The strategic case

The Strategic Context

Regional Transport Partnerships (RTPs) play a crucial role in strengthening the planning and delivery of regional transport across Scotland.

Each RTP is responsible for producing a regional transport strategy. These are supported by delivery plans where RTPs set out when and how projects and proposals will be delivered. Some RTPs are also responsible for the delivery of transport services. In particular Strathclyde Partnership for Transport owns and operates the Glasgow subway and major bus stations across the west of Scotland.

The seven RTPs and the Local Authority areas they cover are:

• Shetland Transport Partnership (ZetTrans: Shetland Islands)
• Highlands and Islands Transport Partnership (HITRANS: Highlands & Islands, Moray, Orkney Islands, Na h-Eileanan Siar; Argyll & Bute)
• North-East of Scotland Transport Partnership (NESTRANS: Aberdeen City, Aberdeenshire)
• Tayside and Central Scotland Transport Partnership (TACTRAN: Angus, Peth & Kinross, Stirling, Dundee City)
• South-East of Scotland Transport Partnership (SESTRAN: City of Edinburgh, Clackmannanshire, East Lothian, Falkirk, Fife, Midlothian, Scottish Borders and West Lothian)
• Strathclyde Partnership for Transport (SPT: East Dunbartonshire, East Ayrshire, East Renfrewshire, Glasgow City, Inverclyde, North Ayrshire, North Lanarkshire, Renfrewshire, South Ayrshire, South Lanarkshire, West Dunbartonshire and Argyll and Bute)
• South-West of Scotland Transport Partnership (Swestrans: Dumfries & Galloway)

Argyll and Bute is divided between Highlands and Islands (all except Helensburgh and Lomond) and Strathclyde (Helensburgh and Lomond only) and for the purposes of the analysis below is considered wholly within the HITRANS area.

The HITRANS and ZetTrans pilot was introduced following an open EOI completion accessible by all RTPs. However, this was in the context of a limited £10 million budget which meant that it was only practical for less densely populated areas to bid for a full scheme (SPT did initially bid for a limited scheme targeting those becoming ineligible for U22 free travel).

The following section considers the rationale behind the choice of the SPT area as the next step towards a national scheme.

Extension to SPT area

This section considers the choice for the next stage of a national scheme to be based within the SPT area based on both the socio-economic characteristics of the different RTPs and the public transport use profile of RTP areas. The focus will be on the Scottish Index of Multiple deprivation (including the Accessibility domain) and more general public transport and socio-demographic information across the RTP areas.

Scottish Index of Multiple deprivation

The Scottish Index of Multiple Deprivation is a relative measure of deprivation across 6,976 small areas (called data zones). If an area is identified as ‘deprived’, this can relate to people having a low income but it can also mean fewer resources or opportunities. SIMD looks at the extent to which an area is deprived across seven domains: income, employment, education, health, access to services, crime and housing.

SIMD is the Scottish Government's standard approach to identify areas of multiple deprivation in Scotland. It can help improve understanding about the outcomes and circumstances of people living in the most deprived areas in Scotland. It can also allow effective targeting of policies and funding where the aim is to wholly or partly tackle or take account of area concentrations of multiple deprivation.

SIMD ranks data zones from most deprived (ranked 1) to least deprived (ranked 6,976). People using SIMD will often focus on the data zones below a certain rank, for example, the 5%, 10%, 15% or 20% most deprived data zones in Scotland.

SIMD is an area-based measure of relative deprivation: not every person in a highly deprived area will themselves be experiencing high levels of deprivation.

Data zones in rural areas tend to cover a large land area and reflect a more mixed picture of people experiencing different levels of deprivation. This means that SIMD is less helpful at identifying the smaller pockets of deprivation found in more rural areas, compared to the larger pockets found in urban areas. SIMD domain indicators can still be useful in rural areas if analysed separately from urban data zones or combined with other data.

The existing Scottish Index of Multiple Deprivation Local and National Share Calculator Scottish Index of Multiple Deprivation: data and resources - gov.scot has been augmented to examine the SIMD characteristics of each RTP area.

Table 1 – SIMD characteristics of RTPs – most deprived areas

Regional Transport Partnership	Total data zones	20% most deprived (Overall)	Local share of SIMD 2020v2_rank	National share
SPT	2963	913	31%	65%
TACTRAN	650	108	17%	8%
SESTRAN	2006	283	14%	20%
NESTRAN	623	38	6%	3%
HITRANS	503	34	7%	2%
SWESTRANS	201	19	9%	1%
ZETTRANS	30	0	0%	0%

The SPT area has the greatest concentration of 20% most deprived data zones across all RTPs (by a considerable margin). This is the same for all domains except Access. SPT also has the lowest share, outside of HITRANS, SWESTRANS and ZETRANS of the 20% least deprived data zones.

Table 2 – SIMD characteristics of RTPs – least deprived areas

RTP	Total data zones	20% least deprived	Local share of SIMD 2020v2_rank	National share
SPT	2963	495	17%	35%
TACTRAN	650	126	19%	9%
SESTRAN	2006	516	26%	37%
NESTRAN	623	203	33%	15%
HITRANS	503	39	8%	3%
SWESTRANS	201	17	8%	1%
ZETTRANS	30	0	0%	0%

When looking at the Access Domain, ZetTrans and HITRANS have the greatest share of the most deprived areas.

Table 3 – SIMD characteristics of RTPs – Access Domain

RTP	Total data zones	20% most deprived (Access)	Local share of SIMD 2020_Access_domain_rank	National share
SPT	2963	434	15%	31%
TACTRAN	650	160	25%	11%
SESTRAN	2006	295	15%	21%
NESTRAN	623	170	27%	12%
HITRANS	503	237	47%	17%
SWESTRANS	201	79	39%	6%
ZETTRANS	30	20	67%	1%

As such the initial pilot in HITRANS and ZetTrans can be thought of in terms of improving access whereas the choice of SPT for the first extension allows an exploration of the policy in an area with better transport connections but concentrations of other forms of deprivation.

Socio-economic characteristics and public transport use

This section draws on selected tables from the latest releases of Scottish Transport Statistics and Transport and Travel in Scotland.

The SPT area has the highest proportion in Scotland of households without a car for private use.

Table 4: Number of cars available for private use by households (percentages): 2024

Sub-geography	None	One	Two	Three or more
Scotland	27.4	44.1	22.6	5.8
HITRANS	16	49	27	9
NESTrans	21	47	25	8
Zetrans	12	50	30	8
SESTrans	27	45	23	5
SWESTrans	23	44	27	5
SPT	33	42	20	5
TACTrans	25	42	26	7
Large urban areas	39	43	16	2
Other urban areas	25	46	23	6
Accessible small towns	19	46	27	8
Remote small towns	26	50	19	5
Accessible rural	11	40	36	13
Remote rural	12	45	32	11

It also has the second highest proportion of employed adults not working from home who travel to work by bus and the second lowest proportion of adults who do not use bus on a monthly basis. The highest proportion area in each case is SESTrans which reflects the particular characteristics of Edinburgh city and differences in transport provision between the two largest cities, with a subway and extensive local train network in Glasgow.

Table 5: Employed adults (aged 16+) not working from home - usual method of travel to work (percentages), 2024

Sub-geography	Walking	Driver Car/Van	Passenger Car/Van	Bicycle	Bus	Rail	Other
Scotland	11.9	61.6	4.5	2.3	10.1	6.4	3.2
HITRANS	15	72	5	2	1	2	3
NESTrans	11	68	4	2	6	1	8
Zetrans	8	79	7	2	1	0	3
SESTrans	13	54	5	4	16	6	3
SWESTrans	8	80	2	4	3	1	2
SPT	10	61	4	2	10	10	2
TACTrans	15	68	4	1	6	4	3

Table 6: Adults (16+) - use of local bus services in the previous month (percentages): 2024

Sub-geography	Local bus Every day, or almost every day	Local bus 2 or 3 times per week	Local bus About once a week	Local bus About once a fortnight, or about once a month	Local Bus NOT used in past month
Scotland	6.6	11.3	7.7	13.4	61.0
HITRANS	2	3	3	9	83
NESTrans	6	7	6	19	62
Zetrans	2	2	2	10	83
SESTrans	9	14	10	13	53
SWESTrans	3	6	2	13	77
SPT	7	13	8	12	60
TACTrans	6	7	7	16	63
Large urban areas	12	18	11	15	43
Other urban areas	4	8	6	12	69
Accessible small towns	3	6	7	14	70
Remote small towns	2	5	6	11	77
Accessible rural	2	6	4	12	76
Remote rural	2	3	2	10	83

A key wider transport feature of the SPT area is the high train use which is significantly higher than all other areas. This means that the choice of SPT is particularly useful in terms of assessing the impact on rail services. In addition, the Subway, although currently at a single fare of less than £2, is a further mode where there may be interactions.

Table 7: Adults (16+) - use of train services in the previous month (percentages): 2024

Sub-geography	Train Every day, or almost every day	Train 2 or 3 times per week	Train About once a week	Train About once a fortnight, or about once a month	Train NOT used in past month
Scotland	1.2	3.8	4.8	21.1	69.2
HITRANS	0	0	1	11	87
NESTrans	0	1	1	15	83
Zetrans	0	1	0	2	96
SESTrans	1	3	4	23	69
SWESTrans	0	0	0	8	91
SPT	2	6	7	24	60
TACTrans	1	2	3	20	75
Large urban areas	2	5	6	21	66
Other urban areas	1	4	5	24	66
Accessible small towns	0	3	3	21	72
Remote small towns	0	2	0	11	87
Accessible rural	0	2	5	21	72
Remote rural	0	0	1	11	87

Looking at selected views of bus users, SPT has the lowest proportion of bus users who agree that fares are good value for money.

Table 8: Adults (16+) who used a local bus services in the past month, percentages who agreed with each statement: 2024

Sub-geography	it is simple deciding the type of ticket I need	finding out about routes and times is easy	it's easy changing to other forms of transport	the fares are good value
Scotland	89	85	69	64
HITRANS	81	79	54	58
NESTrans	86	72	59	57
Zetrans	[small sample]	[small sample]	[small sample]	[small sample]
SESTrans	92	91	82	72
SWESTrans	93	93	66	60
SPT	87	84	61	59
TACTrans	90	79	72	65
Large urban areas	89	85	72	65
Other urban areas	88	84	63	64
Accessible small towns	91	89	71	62
Remote small towns	94	73	57	63
Accessible rural	88	85	72	58
Remote rural	87	80	56	67

Looking across the range of evidence above, SPT provides the strongest testing ground for an extension of the existing scheme in HITRANS in terms of both public transport and socio-economic characteristics. It is also, generally, the area that is most distinct from HITRANS ensuring that the widest possible range of data is available for future analysis.

The Current Economic Position

This section draws heavily on Scottish economic bulletin: July 2026 - gov.scot.

The Scottish economy grew 0.1% in the three months to April, stable from the three months to March. However, the pace of growth is subdued and continues to reflect business survey evidence showing that business activity and demand remain subdued. In recent months, this partly reflects the impacts of the Middle East conflict on energy and fuel costs faced by households and businesses, and its effect on consumer and business sentiment.

Business conditions have remained challenging with Producer Price Inflation rising to 8.7% in May and business concerns relating to inflation and energy prices remaining elevated in the first half of June. However, business survey data indicates the rate at which cost pressures have risen and their feed through to prices have moderated slightly.

In May, consumer price inflation remained stable at 2.8%, continuing to partly reflect the fall in the Energy Price Cap in April with higher energy prices continuing to be mainly experienced through motor and heating fuels. Despite the fall in wholesale oil and gas prices in June, the spike in energy prices is still feeding through the economy with the Bank of England expecting inflation to rise to around 3% in Q3 2026 and 3.25% in the fourth quarter as the Energy Price Cap rises in July and business costs continue to feed through to consumers.

Scotland’s labour market has weakened over the year, with unemployment at 4.3% and the number of payrolled employees having fallen by 7,600 over the year. Earnings growth nonetheless remains robust, with earnings growing by 5.3% in nominal terms and by 2.4% in real terms.

Reflecting these factors, latest data for May shows some improvement in business and consumer sentiment, albeit mild, with sentiment still notably below pre-conflict levels. The Scottish Consumer Sentiment Indicator rose to a new three-month high, but remains firmly in negative territory. Consumer sentiment is most negative in attitudes to spending and current household finances, reflecting the cost of living pressures faced.

There are specific transport issues currently impacting on the cost-of-living. Fuel prices have increased significantly since February due to world events. See table below (Source, TS analysis of CMA data).

Table 9 – CMA data on Fuel prices (Scotland) (to 16/9/2026)

16/09/2026 data	E5 unleaded	E10 unleaded	B7S diesel	B7P diesel
Average - All Scotland	188.5	172.5	195.4	212.8
Increase in ppl wrt mid Feb	39.8	39.4	52.9	50.4
Avg of lowest 5% of prices	169.3	161.5	182.1	196.4
Avg of highest 5% of prices	205.8	190.2	210.4	228.5

Whilst there has been some variation over the period, prices are back close to their recent peaks. See chart below (same source).

There are also regional variations with prices on the Scottish islands as follows:

Table 10 – Summary statistics of Highland and Islands Pilot as of 8 September 2026

Island LA name	Price type	E5 unleaded	E10 unleaded	B7S diesel
Na h-Eileanan Siar	Average	191.5	176.8	203.4
Range	186.8 - 198	142.9 - 191.0	186.9 - 218
Orkney Islands	Average	170.1	177.0	194.3
Range	145.9 - 178.3	167.0 - 190	159.9 - 208.9
Shetland Islands	Average	174.5	172.8	197.2
Range	167.1 - 181.6	154.5 - 210	162.9 - 220

The constraints on meeting the challenges

Given the cost of living and wider economic position, and the expressed desires of Ministers, a key constraint is the speed of delivery of a scheme that helps passengers. As such, whilst the intention is for the scheme to continue, up to the point where it becomes part of a national scheme, an interim scheme that allows quick implementation is a necessity.

A specific technical issue was the complexity of the current system with multiple operators, zone cards, multi-journey tickets and “Tap-On capping” systems in place for some operators.

Both of these constraints are likely to have an impact on the assessment of options in Section 3 below.

Objectives and Assessment Criteria

The objectives of the project are:

• Enhanced Support for Lower-Income Households: that the fare cap improves financial affordability of bus services, benefiting lower-income households who are more likely to use bus.
• Encourage increased use of public transport with an emphasis on mode shift from private car
• Positive Passenger Experience and Operational Outcomes: that bus operators and SPT report improved operational outcomes and there is passenger satisfaction with the implementation and impact of the fare cap.
• Analytical basis for future National Scheme: Via collection of commercial data as provision of evidence to inform a sustainable, fair and robust approach to reimbursement in the long term for a potential national scheme

These objectives are judged to align well with the FM priorities of:

• Eradicating Child Poverty
• Growing the Economy
• Tackling the Climate Emergency
• Ensuring High Quality and Sustainable Public Services

And also align extremely well with the National Transport Strategy (NTS2) vision that:

We will have a sustainable, inclusive, safe and accessible transport system, helping deliver a healthier, fairer and more prosperous Scotland for communities, businesses and visitors.

Early Evaluation of the Highlands and Islands pilot

The pilot in the Highlands and Islands has been running (with a staged start) since the beginning of 2026. However, the scheme became live in the mainland on 23^rd March 2026. As such it is far too early to undertake a formal evaluation. This is exacerbated by the seasonal nature of bus demand (primarily through Tourism) in the area and additionally means that it is difficult to draw firm conclusions from the initial stage of the pilot, in particular to the SPT area where seasonal travel patterns are likely to be significantly different.

As such this section includes preliminary analysis and draws what implications it can for the extension to SPT. In addition, in this section care has been taken not to reveal commercial data from individual operators

Key scheme outcomes to date

As of 8 September 2026, the validated claims received from operators show that 1.5 million journeys have benefited from fare cap. The vast majority of these (over 1.35 million) are on the mainland. The average saving to users (where the fare was greater than £2) is £6.96.

Note that the figures on average saving fluctuate as different operators submit claims and should be viewed primarily as a snapshot in time rather than a reflection of the end point of the scheme.

A breakdown by geography is shown in the table below:

Table 11 – Summary statistics of Highland and Islands Pilot as of 8 September 2026

Local Authority	Total Journeys Claimed for	Average Saving per Journey (where Fare > £2)
All	1509749	£6.96
Mainland	1360070	£7.48
Comhairle nan Eilean Siar	15175	£1.41
Orkney	101618	£2.75
Shetland	32886	£1.03

Whilst the average saving is around the £7.50 level, there is considerable variation. Long distance journeys offer saving of close to £60 whilst for many short distances savings are measured in pennies. This is reflected in the variation of claims across operators. The table shows the average saving per passenger across different operators ranging from £0.42 to £15.18 with a median average saving across operators of £1.67.

Table 12 – Median, Lowest and Highest Average Savings by operator

Median Average Saving	Average Saving Lowest by Operator	Average Saving Highest by Operator
£1.67	£0.42	£15.18

This is reflected in the savings and journeys per operator being heavily concentrated towards the 3 major operators. The diagrams show the combined share of the 3 major operators (to avoid potential disclosure of individual operator impacts) against the remaining operators. Note the share of some operators is so small that they do not appear distinctly in the diagrams. In revenue terms, the 3 major operators account for over 90% of the combined revenue of all operators in the region. The picture is more mixed than revenue when it comes to journey share which indicates a higher proportion of shorter journeys from smaller operators. The 3 largest operators account for around 80% of journeys across all operators in the region.

Revenue share of the 3 largest operators in the Highlands & Islands compared to other operators:

Detailed analysis has not been undertaken at this stage but some emerging evidence is discussed below.

Nature of journeys

The following 5 diagrams show the ex-ante projected distribution of journeys for the 5 LA areas within the pilot. It is based on concessionary fare data for 2025, so will not reflect either commercial journeys nor August 2026 fares.

Note that this data is residency based so shows journeys undertaken by island residents on the mainland. The data shows that for island Local Authorities, the distribution of journeys is concentrated towards trips with lower fares, which is expected given the generally shorter distance covered by bus services on the islands.

The diagrams show for that for residents within Highland and Moray, there are a greater number of journeys taken on more expensive services, which again is expected given the longer distance than can be travelled on the mainland.

Given the stage of the pilot no rigorous analysis has yet been undertaken of the actual patterns of journeys. However, preliminary analysis suggests that on the Mainland, for the major operators, there has been a significant increase in journeys over £15 compared with the baseline. This early analysis suggests that journeys of this length account for around twice the expected share. At this point this may simply be a seasonal impact – longer journeys (particularly for leisure purposes) are more likely in the summer. Nor is it clear that this effect would be replicated in other parts of the country i.e. the SPT area, due to the specific nature of the geography but it is useful to note at this stage.

Other early findings

At this stage the major additional lessons from the Highland and Islands Pilot relate to technical issues around claims processing. Given the diversity of operators in the area, claims are submitted manually and manually audited by Transport Scotland. This is time consuming and a key lesson learned is to increase the level of automation as soon as practical.

Other, more anecdotal evidence, that is currently available suggests:

There has been positive feedback from Highland Council on the impact of the pilot to date with the Chair of The Highland Council’s Economy and Infrastructure Committee, reporting in June that “since the £2 single journey cap has been introduced in April, the Council’s fare paying passenger figures in the first month rose by 25% and in last month by 36% compared to last year’s passenger figures”.

Comparable data from Highland Council noted a significant increase in passenger numbers on Highland Council ran services from the same period in 2025. Passenger numbers paying the £2 fare on Highland Council buses were 5,727 in April 2026 (compared with 1,631 in April 2025) to. For May passenger numbers were 6,388 (compared to 2,026 in May 2025), for June 6,586 from 1,698 in June 2025 and for July 7,829 compared to 2,605 in July 2025. Whilst Highland Council has introduced seven new routes and the increased patronage cannot be attributed solely to the bus fare cap, even allowing for the expanded network, the scale of the uplift is significant and suggests that the £2 fare is helping stimulate additional bus use.

Data from Moray noted a significant increase in fare-paying use on the m.connect network. Historically, around 95% of passengers using those services travelled free using their National Entitlement Card, with the fare-paying market very small. The more recent figures note a 66% increase in fares revenue, another encouraging indication that the £2 offer is attracting people to the bus who previously were not using these services as fare-paying passengers.

The Highland Council and m.connect experience provides encouraging early local evidence that the bus fare cap is not just reducing the cost for people who would have travelled anyway – it appears to be stimulating additional fare-paying use as well. However, the demand increase figures are based on significant expansion of existing routes (in Highland) and an increase from a tiny base (in Moray) so can and should not be considered as indicative of wider impacts.

Whilst the pilot is run on a voluntary basis, there has been widespread participation from operators across HITRANS and ZetTrans. There are currently over 40 operators taking part in the pilot, ranging from major operators such as Stagecoach and Citylink to smaller and community based operators such as Easter Ross Coaches and Sanday Development Trust. For operators in HITRANS and ZetTrans that are not participating in the pilot this is in some cases due to a lack of existing journeys over £2 or plans to retire/ leave the industry.

Finally, there are social media posts and newspaper reports witnessing the tourism impacts of the scheme.

Conclusions And Rationale For Change

This section has presented a strong overall rationale for change, building on the experience of the pilot in Highlands and Islands.

Compared with other Regional Transport Partnership areas, SPT contains by far the largest concentration of Scotland’s most deprived communities, accounting for approximately 65% of all data zones within the 20% most deprived category nationally. The region also displays the highest proportion of households without access to a car and some of the highest levels of bus and rail usage in Scotland. These characteristics make it particularly suitable for assessing the impacts of a fare cap in a large metropolitan environment and provide a useful contrast to the largely rural and island-based Highlands and Islands pilot.