1 Introduction
1 Introduction
Overview
In October 2008, Transport Scotland introduced the Road Equivalent Tariff (RET) fares policy as a pilot on routes to the Outer Hebrides, Coll and Tiree. The principle of RET is that ferry fares should be set on the basis of travelling an equivalent distance by road plus a fixed element aimed at cost recovery. RET was intended to reduce the cost disadvantage faced by island communities and promote the islands as places to live, work, invest and conduct business.
The RET policy was rolled-out across the Clyde and Hebrides Ferry Services (CHFS) network in three further stages, as follows:
- in 2012, the policy was extended to cover Colonsay, Gigha and Islay
- it was then further extended to the two Arran routes in 2014
- finally, in October 2015, RET was rolled-out to all remaining routes, including the high-volume routes of Oban – Craignure, Wemyss Bay – Rothesay and Largs – Cumbrae
The investment objectives of the RET policy were to:
- increase demand for ferry services by making ferry travel more affordable and more accessible
- increase tourism and supporting existing tourism markets
- enhance local economies and the wider national economy
In keeping with the requirements of the Scottish Transport Appraisal Guidance (STAG), and in order to ascertain the value for money of the policy, Transport Scotland has commissioned evaluations of the 2008 pilot and the 2012 and 2014 roll-outs. In order to complete this evaluation series, Transport Scotland has commissioned Peter Brett Associates LLP, now part of Stantec and ProVersa Ltd to:
- evaluate the impact of the 2015 RET roll-out on the islands and peninsular communities concerned
- consider the network-wide impact of RET on demand and vessel utilisation and the structure of island supply- chains
- establish the cost of RET to the public purse and its contribution to wider government policy objectives
This report therefore provides an evaluation of the impact of RET on the 2015 tranche of routes together with a long-term analysis of the costs and consequences of the policy for the network as a whole.
Report structure
A key challenge in this piece of research is compiling the wide range of data collected and analysed and distilling this into a set of key outcomes and impacts. It is considered that the most appropriate way to do this is through posing a series of questions about RET and using the data and evidence collected to answer them. This will provide a shorter, focused and more accessible report than would be the case if each element of the research was reported in isolation.
The report seeks to answer the following questions, which were agreed with the project Research Advisory Group (RAG):
- what was the scale of the reduction in fares?
- how did this change travel behaviour?
- what have been the consequences of these changes in travel behaviour?
- what have the consequences been for island supply-chains?
- what has been the impact on the communities affected by RET?
- how much has RET cost the government?
- how has RET contributed to government policy?
In adopting this reporting style:
- the analysis in relation to both the ‘2015 RET’ routes and the wider network analysis is reported jointly, with references made to the former where appropriate
- description of the research approach is provided in the next section. No further commentary on method will be provided in the report
Research approach
This section establishes the research approach adopted in undertaking this evaluation and the manner in which it will be reported.
RET phases
For completeness, the islands and routes included in each phase of RET are set out in the table below.
| RET Phase 1: 2008 Pilot (pilot made permanent in 2012)[1] | RET Phase 2: October 2012 | RET Phase 3: October 2014 | RET Phase 3: October 2015 |
|---|---|---|---|
| Oban – Coll / Tiree | Oban – Colonsay | Ardrossan – Brodick | Wemyss Bay – Rothesay |
| Stornoway – Ullapool | Tayinloan – Gigha | Claonaig / Tarbert Loch – Fyne (LF) - Lochranza | Colintraive - Rhubodach |
| Uig – Tarbert / Lochmaddy | Kennacraig - Islay | Ardrossan - Campbeltown | Largs - Cumbrae |
| Oban – Castlebay / Lochboisdale[2] | Fionnphort – Iona | ||
| Tarbert LF – Portavadie | |||
| Oban – Achnacroish (Lismore) | |||
| Oban – Craignure | |||
| Fishnish – Lochaline | |||
| Tobermory - Kilchoan | |||
| Sound of Harris (Berneray – Leverburgh) | |||
| Sound of Barra (Eriskay – Ardmhor) | |||
| Sconser - Raasay | |||
| Armadale – Mallaig | |||
| Mallaig – Small Isles |
Network-wide evaluation
As all previous tranches of RET have been subject to a standalone evaluation, the network-wide evaluation in the context of this report is based on published secondary data only, such as operator carryings and socio-economic data. No primary research was undertaken except stakeholder interviews with hauliers to determine the long-term evolution in island supply- chains.
A range of tasks were undertaken in delivering the network-wide elements of the evaluation – the approach taken in each is explained below.
Operator data analysis
A key element of the evaluation is understanding the impact of RET on operator carryings, vessel vehicle deck utilisation and performance (i.e. reliability and punctuality). In order to inform this analysis, CFL provided sailing-by-sailing carryings and performance data for the period 2007/08 to 2017/18. Whilst data has been provided at the contract year level, it has been reconciled and reported at the calendar year throughout this report.
These data have been processed at the route level and allows for the analysis of carryings, utilisation and performance by:
- route
- direction
- year
- season
- weekday / weekend
- day of week
- time of day
Key findings from the data analysis are drawn out throughout this report.
It should be noted that where the impact of RET on e.g. carryings, utilisation etc is assessed, this is done by comparing against a counterfactual ‘non-RET’ demand scenario. The counterfactual is developed by applying the pre-RET trend for each route to the last pre-RET year and projecting forward. The ‘non-RET’ demand scenario can then be compared to the RET outturn to isolate as far as reasonably possible the ‘RET effect’.
To make the data presentation and analysis manageable, the network wide data is reported in five geographic areas, as per the CFL website:
- Firth of Clyde
- Southern Hebrides
- Inner Hebrides
- Skye, Raasay and the Small Isles
- Outer Hebrides
Please note: The data used in the generation of this report has been provided from the CalMac performance monitoring system. The analysis and supporting data has not been fully validated by CFL, therefore the responsibility for its interpretation rests with the author.
Commercial Vehicles (CVs) mentioned in this report relate to those vehicles greater than 6m. The reclassification of CVs from 5m to 6m, has led to several commercial vans now travelling as cars, and therefore, will not be picked up in the data as CVs.
Island supply-chains
The RET fares system only applies to passengers and vehicles less than 6m long, and thus it primarily effects the cost of movement of people rather than goods. However, previous RET evaluations have suggested that the policy has impacted on island supply-chains in terms of:
- increased volumes of goods being moved stemming from increased consumption on the islands as a result of higher visitor numbers and / or
- the ‘6m rule’[3] and the associated substitution of goods from commercial vehicles into vans under 6m now charged at the car rate
In order to more fully explore and evidence the above effects, ProVersa Ltd undertook a series of one-to-one depth interviews with haulage firms serving the islands. Twenty haulage firms were contacted, with a mixture of island-based hauliers and mainland firms serving the islands. Of these twenty firms, seven responded (to respect confidentiality, these firms are not named). Whilst a response was not received from every company, those who did respond offered detailed input and responses were generally achieved from the highest volume routes and across the various phases of the roll-out. Additional information from other combined PBA and ProVersa studies (e.g. the Outer Hebrides STAG and Arran RET Evaluation) was also incorporated into the analysis.
Socio-economic data analysis
Whilst RET is a transport policy, it was partly introduced to support the social and economic development of the Clyde and Hebridean islands, some of which are amongst the most fragile communities in Scotland. To this end, the evaluation considers the extent to which the policy has fed through into wider socio-economic outcomes and impacts.
Whilst an important element of this evaluation, there are two major challenges which limit the use of secondary data in analysis such as this:
- Spatial definition: the range of data available reduces as the level of spatial disaggregation increases. In addition, where spatially disaggregate data are produced, this is commonly at the Data Zone level. Whilst suitable for the larger islands, in many cases (e.g. Lismore and Raasay) a single Data Zone can cover one or more of the smaller islands as well as a section of the mainland. In these cases, data would have to be available at the Census output area level to isolate the island, and data at this level is limited.
- Lag: it can take several years for some secondary data to be gathered, complied or estimated, especially at sub-local authority level, meaning that the impact of RET may not be seen in these statistics for a number of years. In many cases, the most recent data are from the 2011 Census, which is now almost ten years old.
With this in mind, we adopted a two-tier approach to this task:
- The first task was to review data availability, with a view to developing an ‘RET geography’. However, as anticipated at Inception stage, the level of spatial disaggregation and the data lag meant that there were very little data available at the island level from which to draw meaningful conclusions.
- The second task was to develop a case study based on the Na h-Eileanan Siar (Outer Hebrides) area. RET was introduced on all routes between the Outer Hebrides and the Scottish mainland in October 2008. This means that there is a wider range of statistics and indicators available from secondary sources. Despite this initial expectation - and as will be explained later in this report - the type, volume and spatial disaggregation of data covering Scotland’s islands does not facilitate a rigorous and robust evaluation of how RET has impacted on the society and economy of the Outer Hebrides.
Cost to Government
As noted above, an early task in this evaluation was the development of a ‘non-RET’ counterfactual, estimating what demand and revenue would have been without the introduction of the policy. We have estimated this counterfactual for each phase of RET, providing a ‘do nothing’ estimate of demand and revenue – that is, what would have happened if RET had not been introduced.
This counterfactual for each phase and over the lifespan of RET is compared to the outturn revenue, therefore identifying the ‘cost’ of the RET policy.
Consultations have also been held with CMAL and CFL to understand the extent to which RET has given rise to additional capital or revenue costs to accommodate increased levels of demand. Moreover, we have consulted with each of the relevant local authorities to understand investment in island-based infrastructure, predominantly stemming from increased visitor numbers in the islands.
Policy assessment
From a network-wide perspective, the final task was assessing the ‘outcomes and impacts’ of RET against its original objectives and identifying how it has contributed to wider government policy. The policy mapping exercise is relatively high- level and is focussed on:
- mapping the impacts of RET against its original objectives
- increase demand for ferry services by making ferry travel more affordable and more accessible
- increase tourism and supporting existing tourism markets
- enhance local economies and the wider national economy
- assessing how RET has contributed towards the headline government policies for
- transport, as expressed through the National Transport Strategy
- the economy, as expressed through Scotland’s Economic Strategy
- islands, as expressed through the National Islands Plan
- Scotland as a whole, as expressed through the National Performance Framework, which records how all areas of government are contributing towards the Scottish Government’s Purpose of “creating a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable economic growth”
2015 RET routes
In addition to the network-wide analysis, a programme of primary research was carried out on the ‘2015 RET routes’, providing parity in the evaluation of these routes with all previous tranches of RET.
The primary research on the ‘2015 RET routes’ was focused on establishing how island residents, businesses and visitors have responded to the introduction of the policy – i.e. what behavioural changes has RET prompted. Key outputs from the surveys are presented throughout this report and the following sections highlight the main areas which the surveys explored.
Resident survey
The resident survey was online-based and common across all areas. Residents of all island and peninsular communities included in the 2015 RET roll-out were invited to complete the survey. It explored:
1) awareness of RET
2) whether a household had moved to an island as a result of RET
3) perceptions of past and present affordability of travel
4) travel habits before and after RET
a) by broad purpose
b) tickets used previously and now
c) consequences of these changes in travel behaviour on (i.e. opportunities taken up)
i) employment / incomes
ii) social interactions
iii) leisure and holidays
iv) shopping (food / non-food)
v) use of public services
d) consequences of more car-based travel
i) implications on mainland public transport
5) changes in travelling experience
6) island residents’ views of RET’s impacts on aspects of island life including e.g.
i) employment opportunities on island
ii) quality of retail on island
iii) quality of cafes / restaurants on island
iv) perceptions of economic activity
v) traffic levels etc
vi) island facilities generally
vii) overall positive / negative
There were 767 responses to the survey with around two thirds of these fully completing the survey. Mull & Iona and Cumbrae account for just over half of responses. The breakdown of survey responses by community is shown in the table below:
| Community | Count of responses | % of Total | % of Population |
|---|---|---|---|
| Ardnamurchan | 5 | 1% | 0% |
| Barra | 34 | 4% | 3% |
| Benbecula | 20 | 3% | 2% |
| Bute | 15 | 2% | 0% |
| Cumbrae | 113 | 15% | 8% |
| Eigg | 18 | 2% | 22% |
| Harris | 11 | 1% | 1% |
| Iona | 38 | 5% | 22% |
| Kintyre and Cowal | 9 | 1% | 0% |
| Lewis | 37 | 5% | 0% |
| Lismore | 23 | 3% | 12% |
| Morvern | 2 | 0% | 1% |
| Muck | 2 | 0% | 7% |
| Mull | 266 | 35% | 10% |
| North Uist | 26 | 3% | 2% |
| Not a resident of one of these areas | 49 | 6% | |
| Other | 34 | 4% | |
| Raasay | 4 | 1% | 3% |
| Rhum | 1 | 0% | 5% |
| Skye | 35 | 5% | 0% |
| South Uist | 25 | 3% | 1% |
| Grand Total | 767 | 100% |
For the purposes of analysis in this report, the above survey responses have been aggregated to:
- Clyde
- Mull and Iona
- Lismore
- Outer Hebrides
- Skye and Raasay
- Small Isle
- Mainland peninsula
- Non-2015 routes
Note that those who responded ‘other’ have been placed in the most appropriate group based on their response.
It is important to note here that, as the resident survey was web-based, the sample was self-selecting and there may therefore be an element of response bias. That is, it is possible that the sample may be skewed by those favourable to RET or those who think that RET has been a negative thing, affecting responses to the key questions about how RET is perceived in each community. If further evidence for these key questions is required, a phone-based or ‘panel’ validation exercise could be undertaken, across a wider range of RET affected islands.
Onboard survey
The onboard survey programme was undertaken in July and August 2019 – it covered all ‘2015 RET’ routes with the exception of Fionnphort – Iona[4]. The survey was administered on-ferry, with recipients asked to either complete it onboard and hand it back or return it in a reply-paid envelope. A weekday and weekend day survey was undertaken on all routes across the length of the operating day.
The onboard survey explored:
- basic journey details – now and whether the same trip was made pre-RET
- awareness of policy and scale of fares reductions
- importance of the lower fare on the journey being made
- what opportunities are now being taken up as a result of RET and what the consequences of this are?
- what would have happened without RET?
- any difficulties encountered in booking vehicles
- attitudes towards demand management measures
- the extent of switching between ferry routes
- the extent of switching between road and ferry
- level of comfort and services onboard
- for non-residents, level of spend on island split by accommodation and non-accommodation
- for residents, any activities now undertaken off-island that were previously undertaken on-island (capturing economic leakage)
There was a total of 1,643 responses to the onboard survey. Of this sample,
- 21% were permanent island residents
- 4% were second homeowners
- 74% were visitors
The breakdown of responses by routes is shown in the table below:
| Route | Responses | % of Total |
|---|---|---|
| Ardmhor-Eriskay | 63 | 4% |
| Berneray-Leverburgh | 191 | 12% |
| Colintraive-Rhubodach | 59 | 4% |
| Fishnish-Lochaline | 80 | 5% |
| Largs-Cumbrae | 148 | 9% |
| Mallaig-Armadale | 124 | 8% |
| Mallaig-Eigg/Muck/Rum/Canna | 33 | 2% |
| Oban Craignure | 171 | 10% |
| Oban-Lismore | 40 | 2% |
| Sconser-Raasay | 144 | 9% |
| Tarbert LF-Portavadie | 81 | 5% |
| Tobermory-Kilchoan | 56 | 3% |
| Wemyss Bay-Rothesay | 453 | 28% |
| Grand Total | 1,643 |
Business survey
The business survey was similarly online-based, with the survey again common across all areas. Businesses in all island and peninsular communities included in the 2015 RET roll-out were invited to complete the survey, which explored how RET has impacted on customer numbers, turnover, staff recruitment & retention, investment and the community in which the business is based.
Following cleaning to remove non-completions and surveys submitted in error, there was a total of 75 responses to the business survey. The breakdown of survey responses by island is shown in the table below:
| Route | Responses | % of Total |
|---|---|---|
| Ardnamurchan | 0 | 0% |
| Barra | 1 | 1% |
| Benbecula | 2 | 3% |
| Bute | 4 | 5% |
| Cumbrae | 20 | 27% |
| Eigg | 5 | 7% |
| Harris | 2 | 3% |
| Iona | 4 | 5% |
| Kintyre and Cowal | 1 | 1% |
| Lewis | 2 | 3% |
| Lismore | 2 | 3% |
| Morvern | 0 | 0% |
| Muck | 0 | 0% |
| Mull | 15 | 20% |
| North Uist | 2 | 3% |
| Other | 7 | 9% |
| Raasay | 2 | 3% |
| Rhum | 0 | 0% |
| Skye | 4 | 5% |
| South Uist | 2 | 3% |
| Grand Total | 75 | 100% |
The business survey is reported in absolute numbers, drawing out key information for each island as appropriate. The analysis contained within it is supplemented by the qualitative findings obtained from 14 depth interviews with individual businesses across the islands.
It should be noted that securing businesses to participate in the depth interviews was highly challenging. A combination of limited business resources, consultation fatigue and a feeling of limited relevance as RET does not apply to commercial vehicles meant that only a small number of the 50 or so businesses we contacted were willing to participate.