1.1.1 This report sets out the findings of a review conducted by Transport Scotland and PricewaterhouseCoopers LLP (PwC). The work was commissioned by Transport Scotland (TS) to advance the TS policy towards smart and integrated ticketing. As part of the work, which was primarily carried out between January and June 2010, PwC was commissioned to produce an Outline Business Case (OBC) for smart & integrated ticketing in Scotland.
1.1.2 The analysis carried out was based on HM Treasuryâ€™s Green Book 5-case model1. PwCâ€™s work focused on the current position, an options appraisal and commercial aspects (in Sections 3-8 of the report) of smart and integrated ticketing. Transport Scotland focused on developing the strategic and investment cases and is set out in Chapter 2 and Appendices 2 and 3 of the report.
1.1.3 The analysis considered the components of smart and integrated ticketing. The terms "smart ticketing" and "integrated ticketing" are often understood in a different way by differing stakeholders, but in this report, they should be taken to mean the following, in line with DfT definitions:
- Smart ticketing is defined by DfT2 as where: "the ticket is stored electronically on a microchip, commonly contained in a plastic smartcard[;] tickets are checked by presenting the smartcard to a smart reader"; and
- Integrated ticketing is defined in the same report2 by DfT as: "tickets [which] are valid on more than one operator and/or mode of transport [; these] do not have to be smart tickets."2
1.1.4 This means, by implication, that integrated ticketing can be paper based3.
1.1.5 Smart, integrated ticketing combines each of the elements described in the definition above.
1.1.6 It is important to highlight these distinctions because, as the DfT Smart and Integrated Ticketing Strategy points out:
"while smart ticketing infrastructure can facilitate better regulation, it does not guarantee it[;] however, to install smart infrastructure without further integration would not realise all of the potential benefits on offer".4
1.2 Policy Context
1.2.1 The wider policy context for the report is shaped by three dimensions in particular:
- The Scottish Governmentâ€™s wider economic strategy;
- The Scottish Governmentâ€™s National Transport Strategy; and
- The Department for Transport (DfT) Strategy for Integrated Ticketing in England and Wales.
1.2.2 At a more practical level, the report should also be seen in the context of the progress already made in Scotland in delivering elements of the infrastructure for smart and integrated ticketing.
1.2.3 The Scottish Governmentâ€™s Economic Strategy from 2007 states that sustainable economic growth is the central purpose of all Government activity. The Governmentâ€™s strategic objectives â€“ to make Scotland wealthier and fairer; smarter; healthier, safer and stronger; and greener â€“ are all predicated on bringing about greater economic success for Scotland.
1.2.4 More specifically, the GES states that "an efficient transport system is one of the key enablers for enhancing productivity and delivering faster, more sustainable growth." Underpinning this, a key transport objective is "to provide sustainable, integrated and cost effective public transport alternatives to the private car, connecting people, places and work, across Scotland."
1.2.5 Scotlandâ€™s National Transport Strategy (NTS), published in 2006, outlines three strategic objectives which are focused on creating a world class transport system that contributes towards the Scottish Governmentâ€™s wider purpose of promoting sustainable economic growth:
- Improved journey times and connections;
- Reduced emissions; and
- Improved quality, accessibility and affordability.
1.2.6 The strategy outlines the role of smart and integrated ticketing in contributing towards these three outcomes:
- "We recognise the importance of the journey experience to visitors as well as commuters. Having both simple ticketing and better integrated services and interchanges themselves is vital. There have already been successful local schemes for integrated ticketing in Scotland, for example, Zonecard, Plusbus and One Ticket. We are also in the process of rolling out smart enabled ticketing machines to every bus operator in Scotland, creating a platform to develop new integrated ticketing initiatives. This will support the implementation of the concessionary travel scheme."
- "We want to go further. [Our integrated ticketing strategy] will outline how to secure seamless journeys, between bus, ferry and / or rail journeys by different operators. We will explore the possibility of introducing an integrated ticketing pilot across all modes in partnership with a regional transport partnership or local authority. We intend to harness the new technology and equipment that is already being progressively installed through funding provided by the Scottish Government across the entire Scottish bus fleet to maximise the opportunity to deliver integrated ticketing. We intend to explore the possibility of extending this technology to ferries and trains. We believe this will make public transport more attractive to users and simpler to use. We will continue to push the boundaries of current technology to make pre-paid travel even easier for passengers e.g. by exploring mobile phone technology. This will also speed up boarding times for all bus users."
1.2.7 More generally, the strategy emphasises the importance of high quality interchanges and of improving the overall journey experience. With Scotland hosting the Commonwealth Games in 2014, integrated ticketing forms part of the Scottish Commonwealth Games Legacy Plan5, though the form this takes may well be event-specific and separate from the options outlined in this paper.
Smart & Integrated Ticketing Strategy for England and Wales
1.2.8 The DfT published a Smart & Integrated Ticketing Strategy for England and Wales in 2009. This proposed that coverage throughout England and Wales could be achieved through a regional roll-out of ITSO infrastructure on buses, with the aim of covering major urban centres by 2015. DfT also intends to progressively build in ITSO obligations into the remaining rail franchises where they are not already specified6. In certain respects, this provides a parallel development to that being considered in Scotland.
1.2.9 ITSO has emerged as the only practical way to achieve a secure and interoperable (e.g. between modes, operators or scheme owners) smart ticketing system, particularly in the UK, where the bus deregulation outside London presents particular requirements for interoperability.This has been confirmed by DfT in its Business Plan for 2011-20157 which also addresses interoperabilitywith Oyster in London.
1.2.10 Whilst there are still risks and challenges with ITSO, the appointment of a new Chief Executive in early 2010, allied to strengthening support from DfT, has led to the formulation of a forward plan that should see ITSO expanding, restructuring and taking greater ownership of these risks and challenges. This is particularly encouraging for the Scottish Government, which has already sunk considerable sums into ITSO infrastructure to implement smart ticketing as part of the concessionary travel scheme.
Progress already made in Scotland
1.2.11 Transport Scotland (TS) has already delivered an important component of the infrastructure for smart and integrated travel ticketing through the Concessionary Fares Smartcard on buses. This includes around 1.1m smartcards, 7,100 ETMs and a back office Asset Management and Host Operator Processing System (AMS/HOPS). In addition, First ScotRail (FSR) has piloted a season ticket smartcard on its popular Edinburgh to Glasgow route.
1.2.12 Also, Strathclyde Partnership for Transport (SPT) already operates integrated ticketing products such as ZoneCard, Day Tripper and Roundabout; there are also integrated ticket offerings from OneTicket in East Central Scotland and Plusbus. However, unlike the FSR pilot, these are all currently paper tickets rather than electronic.
1.2.13 Whilst elements of the necessary infrastructure are already in place in Scotland, delivery of the policy commitment from Scottish Government around Smart and Integrated Ticketing would place Scotland at the forefront of public transport systems developments worldwide, joining a small number of other areas including London (Oyster) and Hong Kong (Octopus).
1.3 Conclusion and the Way Forward
1.3.1 This document has been prepared to gather together and summarise the work carried out to date and to draw initial conclusions about the way forward. This allows an evidence-based assessment of progress and direction of travel to be made and also provides the opportunity to highlight those areas where further data gathering may be required.
1.3.2 Significant progress has been made through this project towards articulating how smart and integrated ticketing can be taken forward in Scotland, addressing the short term developments needed, the potential for a phased approach and the need to monitor ITSO development and secure buy-in to roles and responsibilities from bus operators and solution providers. In each of these areas Section 8 highlights our conclusions and next steps towards implementation.
1.3.3 A number of key issues for the business case have been identified, for example, concerning operator incentivisation in a deregulated bus market and future smartcard technology evolution, on which we have had to make assumptions. Part of our work has involved testing those assumptions through greater analysis and stakeholder engagement which in turn has highlighted other issues. The resolution of these issues, summarised further in Chapter 8, will be fundamental to the successful implementation of smart and integrated ticketing.