledge as well as creating deep labour markets and allowing for greater specialisation. This is referred to as ‘agglomeration’ by academics.

However, simply achieving a large population does not guarantee securing these benefits. Transport (as well as housing density and the interaction between the two) plays a critical role in changing the ’effective’ size of a town or city. Where populations lack reasonable access to our cities and town centres, increases in productivity will not be achieved, and opportunities to increase economic growth will not be realised.

Outside of London, cities in the UK (and Scotland) miss out on some of the economic benefits that agglomeration can provide because of our transport infrastructure. Compared to many European cities for example, only relatively small areas and populations are served by public transport infrastructure that allows them to access key city districts quickly. Relative to many US cities, access by car is similarly lagging.

We have much to be proud of in Scotland over recent years, the construction of the Queensferry Crossing, the refurbishment of key railway stations in our major cities and the provision of concessionary bus travel to over 2 and a half million people. However there is also significant scope to boost productivity and achieve economic gains by further improving our infrastructure and other interventions.

Case Study: Safety and Health

Transport can improve our economy, as well as support wellbeing in terms of our safety and our health.

While transport does facilitate a huge amount of positive outcomes, it can also lead to injury and, tragically in some cases, even death. Clearly the costs to our society are huge – and the potential benefits of increasing our safety are sizeable. The World Bank estimates that reducing road traffic injuries can lead to substantial economic benefits. Reducing road traffic accidents has obvious and immeasurable benefits on a human level but also reduces burdens on our health service and reduces the risk that our lives are worsened through injury and we find ourselves unable to work. Critically, we know that with sufficient investment and with bold policy decisions, we can achieve reductions in road traffic accidents and also achieve wider social outcomes – improving the places we live in: for example creating closer communities and allowing our children greater independence.

Another area where transport can improve our wellbeing and reduce pressures on public services is investment in active travel. Evidence shows that participation in active travel is strongly associated with improved health outcomes – replacing time that would otherwise be spent passively with physical activity and addressing one of the major health challenges we face in Scotland: physical inactivity. Increasing physical activity reduces risks of several chronic health conditions including cardiovascular disease, stroke, obesity, colon and breast cancer, type II diabetes, osteoporosis, depression and anxiety. In doing so, it is associated with reducing pressures on health budgets and reducing sick days at work. Shifting from car use to active travel can also achieve environmental benefits too in terms of air quality, as well as making the places we live safer. There is a clear rationale for further investment in active travel, with many project evaluations showing a strong social return on investment.

Case Study: Social benefits of addressing car dependency

Access to a car can unlock a lot of opportunities for individuals. 7 in every 10 people who travel to work do so mainly by car. The increased mobility it offers people helps them pursue employment opportunities that they may not otherwise have access to. Cars can also represent wonderful means of mobility and improves lives for a host of other reasons, with the car facilitating all sorts of journeys, and enabling people to live in all sorts of places.

However, access to car travel is not evenly distributed throughout our society. Owning a car is a significant cost in and of itself. Learning to drive can be prohibitively expensive, and for some driving a car is not a possibility at all, irrespective of cost. Transport Scotland statistics show that those who do not drive as frequently are more likely to be women, identify as disabled or are from non-white ethnic groups. Children obviously do not drive, and the relatively young (17-29) and old (80+) also drive far less than other age groups. Looking at socio-economic factors, those who are unemployed, permanently sick or disabled or unable to work because of a short term illness or injury are far less likely to hold a driving licence or drive regularly.

So while cars can grant people mobility and access to opportunities, a lack of access to car travel also disproportionately affects particular groups within society – often at times those who may benefit the most from the sort of accessibility that cars can grant to others. And, so while the health and safety benefits are one argument in favour of reducing car dependency, another is around tackling inequalities and ensuring a greater equality of accessibility. As such, providing high quality public and active travel options is a key strand of Scotland’s efforts to tackle inequality and deliver inclusive economic growth. There are also potentially large benefits for our communities, as reducing car dependency can reduce community fragmentation and increase the freedom and safety of children to travel.

Case Study: Opportunities of Decarbonisation

The transport sector is responsible for a higher total of greenhouse gas emissions than any other sector in Scotland. Huge investment, both public and private, needs to be made in order to decarbonise our transport network and help Scotland reach Net Zero. This investment is not so much a choice, but a necessity, not only as a moral responsibility, but also because the costs of not tackling climate change will massively outweigh the costs of decarbonisation.

In this context, it’s absolutely essential that we take full advantage of the economic opportunities that the transition to a low carbon transport system presents. Part of that will be to ensure that public money is used to stimulate and leverage the private investment needed to transition our transport network to electric vehicles, with the Scottish Government already focussing policy around unlocking wider investment.

Another key part of maximising the opportunities we face is to look at opportunities to specialise and gain a competitive advantage in the industries that will play an increasingly important role as low carbon transport becomes more common both in Scotland and around the globe. Scotland is currently well placed to become a world leader in many key areas. Investment in areas such as electric vehicle and battery manufacturing, sustainable aviation fuel or construction of suitable infrastructure for road and rail could help foster areas of valuable competitive advantage for Scotland. Jobs could also be created in other industries via the benefits unlocked by decarbonisation, for example as electric vehicles become more efficient and operational costs of these vehicles decrease, this should open up significant economic opportunities. Similarly, developments in Vehicle to Grid technology could help reduce the demands for energy creation.

The transition to a low carbon transport system also offers significant social opportunities. The Scottish Government is committed to a just transition that will ensure economic opportunities reach those communities who most need it, either because they have lost out as a result of wider economic changes in the move to a low carbon economy or because of underlying structural reasons. Careful consideration of where and for whom support is provided can ensure that the transition leaves no one behind.

Case Study: Geography

Given that transport is about getting from one place to another, we must recognise the impact of our geography. Scotland features a densely populated area around the central belt but also far more sparsely populated areas to the North and South. We boast a diverse range of Islands with varying levels of access to people, goods and services. This geography is key to our identity and it provides us with huge advantages from attracting tourists to generating energy. From a transport perspective it also provides unique challenges. For example, the location of many of our smaller communities make them heavily dependent on car travel, and transport solutions that may work in the central belt are unlikely to work in these areas. Ensuring our island communities have the access they need to other islands and to the mainland as well as facilitating the flow of goods and services back and forth also presents entirely different challenges. The transport needs of these communities are crucial to our country, significantly more so than many other nations.

Over recent decades our transport system has adapted to economic changes and helped facilitate a population shift from the West to East of Scotland. Strategic investments have been made to boost the connectivity of our largest cities. We have also seen economic opportunities expand in the North of the country more recently, and looking forward it’s likely that will continue with the opportunities offered by energy transition and the growth of renewables. Strategic investments are being, and must continue to be, made in order to ensure that transport can act as an enabler for these industries and that Scotland can take full advantage of the economic opportunities that they offer.

Constraints and Challenges

The above case studies have highlighted the benefits of transport as well as some of the complex issues we face, and the benefits that could be unlocked by resolving these. Before considering strategic and policy implications, it is worth also considering some of the challenges and constraints that we face.

In common with many advanced economies, we also face the challenges of adapting to the changes we expect to face as a result of an aging population. This has implications for what our transport system needs to look like in the future, particularly in terms of accessibility. Importantly, an ageing population poses a major fiscal challenge for governments as well: both in terms of generating revenues, and providing public services. For transport, it may also pose challenges in terms of an older population who are more reliant on public transport for their mobility and in providing concessionary travel for that population.

Even in the short term, the transport sector faces a challenging fiscal outlook. While transport capital investment in Scotland has typically matched similar levels in the UK, it is likely to have lagged behind Organisation for Economic Cooperation and Development (OECD) competitors (despite Scotland’s challenging geography). An expected tight fiscal position with respect to capital budgets in the near term will make investment choices harder still in the future. At the same time, the transport sector is still dealing with the ongoing financial impacts of the COVID-19 pandemic, which saw public transport patronage (and therefore revenues) drop from pre-pandemic levels. In common with much of the rest of the public sector, there is also a pressure in terms of inflation on input costs and wage bills, with the associated cost of living crisis also affecting demand. 

Prioritisation and Policy

It is clear that a strategic approach is needed in considering how transport is delivered in Scotland, both to take account of the (sometimes competing) impacts that transport can have, as well as to recognise the constraints that we face. While there will be some policies or projects that can deliver against all of our aims within an affordable budget, these will represent the easier decisions to make. The tensions and trade offs implicit within the discussion above will mean that difficult decisions will need to be made about Scotland’s future transport system. This paper does not explore individual policy decisions, but does discuss the strategic frameworks in place to ensure that policy decisions are made intentionally and to achieve strategic goals. The National Transport Strategy (NTS2) sets out a vision for protecting our climate and improving lives, it is built on four priorities that are specific to transport but are also highly aligned with the 4 priorities of the First Minister and The Scottish Government. Beyond strategic frameworks, Transport Scotland also has a substantial institutional framework in place to ensure that the policy decisions that are made deliver on these priorities. The NTS2 itself is backed by a substantial monitoring and evaluation framework that tell us how well we’re performing. Scottish Transport Appraisal Guidance (STAG) helps ensure appraisal takes account of our priorities while regular investment decision making decisions for all major projects mean that they are subject to numerous rounds of scrutiny prior to being approved. All of this contributes to achieving a vision of “a sustainable, inclusive, safe and accessible transport system, helping deliver a healthier, fairer and more prosperous Scotland for communities, businesses and visitors.” 

Conclusion

The transport sector itself is a huge part of our economy, helping support over 1 in 20 jobs and a similar proportion of all economic activity in Scotland. On this basis alone, it has wide and far reaching economic implications.

However, the impact that transport has on our economy and our lives is much larger still – with transport touching our lives every day, and being an essential foundation that supports most of the economic opportunities we pursue. This paper has attempted to both illustrate this overall impact, but also to explore some of the ways in which transport can benefit us, establishing how transport investments and interventions can boost our productivity, improve our health, tackle inequalities and help us take climate action.

As such, this paper is also an argument for a greater recognition of transport as one of our key economic and social policy levers at both a national, regional and local level, and something that should be celebrated for what it brings to our everyday lives.