5 Economic Benefits of CT

5 Economic Benefits of CT


  • CT generates a Scotland-wide social welfare benefit (consumer surplus) for users.
  • The five case studies are estimated to generate £2.8 million per annum in Gross Value Added.
  • CT offers significant cost savings to local authorities, the NHS and other public bodies.
  • CT generates a large number of unremunerated productive hours and provides a pathway to employment.


5.1 The literature review identified a series of potential economic benefits which typically emerge from community transport operations. The user survey and wider research was framed on the basis of the economic benefits identified in the literature review and allowed for the collection of evidence on these impacts from CT in Scotland. This chapter sets out the economic benefits of CT identified through the programme of primary research.

Willingness to Pay

5.2 In economics, the term 'willingness to pay' (WTP) refers to the maximum amount that a buyer will pay for a good. Where a buyer is willing to pay more for a good than it is priced, they receive a benefit known as a 'consumer surplus' - i.e. the buyer's willingness to pay minus the amount actually paid. Note that the purpose of WTP analysis is to try and quantify the value users place on the service rather than trying to establish what the fares should be. In identifying the economic value of CT to its users, one could conceivably sum the consumer surplus of all users to identify a total economic benefit. However, a combination of the sample size and breakdown, lack of consideration of alternative modes of transport and the necessarily simplistic nature of the WTP questions posed in our survey make it difficult to carry out this exercise in practice.

5.3 Due to the elderly nature of the user survey sample, the vast majority of respondents hold concessionary passes and about half the respondents (n=89) are entitled to free travel on the CT service they use. This impacts on the ability to gauge willingness to pay for a service when there is an entitlement and users are accustomed to free travel. There was also a large variation in pricing policies between different case study sites with concessionary passes being valid on certain services but not others. Large variations in distances travelled also affects the fares charged to those that do pay for their trips. Nevertheless across all five case study sites there was a willingness to pay more for their travel by a third of respondents (n=61). The detail by case study site is described below:

  • CTG - 35 respondents travelled for free using concessionary passes while only 5 respondents paid a fare.
    • Of those that paid a fare 2 thought it was about right, 1 a little high and 2 far too high (the fare charged for one of these being £1.85 per journey).
    • About 30% of respondents who currently travelled for free indicated they would be prepared to pay more with a generally accepted figure of £1 - £1.25 per journey being quoted.
  • Order of Malta - Despite two thirds of respondents being concessionary pass holders 85% (n=64) of responses indicate a fare was paid. Fares paid typically ranged from £3 to £7 per journey with the highest quoted fare being £12.
    • Of those that pay a fare 83% (n=53) stated the fare paid was about right. Nevertheless, about a third of these (n=17) indicated they would be prepared to pay more with increases ranging from modest increases of about 10% per journey up to 25% per journey.
    • 12.5% (n=8) felt the fare paid was a little high and a further 3% (n=2) thought the fare paid was far too high.
    • Of the 11 respondents who travelled free, 5 thought the fare was about right and 3 thought the fare was very low. In total, 4 passengers who travel for free were prepared to pay a fare of between £1 and £4 for their journeys.
  • Buchan Dial-a-Community Bus - Despite over 90% of respondents holding concessionary passes, over half of the respondents paid for their journeys using BDACB. The majority pay between £2 and £5 per trip, however, there were three passengers who pay £10, £15 and £25 for their journeys. The most expensive of these is to access medical services. Interestingly, all passengers that paid a fare thought the amount they were charged was either about right, a little low or very low. The highest fare of £25 paid by one respondent was considered to be 'a little low'.
    • 17 out of 40 respondents stated they would be prepared to pay more for their journeys.
    • 5 concessionary pass users who currently pay no fare would be prepared to pay between £1 and £5 for their trips. 1 passenger currently paying £2 per trip would be prepared to double the amount they pay to £4 (for a weekly shopping trip).
    • the passenger currently paying £25 per trip would be prepared to pay £40 per trip (for a journey made once every two months).
  • Annandale Transport Initiative - Just under 90% of respondents hold concessionary passes. However, 55% (n=14) of those answering the willingness to pay questions actually paid to use the CT service while the remaining 45% travelled free using their concessionary passes.
    • 80% (n=21) of responses to the willingness to pay question indicated they thought the fare paid was 'about right'.
    • While the majority of respondents would not be prepared to pay any more for their journey about a quarter (n=6) were prepared to pay around £2 extra per journey.
  • BSCTC - While only 12 responses to this question were received all but one of the respondents were able to travel for free using their concessionary pass for the trips they most commonly made. Of those that received free travel, 5 out of 12 would be prepared to pay £1 more per trip.

5.4 Of those groups responding to the Group Lead Survey the majority (91%, n=39) stated that the fee they currently pay was about right, 7% (n=3) felt that the fee was a little too high and 2% (n=1) felt that the fee was a little too low. Respondents were also asked whether they would be willing to pay more to access the group services. Of those who responded to this question, the majority (66%, n=23) stated that they would not be willing to pay more compared to 34% (n=12) who stated that they would be willing to pay more.

5.5 The willingness to pay of CT users does tend to vary by provider. However, on balance, the survey evidence (although bearing in mind the simplicity of the questions) does appear to suggest that the majority of CT users in both urban and rural areas feel that the fare they pay is 'about right', whilst a significant minority would be willing to pay more. This implies that, at a Scotland-wide level, CT generates a social welfare benefit in terms of a consumer surplus for users.

Access to Employment

5.6 The user survey indicated little use of CT services to access employment by respondents. This is mainly due to the largely elderly sample at all sites who are less likely to be active in the labour market. In total across the five case studies, only 12 respondents indicated that the CT service they used was important to them to access employment. A further 12 responses indicated it was important to them to access education/training.

5.7 Although the number of respondents using the CT service to access employment is low, there was almost unanimous agreement amongst them that the service allowed them to consider a broader range of jobs/study opportunities and helped them get employment which they would not have been able to do without it. Several also agreed it makes it easier for them to get to their place of work/study and increases reliability for the journey. It is worth noting that of those accessing employment, most are engaged in voluntary work.

5.8 Whilst the use of CT for access to employment is small in absolute terms across our case studies, it is important to recognise that three of the providers are in particularly rural areas where employment density is low and even supporting a small number of journeys to work can have a positive benefit in terms of supporting local businesses and sustaining the population base.

Employment & Training

5.9 Table 5.1 below summarises the information on staffing provided by each organisation. As shown all of the core case studies use a combination of paid staff and volunteers.

Table 5.1: Staff & Volunteer Summary Information

Case Study Provider

Staff & Volunteers

Community Transport Glasgow (SPT)

The organisation has 32 employees. Of these 6 are office based, 3 work in the garage (1 full time and 2 apprentices), and 23 are drivers (one of whom is full time and the remainder are part time).

There are approximately 16 volunteers. Of these 5 are board members and the remainder are volunteer drivers. There are 4 volunteer minibus drivers with the remainder working on the Voluntary Car Scheme. Paid drivers cover all services apart from Group Transport and the Voluntary Car Scheme which are staffed by volunteers.

Order of Malta Dial-a-Journey (TACTRAN)

In total there are over 30 employees including 12 full time equivalent drivers working on Dial-a-Bus and 9 full time equivalent drivers working on school transport; 6 support staff; 2 trainers; and members of staff responsible for shopmobility.

There are no volunteer drivers or volunteer support staff. All volunteers work at board level. There are 14 volunteer board members: 3 local authority representatives, 3 members of the Order of Malta, 6 service user directors and 2 volunteer members of the public.

Annandale Transport Initiative (SWestrans)

There is 1 full time and 2 part time staff members who work in the office and one 10 hour post responsible for cleaning and checking the vehicles. All of the drivers and the Board of Directors are volunteers. The volunteers generally work across all of the services provided.

Buchan Dial-a-Community Bus (NESTRANS)

In total there are approximately 50 volunteers and 20 paid staff across Buchan Dial-a-Community Bus and DAB Plus Driver Training. The Community Use and Volunteer Driver Services are provided using volunteer drivers. The remaining services are run using predominantly paid staff, with volunteers stepping in for holiday cover etc. The board is made up of volunteer members. There are also volunteer escorts and 2 volunteer admin staff.

Badenoch & Strathspey Community Transport Company (HITRANS)

The organisation employs 1 full time staff member and 7 part time staff members, two of whom are minibus drivers. There are 150-160 volunteers, 130 of whom are volunteer car drivers, a small number of minibus drivers who fill in on odd days and the remainder work in the office.

5.10 The use of published data sources[2] suggests that the 75 paid staff members (dominated by the more urban providers) across the five case studies generate earnings of £1.467 million per annum, contributing £2.8 million to the Gross Value Added (GVA)[3] of the Scottish economy each year.

5.11 All of the CT organisations provide training to both their staff and volunteers. The five core case studies all provide MiDAS[4] training, with Buchan DACB also providing PATS to its escorts and Annandale TI offering MEET. In addition, the organisations also provide more general training. For example, Badenoch & Strathspey provide a regular programme which has included training on emergency first aid, disability awareness, winter driving, telephony and database management.

5.12 In addition to providing training to their own staff members, each of the five case studies also offer MiDAS (and PATS and MEET in the case of Buchan DACB and Annandale TI respectively) to external organisations e.g. other voluntary and community groups. Providing training externally also assists in developing the skills base in the community and enables the external groups being trained to use their own driver when using group travel services rather than relying on (and paying for) use of a driver provided by the CT organisation. A number of the organisations also provide work experience placements which can lead to permanent employment with bus companies and other organisations.

5.13 Overall, it is clear from the research that the social focus of CT providers contributes economic benefits to the wider community over and above that recorded by the farebox. By providing training in technical disciplines as well as supporting individuals in learning 'soft skills', CT providers are providing both direct employment and preparing volunteers for entry into the workplace. This is of benefit both to the government who gain higher levels of employment and reduced training & social security costs and, in some instances, the companies who then recruit the volunteers.

Benefits for Staff Members

5.14 Staff members identified a number of personal benefits from working in the sector. Many highlighted that they enjoyed the feeling of giving something back and helping others, with particular reference made to the relationships built up with users and the sense of perspective being involved provides:

"The relationship you establish with service users is gratifying. My children have been involved in the organisation and it opened their eyes and allowed them to see different perspectives and to appreciate others situations" (Paid Driver, OOM)

5.15 As a result of funding issues job security was identified as an issue by staff members, a number of whom were employed on short-term contracts.


5.16 Table 5.1 highlighted that all of the core case studies use volunteers in some capacity, with volunteers taking up roles as drivers, passenger assistants, clerical support staff and board members. Volunteers come from a range of backgrounds but generally the majority are older and retired.

5.17 As a result of the varied nature of the roles and different commitments made by volunteers, volunteer hours are generally very variable, with some individuals working on a weekly basis and others only volunteering once or twice per year.

Benefits for the Organisation

5.18 Providers identified a number of benefits of using volunteers. It was noted that volunteers often come to the organisation with a large number of skills developed through their working life and generally have high levels of commitment and enthusiasm:

"Volunteers are there because they want to be. They are very enthusiastic and have a lot of suggestions and are very willing to do things which are going to improve the service for their passengers" (Manager, ATI).

"Our volunteers want to help and we couldn't manage without them. We could not run the organisation without volunteers. They are pretty special" (General Manager, BDACB)

5.19 In addition one provider noted that volunteers have a unique perspective compared to those in a professional capacity:

"Volunteers are able to look at the bigger picture. The professionals sometimes just look at their area. For example a nurse may only look at the nursing element of the care but the volunteers look at the whole picture…the whole individual." (Project Manager, RSVP East Renfrewshire)

5.20 Providers also emphasised that using volunteers reduces the cost of the journeys compared to that of commercial vehicles and this has a consequent benefit for users:

"The feedback we get is that some clients could use alternative transport but because of the affordability they would get out a lot less because they wouldn't be able to afford to do as much as they do with us" (Manager, ATI).

5.21 While the benefits of using volunteers is clearly recognised, it was noted that there is a limit to the demands you can place on volunteers compared to salaried staff members and it is necessary to provide appropriate support and work around what people want and are able to provide:

"Volunteers are available when they want to be available - you are very much in their hands as to whether they can help you". (Manager, ATI).

"Some want to just drive the bus, meet the clients and that's all they want… others want to come in and sit with us and have a cup of coffee and others need the support to recover from an illness… Each volunteer has a reason for doing it ... our job is to find that reason and support them" (General Manager, BDACB)

Benefits for Volunteers

5.22 A number of personal benefits for volunteers were identified. Many of the volunteers were of retirement age and a number commented that their involvement in the organisation provided them with a focus to their day:

"If it wasn't for this I would be sat at home twiddling my thumbs and getting fed up" (Volunteer, B&S)

"Being retired, it just fills my day up" (Volunteer, BDACB)

5.23 Whilst in many cases volunteers participate for their own reasons, there is a net economic benefit to society in terms of the additional (uncompensated) productivity / value added to the economy.

5.24 Volunteers also emphasised the social benefits of being involved and the opportunities it provides to meet and interact with others in the community including staff members, other volunteers and the users of the services. In terms of the latter a number of examples were provided of volunteers forming strong friendships with clients.

5.25 Respondents also highlighted that their involvement had provided opportunities to see different places / take part in things which they would otherwise not have been involved in:

"You get to see other places. I took a group to the science museum. I probably would not have gone there but I went in and looked around. That's another benefit of volunteering like this. You get to see other places" (Volunteer, ATI)

5.26 Volunteering also acted as a support to some individuals. For example B&S noted that they receive a number of referrals for volunteers who have experienced mental health issues and that being involved in the organisation often assists in their recovery.

"Sometimes when they come through the door, they can't even lift their head initially. They have no confidence and they don't know how they can make the first step to pick up the phone. But the difference between then and now is amazing". (Manager, B&S)

5.27 The benefits in terms of training were also noted and a number of the CT organisations were able to provide examples where individuals started as volunteers and eventually moved into paid employment either within the organisation or externally. For example, CTG noted that approximately 6-7 of their current paid drivers originally started at the organisation as volunteers, while a number of other individuals had moved into caring roles in others organisations.

5.28 The data are not sufficiently granular or standardised across providers to measure and monetise the impact of some of the above benefits. However, it is clear that CT providers make a significant contribution to the economy through enhanced productivity, engagement with vulnerable groups and individuals and providing a pathway to employment (with consequent cost savings for the government).

Supporting Local Businesses

5.29 The benefits for local businesses in terms of increased turnover as a result of sales to CT clients were highlighted by a number of the case studies. For example, OOM noted that they had previously undertaken a survey with users of the shopmobility service which asked the customers how much they spent during their day. Based on these figures, the organisation estimated that just one of their shopmobility branches provided direct benefits of £200,000-£250,000 per year. Similarly, BDACB highlighted the importance of its shopping service in enabling people to purchase produce from within the community:

"When we are here the clients go out and do their shopping locally. But if we were not here many of the clients would use Wiltshire Foods [a meals on wheels provider] which is based in England…so it would have a big influence on local businesses" (General Manager, BDACB)

5.30 A number of the case studies also emphasised that they deliberately purchase supplies locally in order to support the local economy:

"We do all our own purchasing locally as far as we can. We shop locally. We use the local community centre for Community fundraisers. We use the local café for lunches etc" (General Manager, BDACB)

5.31 In addition, a number of the organisations work closely with local taxi firms in the delivery of some services. For example, B&S works closely with a local taxi company in the delivery of their shopping service while OOM works with taxi providers to deliver the Taxicard Booking Service on behalf of Falkirk, Stirling and Clackmannanshire Councils.

5.32 Whilst the above is unlikely to represent a net economic gain at the national level (because the benefits may be displaced from elsewhere), supporting small local businesses, particularly in rural areas, is an important aspect of economic sustainability.

Funding & Cost Savings

5.33 Table 5.2 summaries the key sources of funding for each of the core case studies. As shown in the table, the case studies rely on a variety of different funding sources.

Table 5.2: Funding Sources and Costs

Case Study Provider

Funding Sources and Costs

Community Transport Glasgow (SPT)

The organisation receives funding from the SPT via the Demand Responsive Transport (DRT) fund of £100,000 per annum. In 2014 the organisation also received £46,000 of funding via the Transformation Fund for the Volunteer Car Scheme. All remaining external funding is provided via Service Level Agreements. Overall costs total to approximately £850,000 with approximately £220,000 being for vehicle costs, £420,000 for staff costs, £100,000 for direct project costs; £100,000 for support/overhead costs and £3,500 for governance costs.

Order of Malta Dial-a-Journey (TACTRAN)

The organisation received the following funding in 2014 from the three council areas it covers: Clackmannanshire (£60,000), Stirling (£132,000) and Falkirk (£202,000). This funding covers all the services provided except the school transport which is run under a separate contract. The organisation was recently successful in an application to Transport Scotland for capital funding for a contribution to the purchase of a new vehicle. Information on the costs of operation was not provided by the organisation.

Annandale Transport Initiative (SWestrans)

The organisation's total income in 2014 was £134,300. Of this £40,000 was a provided by Annandale Area Committee in the form of grant funding and £21,000 was provided via the Bus Service Operators Grant (BSOG). The remainder of the funding was raised via hire charges, membership fees, fares and training (approximately £45,000), fuel recovery (£22,000) and fundraising/reserves. In 2014, the organisation also received £50,000 of capital funding from the Scottish Government for a new vehicle and used funding from a number of other organisations (including £10,000 from the Hollywood Trust, Robertson Trust, Awards for All, the Garfield Western Foundation and Trusthouse Charitable Foundation) to fund a second vehicle. Total costs in 2014 totalled to £134,300 with vehicle running costs equal to £58,050 and administration costs equal to £76,250.

Buchan Dial-a-Community Bus (NESTRANS)

Aberdeenshire Community Transport Initiative (Aberdeenshire Council) provides 56% of the funding for the Shopping Service, Community Use, TF4, and the Library Service. While the funding is provided on a 1 year basis, there is an agreement with the council that they will roll it over for two years with an RPIX[5] increase. The Volunteer Driver Service is funded directly through social work, Transitions Extreme fund their service and this is topped up though the ACTI fund, Aberdeen City Council fund the Aberdeen runs on a four year contract and the ACVO service is grant funded on a 1 year basis via the Change Fund. The evening runs for young people are funded by the community centres. The organisation also raises its own funds via DAB Plus Driver training, fares and donations. In summary, in the six months from April to September 2014, BCDAB received around £94,000 in grant funding, with around a further £100k coming from fundraising & donations, operating income and hires. Expenditure over this period totalled to approximately £200,000, with administration costs totalling approximately £62,000 and the remainder split across each service.

Badenoch & Strathspey Community Transport Company (HITRANS)

Total costs in 2014 summed to approximately £160,000 however a breakdown of costs was unavailable. The organisation's major funding contributions come from the Local Authority (£40,000 per year provided annually), the Big Lottery Fund (£90,000 per year provided over a five year period) and the NHS (£30,000 per year provided annually). The remainder of the costs are covered through the organisation's own fundraising activities.

Security and Suitability of Funding Sources

5.34 OOM and B&S noted that they have experienced a decline in the level of funding provided by local authorities in the last few years and this has reduced the capacity of the organisations to grow and develop their services. The majority of the funding streams are provided on an annual basis and this was felt to make long-term planning difficult.

5.35 A number of the organisations felt that it would be more beneficial for funding to be provided on a more centralised basis, as is the case with SPT funded services. ATI noted that funding had previously been provided by the Rural Community Transport Initiative (RCTI) but in 2009 this was transferred to local authorities. In Dumfries and Galloway the funding was further distributed via the four Area Committees and was not ring fenced. This, it is felt, has led to a lack of coordination:

"There was no attempt to look at it in terms of the transport requirements of the area. It has not been looked at centrally... some Area Committees only gave revenue funding, some only gave capital funding which was not helpful to those groups who already had vehicles but could not run them and some didn't give any funding. It's been a bit of a shambles"

5.36 B&S and OOM also suggested that a more centralised funding mechanism would be preferable. The local authority funding they receive is provided via the local authority transport departments. However, both felt that this was not the most appropriate arrangement as the transport departments focus on transport resulted in a lack of recognition of the integrated benefits offered and the overall value of the services.

"BSCTC is integrating transport with health and well-being, we have been doing that for years. The local authority department which funds the charity can only fund transport services, but transport is just the mechanism. It just enables us to provide the additional services which improve well-being" (Manager, B&S)

Reporting to Funding Bodies

5.37 In terms of reporting requirements the case studies generally provide information on the number of carryings and distance travelled as well as case studies and feedback from users. CTG also provide information on the number of referrals to other services.

5.38 As part of its reporting requirements, OOM stated that it must sign up to management agreements with specific targets. This it is felt is too focused on ticking boxes and counting the number of trips and does not assess the overall impact on users of the service. It was noted that the council has used a value for money assessment to assess the benefits of the services. However, this focuses on the per capita cost of the trip and does not capture the wider benefits.

5.39 BDACB was the only provider who used a Social Return on Investment (SROI) in their funding applications and reports.

Benefits for Local Authorities

5.40 There was recognition amongst the local authority representatives interviewed, as part of this research of the wider social, health and economic benefits provided by CT. The benefits highlighted during interviews included improving accessibility, providing opportunities for social interaction, contributing to improvements in well-being, savings in terms of social and healthcare costs, providing employment and volunteering opportunities, contributing to the local economy, and providing support for other voluntary and community groups.

5.41 It was felt that CT offered a more tailored service compared to more conventional forms of public transport, with a number of respondents highlighting the door-to-door nature of the services provided and the additional assistance offered (eg help on and off the vehicle/ carrying bags etc). From a financial perspective, a number of respondents noted that they felt CT services provided value for money, with the Highland Council noting that a previous social return on investment analysis they undertook, found that CT could provide benefits of 4-5 times the initial investment.

5.42 As a result of the very different nature of the services provided, consultees explained that direct comparisons between the costs of CT organisations and equivalent commercial costs were difficult. However, CT services were generally felt to be less costly, with the Highland Council noting that it would be unable to afford to provide the quality of services provided by CT organisations via commercial operators as a result of the considerable costs. This sentiment was also reflected in comments made by some of the staff and volunteers during focus groups, for example:

"They are getting a very cheap service because for commercial vehicles 65% of the cost is for the drivers wage … there is no driver wage here. We were given £28,000 by Dumfries and Galloway Council for this council year. £28,000 wouldn't cover one driver's salary" (Volunteer, ATI)

"116,000 miles that's roughly equivalent of 3000 hours of driving never mind how long it takes to get people on and off the vehicle. That is a lot of time that is not being paid for which if we were not here and the local authority were trying to provide that, it would be a substantial cost" (Volunteer, ATI)

5.43 Crucially, at a time when a number of local authorities are consulting on making efficiency savings, CT is offering a ready-made solution to the often unsustainably high costs of conventional transport. Were it not for the presence of CT providers, it is not inconceivable that some areas would suffer transport and accessibility poverty, potentially undermining community sustainability, particularly in rural areas.

5.44 However, while the wider social and health benefits of CT were recognised, on the whole there did not appear to be high levels of integration between the transport and social work/healthcare departments. Dumfries and Galloway Council provided one exception to this. It has recently set up a Rural Transport Solutions Project which encourages CT organisations to provide school and social work transport on behalf of the Council. The CT organisations are paid commercial rates for the services and are also provided with access to Council vehicles outside of the contracted hours (approximately between 9:00-15:00). The Council identified reduced cost as a key benefit of this approach.

5.45 Overall, however, the general absence of such a joined-up approach means that CT funding (both in terms of the absolute level and means of distribution) can often 'slip through the cracks'.