Official Report 391KB pdf
I open today's meeting of the Local Government and Transport Committee. Only one member—Sylvia Jackson MSP—has intimated apologies. I believe that Elaine Murray MSP will substitute for her later in the meeting.
In opening proceedings, I will reflect on several transport issues, but I note at the outset that only two substantial changes have been made to the budget, both of which relate to transfers. If that is of interest, we can deal with it.
Thank you, minister. I will open the questioning and then bring in other members. My first question is on the M74, to which you referred. Do you have any indication of the financial impact of the delay in starting construction? If so, has the Executive's transport budget taken that into account?
I will ask Malcolm Reed or Guy Houston to deal with the detail. We are aware of the delay and have budgeted for it. As the convener knows, the delay was caused by court action. Any Government would, of course, have to deal with that situation appropriately.
The delay has not had a significant impact on the spend. Obviously, we have lost the economic benefit that the earlier completion of the scheme would have brought. That is the primary impact of the delay. As the committee knows, we are pressing ahead with the project.
Do you have any figures for the economic loss to the west of Scotland or Scotland in general?
We can get the figures to you. We have the calculations, as they were prepared for the court case.
Another potential major transport infrastructure project is the replacement—or second—Forth road bridge. I am aware that a lot of work is under way to assess the condition of the existing bridge and that the Executive is engaged in that work. If it becomes necessary to commission a new bridge—whether as a replacement or a second bridge—is the Executive's transport budget sufficiently flexible to enable an early start? I am thinking in particular of the flexibility to undertake the preparatory works that will enable the project to get under way.
As the convener knows, we have begun the work that needs to be done at this stage to ensure that there will be no delay if the assessment of the bridge's condition proves to be the worst case scenario. We all hope that that is not the case, but I assure the committee that work has begun—through the strategic transport projects review, for which Malcolm Reed is responsible—in relation to the preparation that would be necessary for a second crossing. That will allow ministers of the day to take the appropriate decision with the fullest information.
The minister said that the costs in respect of a new Forth crossing have been factored in to the budget for the strategic projects review. What amount has been factored in and in which financial year or years?
I did not say that the costs of a new Forth crossing have been factored in. I said that the cost of the studies that we are undertaking—that is what the convener asked about—have been factored in and accounted for in the current budgetary procedures.
Now that the minister has said that no actual costing for a crossing is factored in to the strategic projects review, will he explain what work has been done by Transport Scotland?
First, I did not say something different. I am not going to have Mr Ewing twisting my words in the way that he just implied.
I still do not know exactly what work is being done. Is Mr Reed able to expand on that and explain what work is being done? The Scottish Executive has not made a press announcement on the matter for some time, but it is obviously a massive priority for the entire transport system in Scotland. Can Mr Reed tell us what is happening?
We said that we would do the preparatory work, which is an important aspect of being ready and providing ministers of the day with the fullest possible information that they could need at the time. We said that that would be in the context of next May or June and that the matter is important in the context of the spending review because of the enormity of the spending decisions that ministers might have to take.
If I can expand on what the minister said, we are taking forward the Forth crossing work as part of the strategic projects review. It is a separate work stream within that review and the consultants who were appointed in August are already making good progress. In fact, when I left the office to come to the committee, a meeting was taking place between our staff and Forth Estuary Transport Authority staff about the way forward. The consultants have started work. They have been in the job for only six weeks and there is a lot to do, but we are ensuring that we take the work forward as quickly as we can.
I want to ask about budgetary implications. As the minister said, this is a serious matter. A Forth crossing will not be cheap, whether it is a bridge, a tunnel or whatever. However, a new crossing is a priority for the whole of the Scottish economy, not least that of Fife, which is already beginning to suffer because of worries over the closure of the existing bridge to heavy goods vehicles by 2013.
I genuinely think that it demeans the budget process if a member abuses his position as Fergus always does. He has just done so again to make a series of party-political observations. We have plenty of opportunities to debate such matters in the chamber.
I want to move on to another area relevant to the budget, but I am aware that other members might wish to come in. However, I will take the minister's answer as a no.
I want to focus my questions on target 10 in the draft transport budget, which is
I admit that the budget process can be a bit bizarre, but we are accountable for this set of targets and for the way in which we have spent money in meeting them. I accept the challenge posed by the committee to look closely at the targets, and we will continue to do so. Given the importance of safety on Scotland's roads, I am more than happy to engage in a process that leads us towards more exacting standards and targets. I accept that challenge.
I want to focus on one particular aspect of road safety. The Executive is constructing two grade-separated junctions on the A90 between Perth and Dundee, to add to the two that have already been constructed on that stretch. As I drove past them this morning, I saw that they were well under way. Those junctions will undoubtedly help road safety.
Malcolm Reed will deal with the specifics and I will deal with the more general points. Our programme is full. We could switch spending—and a switch is what it would be—away from other areas of capital transport spending towards more grade-separated junctions. We would undoubtedly gain in road safety terms from such a switch, but there is a balance to be struck. There is a judgment call as to how many junctions we can have in our programme at any one time and where they should be, which is why any minister is dependent on road engineers and road safety advice to make the list of priorities clear.
I confirm that the process is as the minister described. We will examine the road accident statistics and, if we see a cluster of accidents that causes concern, we will investigate it and bring forward proposals. Ultimately, we face two constraints. One is the budgetary constraint. The other is the need to allow time to design a scheme and possibly acquire land and so on. We share the member's concern. Road safety is a very high priority, but we must follow due process to get schemes into the programme.
Your point about due process is important. The minister was helpful in saying that due process will take account of changes in road safety. I want to be clear in my mind that you are not saying that there cannot be any changes until after 2012. That is my key question.
I confirm that changes can be made before 2012. The only caveat that I offer is that it would take time for a scheme to be designed and to go through the necessary statutory procedures.
Do you think that we are getting value for money from the bus services operators grant? The latest figure for the grant, for 2006-07, is £56 million. The figure for the next year is £57 million.
Like every area that the transport group is reviewing, the bus services operators grant is under review in the context of the national transport strategy. As part of that strategy, we hope to present a bus action plan to Parliament later in the autumn. I assure Mr Martin that we are looking closely at spending on the grant and at how what we get out of it relates to what we expect. John Ewing's team has the matter under active review. At the moment, we think that the grant is delivering, but I take the point that we need to keep such matters under review.
The draft budget states:
The most recent survey showed strong support for bus services throughout the country. John Ewing can provide details of who carried out the survey and of the sample size, because it is important to provide appropriate context. We would be happy to share the survey evidence with the committee. Much of it is already in the public domain, because it consists of statistical information that has been published. We can go only on evidence that we have received.
Do you appreciate that the issue is not the quality of services? People are happy to have bus services. The difficulty is that in many cases they do not have services in the first place. On a number of occasions, the point has been made to you that we are providing £57 million in bus services operators grant to an industry that is clearly not responding to the needs of local communities. The draft budget states that the grant is intended to reduce the need for increases in fares and to reduce the burden on local authorities of providing services for socially excluded groups. Do you accept that operators are not delivering in that area?
I accept that there are different circumstances in different parts of the country. I am sure that Mr Martin shares the view that in some areas there are clear signs of success and progress. As is appropriate, he and other members from the west of Scotland, in particular, have highlighted on a number of occasions the deep concerns that exist about the level of service in that area, especially in the evenings and at other times when the commercial sector is failing to provide the service that we need from the perspective of social inclusion and a number of other policy objectives. I accept that point in relation to various parts of Scotland. We are seeking to tackle the problem through the on-going review of the national transport strategy. We hope that we can put in place a series of mechanisms that will give national Government, local government and regional transport partnerships more flexibility to work with operators to find the best mechanisms for delivering in such areas. We will do our best to do that and to keep members up to date on what is happening. [Interruption.]
I suspend the meeting until the fire alert is over. We can remain here.
Meeting suspended.
On resuming—
I reconvene the meeting. I apologise to committee members and members of the public for the inconvenience that has been caused by the fire alarm—obviously we must take all necessary precautions when the alarm sounds.
What additional funding has been set aside to improve disabled access at train stations?
No specific additional funding has been made available in the budget for disabled access at train stations, but we are closely examining the matter in our consideration of the First ScotRail franchise and Transport Scotland's budget generally. A considerable number of demands to improve access for people with disabilities have been made. Fair requests have been made to upgrade and improve access facilities for disabled people in many stations in the country and I hope that we can make proposals in that context soon—certainly in time for next year's budget process.
Who is responsible for upgrading disabled access in train stations? It seems to be expected that First ScotRail will make improvements, but it seems to be saying that it must apply to the Scottish Executive for funding for such improvements. Will you clarify once and for all what the process is?
I invite the gentlemen from Transport Scotland to answer that question.
Disabled access is a reserved matter. The funding for our work in Scotland on disabled access therefore comes from the Department for Transport. We have a proportionate share of a Great Britain-wide pot, which we are using. We prioritise stations according to the volume of passengers that use them and line-of-route considerations. The minister made the fair point that, through the franchise and the other funds that are at our disposal, we have an opportunity to supplement the funding from the DFT. We will work on proposals along those lines.
What timescales are attached to that work? I have asked the same question consistently for the past three years, but the consistent answer that I have received is, "We are looking at this." Can we have a more definitive answer? You have clarified the areas of responsibility, but my understanding is that the Executive has a role in providing funding, given that train station improvements are a Scottish Executive responsibility.
That is broadly correct. Within the franchise, First ScotRail made provision for improving disabled access. Under our programme, several stations are being dealt with. I can let the committee have information on which stations are involved and what the criteria are. The programme is a rolling one—we cannot address everything at once because of funding constraints. However, we will do our best to make progress on the programme.
For the past three years, I have been assured that we will get some kind of timescale. We have all the targets that have been set out for improvements, so surely people who are disabled are entitled to be advised about when they can expect to get access to the stations throughout Scotland to which they currently have no access.
To give a bit of context, I say that it is barely a year since the devolution settlement on rail matters. We had to sort out with the DFT the amount of funding that was to be made available to Scotland and we now have to develop the programme. We are doing that as quickly as we can. I can give the committee more information on that in due course.
You have given a commitment that you will make progress "in due course", but I like to think that, next year, we will certainly not get the same answer—which is that you are considering the issue. You will appreciate that changes must be driven on so that people who deserve to have access can at least be advised of what targets have been set. People appreciate that we cannot deliver the entire programme within a short space of time and they know about the investment that is necessary, but they are entitled to information about when the capital improvements will be carried out.
I will make two comments by way of clarification. First, the use of the words "in due course" was perhaps unfortunate. We have named stations that are currently being dealt with in the programme. I will make the details of that programme available to the committee.
In drawing up the draft budget and in looking ahead to future years, is it still the minister's and the Scottish Executive's view that there is no need to prioritise any of the major transport projects to which commitments have been made, irrespective of changes in circumstances, such as the cost of the projects?
We have a programme, which I laid out in Parliament on 16 March this year. It builds on the programme that Iain Gray announced originally and that has been worked on further by successive transport ministers. One of the strongest aspects of the process is that we have laid out the budget and said what we are going to do. We are making progress with the programme. We have said that the strategic projects review will examine the period from 2012 onward and that it will come up with the priorities for that period. However, we fully intend to deliver all the projects in our current programme—we have budgeted on that basis.
Given the uncertainties and pressures, would it make sense to state publicly and expressly that, although we want to deliver all the projects to which we are committed, they have nonetheless been prioritised so that, in the event that unforeseen circumstances—or, indeed, the foreseen circumstances to which you alluded—were to put significant pressures on the budget, we would have at least a clear idea of which projects will be delivered first?
I almost thought that Mr McLetchie was about to drag me into a Donald Rumsfeld moment by asking about unknown unknowns.
In preparing next year's budget and in looking ahead to delivery of the transport capital projects with all the attendant cost pressures that we have discussed, did you have the benefit of being able to look at the report of the independent budget review group, which was commissioned by the Minister for Finance and Public Service Reform but has not yet been published and is not to be disclosed to us until September of next year?
I certainly looked at the part of the report relating to transport.
Does not the report look at the budget as a whole and indicate where savings might be made that would benefit the transport budget overall?
The important point about the report is that, on behalf of the Minister for Finance and Public Service Reform, it feeds into the spending review of summer 2007, when ministers will need to take account of the report's recommendations and the on-going work in which the budget reviewers are still involved. The review will certainly present ministers with options on capital and revenue spend.
May I ask a couple of specific questions before other members go on to other issues?
You may continue as long you are fairly quick.
The budget contains an operating subsidy for ferry services. Do you anticipate that the tendering process that is currently under way is likely to result in an outturn that will save money, or the reverse?
To be blunt, I do not envisage a saving. As Mr McLetchie and other committee members will know, the position on Clyde and Hebrides ferry services has, in effect, been determined by the maritime cabotage rules, in which Parliament has rightly taken an interest over the past couple of years. It would be foolish to say that the process will bring us savings; I have no confidence whatever that it will do so. We must go though the process, which will be robust, appropriate and proper. We will ensure that the process is carried out in line with the requirements that are laid upon all Governments that are required to follow the maritime cabotage rules. However, I have my doubts as to whether it will save us money.
My final question is on money-saving measures for rail services, which is an issue that was picked up in the committee's report on last year's budget. First ScotRail has put considerable effort into revenue protection measures. In plain English, that means stopping people dodging their fares—or skipping their fares, as it used to be called when I was at school—for their journeys. Have those efforts resulted in an increase in revenues to First ScotRail and what impact has that had in respect of savings for and benefits to the Scottish Executive and the taxpayer?
First ScotRail has had an increase in revenue. I will get Malcolm Reed or Guy Houston to deal with the figures. I read the other day an attack on us in one of the north-east papers for not ensuring that ticket barriers were in place in Aberdeen, Dundee and other places. It seems that the barriers are popular nowadays, so we will ensure that they are in place in Aberdeen very shortly. The direct answer is that the measure has raised revenue. Perhaps the gentlemen who are with me can share the figures with the committee.
I would not like to give a revenue figure off the top of my head. We are talking about a growth in total passenger numbers over two years of 23 per cent. I suspect that some of that increase represents travellers who had not previously paid their fares. The contract provides for revenue sharing between First ScotRail and the Scottish Executive once a certain threshold has been reached. We are very close to that threshold, but I do not want to say more because we would be going into commercially confidential matters. There should be a benefit to the Scottish Executive as a consequence.
Is it right to say that it will always be the case that if enhanced revenues arise from revenue protection measures, we—the public and the committee—will not know the benefit that that will bring for the budget?
I would like to take advice on that. There will certainly be outturn figures that reflect that, but I would not like to quote percentages at this stage.
We will examine the figures to see what we can share with the committee. If members have more questions, we would be happy to try and answer them. That was a legitimate question.
We would welcome a detailed response. The matter is one that members legitimately wish to be aware of on behalf of members of the public, in order that we can ensure that we are getting value for money from the franchise arrangements.
I agree and I accept that.
My question follows Mike Rumbles's question about accident reduction. Although I accept that major projects such as grade-separated junctions have had an effect on road accidents, what specific measures does the minister believe the Scottish Executive has taken that have led to a reduction in accidents on roads other than the ones that Mike Rumbles mentioned? I am thinking specifically of roads in the north-east, given that every Monday morning the papers report three or four accidents that have occurred on other A roads or B roads. What measures does he believe the Scottish Executive has taken to alleviate the problem, given that a report indicates that a significant number of our roads are in amber or red condition?
I will get Guy Houston to deal with the point on road conditions that was made in the Audit Scotland report, which I am sure Maureen Watt is reflecting. We will do so fully because we want to address the issue; I am grateful to Maureen Watt for raising it today.
The Audit Scotland report suggests that £325 million is required to bring the roads up to acceptable standard. I want to clarify the exact definition of "acceptable standard". It is noted in the report that £325 million is required to bring the roads from close monitoring to normal monitoring. That means moving from the normal monitoring procedures that are in place as defined in the roads manual, which says that, under normal conditions, based on asset life, the condition of the road, surveys, reviews and so on, £325 million is required to move from closer inspection. We never go below closer inspection or monitoring. All our roads meet a standard that is defined in the roads manual. The £325 million that is quoted is for bringing that up to a standard that would take roads off close monitoring.
What is the difference between close monitoring and normal monitoring?
That depends on traffic volumes. In the middle of the M8, normal monitoring takes place much more often than it does on the Fort William to Mallaig road, for example. Normal monitoring on trunk roads or motorways can often take place daily, and close monitoring would happen more than daily there. On some trunk roads up north, normal monitoring takes place once a month. It is completely variable, depending on traffic flows and volumes. It is to play with words to say that roads do not meet an acceptable standard—they always meet an acceptable standard as defined in the roads manual.
If you do not think that the figure should be £325 million, how much is required to be spent on our roads? Clearly, the public realise that many roads are deteriorating.
All our trunk roads meet the minimum standard. We are keeping a very careful eye on £325 million-worth of roads spending.
You say that your
Table 6.11 in the draft budget document shows that the roads budget increased by £60 million in the budget year that we are discussing. As Maureen Watt well knows, it is not for central Government to tell local government what to do with its grant-aided expenditure. That is not the job of any of us around this table, in my view. Those are matters for local determination by local councillors. If Maureen Watt has an issue with council spend, she might wish to note the budget numbers and then discuss the priorities in the areas in question.
Are you saying that the extra money that you have given is enough to bring the roads up to an acceptable standard?
I used to be a councillor, and I know fine that decisions are taken on spending priorities for within the local authority area. It would always be nice to have more money to spend in every portfolio area, but locally elected politicians must make judgments about the spending priorities in their areas. As Maureen Watt should know, we met the full bid from the Convention of Scottish Local Authorities in relation to road expenditure in the latest spending review period. We look forward to receiving a COSLA submission in relation to the next spending review period. We met the last one in full.
On the delay with the M74, you said that the unspent money has been used elsewhere. There is a seven-year delay with the Aberdeen western peripheral route. Where has the money for that been hived off to?
I do not accept the term "hived off". In the context of budget monitoring, the M74 project was earmarked for budget spend from year to year, so funding was available to be spent. It was not envisaged—quite fairly, in my view—that there would be a delay due to court action. That happened, so there was a year's delay. That allowed spend to be profiled, which is what any public agency does, whether it be Transport Scotland, Government portfolios, local government or another public agency. In the profile of spend, reallocations were made to meet other transport spends. I think that that was advantageous and was a good use of taxpayers' money. I assure Maureen Watt that no money has been "hived off" to other projects in the way that she describes.
So, once a decision is taken on the route of the western peripheral route, the money will be there to get the project up and running as quickly as possible.
The money will be available once the project has gone through all the statutory processes, including, I am sure, a local public inquiry next year. We envisage that the contract will go through its formal processes during 2008, with construction starting in 2009. Appropriate budgetary provision will be made in forthcoming budgets.
My final question is on concessionary travel. I refer to the appendix to the Audit Scotland report on the partnership agreement and your high-level commitments, a number of which relate to extending concessionary travel. We already have concessionary travel schemes on buses and there are commitments to provide concessionary travel for people with disabilities and young people in full-time education and training. What progress has been made on those commitments?
We hope to make an announcement on that in the next few weeks. We have had constructive and sensible discussions with the industry. We have to have an industry agreement as to how such schemes would work. The process has taken rather longer than I would have liked, but it was ever thus. We will get there and will we make an announcement as soon as we can.
I want to follow up Maureen Watt's question on concessionary travel. Table 6.06, on page 90 of the draft budget, shows that the budget for concessionary fares in 2006-07 is £185.338 million. In 2007-08, the plan is to spend £189.338 million. That would indicate no more than an increase in line with inflation. Does that imply that there is no provision for an increase in uptake?
For the national concessionary travel scheme, we have budgeted conservatively with regard to expected uptake and have taken into account an increase in uptake. The budgetary calculation was made in conjunction with the industry on the basis that there would be an increase in uptake.
My follow-up question is similar to Maureen Watt's. Where is the money for other concessionary schemes, such as for young people, going to come from, given that there is no indication of that in the budget plan?
There is a separate line that relates to the young persons concessionary scheme. In the current financial year, the budget for the national scheme is £159 million and for next year it will be £161 million. Those are the figures that my predecessor announced in Parliament and which we have stated on numerous parliamentary opportunities since. They take into account both uptake and the industry and Government's financial arrangement in relation to the scheme. I assure Michael McMahon that money is available for the young persons concessionary scheme, as budgeted for, which we will identify formally for the committee.
It is not clear in the document that in 2006-07 the figure includes start-up costs to get the national old age pensioner, disabled and young persons schemes started up, which are primarily the costs of ticket machines for operators. You do not see that included in 2007-08, which is the main reason why you do not necessarily see the growth. We are spending a load of money in 2006-07 on ticketing equipment and start-up costs. In 2007-08 we will spend it on the growth in uptake instead.
It would be useful if we could get a clear indication of what is available for the young persons scheme and whether it is in a separate line, or is in the same line, but is clouded by the investment in ticket machines. Could we get that in correspondence?
My understanding is that the figure is £24 million, but we will confirm that in correspondence.
My next question is on emission reduction equipment. In the period up to 2006, the Executive spent £4 million on schemes such as the cleanup Scotland programme and the powershift programme, which seemed to have had a beneficial effect. In 2005, time was taken to revise and evaluate the schemes in order to decide whether they should continue. Has that evaluation been made and will the schemes continue? Alternatively, are there plans to deliver on air quality commitments by a different method and, if so, what would be the budget for that?
I will have to write to the committee with the detail of that. Those schemes have been under review for some time, and it is arguable that the process needs to come to a firm conclusion. I am focused on the best mechanisms that we have for improving air quality and reducing emissions. Some of that work—in relation to cleaner fuels, for example—is with the industry; there are a number of United Kingdom-wide schemes in that regard. Other commercial developments are being progressed by the energy companies; we see those on our forecourts, never mind anywhere else.
I want to try to make sense of some of the figures in the document that are linked to some of your objectives and targets. In relation to the revenue protection measures, especially the automatic ticket barrier schemes, Malcolm Reed mentioned a growth in rail passenger numbers of 23 per cent over two years. Is that correct?
Yes. That is correct.
You think that some of that is due to people who were using the railway services anyway being caught.
Yes. That is a fair assumption.
That is over a two-year period.
Yes.
Your document talks about the target of increasing the number of passenger journeys on the Scottish rail network by an average of 2 per cent each year. Do you not think that that is a small target, given what you have just said?
Yes. That is a fair point. We are aiming at exactly that. However, the target is not exact enough; we need a more aggressive target in that area.
Do you think that the savings that are being generated, in relation to the franchise agreement, from the installation of the automatic ticket barriers—I think that they will be installed next in Aberdeen and Dundee—are as much as £500,000 or £1 million a year?
I would not want to venture a guess—and it would be a guess. It is an area of conjecture.
Perhaps the minister will comment. I corresponded with him on the matter and he said that the cost of installing and operating the automatic ticket barriers was £500,000 a year. He also said that the savings to the Executive were significantly in excess of that cost. Somebody somewhere has made a calculation, and I wondered where those savings are reflected in the budget figures.
I hope that Mr Sheridan accepts that, as Malcolm Reed said to the convener, it would be probably inappropriate and certainly unwise to speculate on the figures. Mr Sheridan asks a fair question, and the convener touched on the point earlier. We will write to the committee on the issue. I accept and understand that the issue is of concern and interest to members. We will see what we can do after taking the advice that we must take—although we may not like it—in relation to the commercial relationship between us and First ScotRail. We will furnish the committee with a full answer on that point as best we can.
I appreciate that. However, in May, when you last corresponded with me on this matter, you said that the savings had resulted in a substantial reduction in the franchise payment. Given that we are paying more than £260 million a year, I hope that any substantial reduction would amount to millions of pounds. It would be very helpful if we could get that figure as soon as possible.
Those details are commercially sensitive. I was not directly involved in the discussions on this matter at the time, but as I recall, Parliament quite rightly took a lot of interest in the matter when the franchise opportunity was advertised, the bids processed and the franchise itself let. I am sure that a number of my predecessors made clear what details could and could not be put on record. I appreciate that that is probably not the answer that Mr Sheridan is looking for, but it is the factual position.
Where does the budget reflect the increased revenue to the franchisee from the installation of automatic ticket barriers? I believe that there is an equation in which any increase in revenue is divided between the franchisee and the Executive.
I am not sure that we can answer that question today. I wonder whether we can respond in writing to the specific questions and to the general point that has been made.
I might be able to help. When the franchise was let, a commitment had already been made to install some ticket barriers. The franchisee made an assumption about the business case for installing other ticket barriers, which would have been factored into the bid cost. Therefore, what is in effect the price that we are paying for the franchise will be reflected in the total bid cost.
I am sorry to return to this question, convener, but I am concerned that the money that the Executive is spending on improving the rail service is resulting in increased profits for a franchisee. I thought it had been agreed that if target revenue increased by between 2 and 6 per cent—which, given the 23 per cent increase in passengers, seems to be the case—the operator would retain 50 per cent of the increased revenue. Is that the case, or not?
I think that two figures are being confused. The target revenue figure is an internal Scottish Executive figure. The franchisee would have made its own assumptions about revenue growth in bidding for the franchise, and any revenue share calculations are based on those figures.
Of course, the installation of barriers at certain train stations is not solely responsible for increases in revenue or passenger numbers. Any such increase might also be a result of factors such as economic growth or the promotion of public transport.
That is a very fair assessment of some of the reasons for passenger growth. For example, significant growth has been experienced on the Larkhall to Milngavie line, which was mentioned earlier, not because automatic ticket barriers have been installed, but because it has been promoted.
In the written response that you will provide on costs and so on, will you also indicate the extra revenue that the franchisee receives from ticket barriers?
I am not sure whether we can. As the minister said, some details are commercially confidential, while others are based on the bidder's own assumptions. It will be difficult to disentangle the revenue growth that its bid ascribes to particular items of investment.
Rather than continuing down this route, it would be better to accept the minister's commitment that he will try to give further detailed information to the committee, in response to both Mr McLetchie's initial question and Mr Sheridan's questions. We should give the minister the opportunity to bring together that information in as open and transparent a manner as he is able to. It will then be up to committee members to decide whether they are satisfied with that response; they can raise further questions, if necessary, at that point.
We all supported the development of the Airdrie to Bathgate line. Where is the cost of the rolling stock reflected? Is there an overall or a specific figure?
I will be corrected by my colleagues if I am wrong, but I assume that the figures relate to the construction of the line. As I said in Parliament on a number of recent occasions, it is our intention to factor in to the procurement of rolling stock for the network the needs of the Airdrie to Bathgate line. Malcolm Reed will keep me right here, but I assume that the figures for rolling stock procurement are not directly in the budget for the Airdrie to Bathgate project, which is for the construction of the line.
What is the cost of the rolling stock?
The figure is under negotiation, because we will not know the cost until we conclude the commercial contract and announce the successful bidder for the contract to provide new rolling stock for the whole Scottish network. I appreciate that it will be a matter of considerable interest to Parliament, which we will keep updated. The cost of necessary budget spend in that area will be in future budget documents.
I have two final points. I corresponded with the minister and the previous incumbent about the nature of the contract with franchisees on indemnification for industrial disputes. Is it the case that the Scottish Executive has now carried over that responsibility from the former Strategic Rail Authority? In other words, do we agree to indemnify a franchisee for losses that are incurred during industrial disputes?
Yes.
I add a note of qualification. The franchisee has to pass a test of reasonableness in such a situation.
Who judges that test of reasonableness—the Executive or the Parliament?
Ultimately ministers will do so, but they are by definition accountable to the Parliament.
There is a significant increase in expenditure in 2006-07; I assume that that reflects increased devolved powers over the network. To whom are ministers responsible for that increased devolved power and expenditure?
To the Parliament and this committee.
As the minister knows from his extensive visits to Inverness, the route connecting the main trunk routes—the A82, the A96 and the A9—which is known as the trunk link route, is presently the local authority's responsibility. However, a wide campaign that is supported by all parties locally calls for the route, which would create a ring road or city bypass for Inverness, to become a trunk road. The obvious corollary of that is that the Scottish Executive as opposed to the council would then be financially responsible for it.
I have read recent editorials in the Inverness Courier with great interest. I take Mr Ewing's point about the broad support for that investment proposal. I am certainly considering it and we will see what we can do. I recognise that the project is important for the development of Inverness, which is one of Scotland's fastest-growing cities. Given that, we will of course keep such matters under review.
I am grateful for that answer. I think that Inverness is the fastest-growing city. It is the fifth largest, but perhaps it has ambitions to move up the league table.
Is that only because Livingston is not designated as a city?
Competing bids always exist, no matter how flimsy.
It is inappropriate to make a simplistic analysis of the commercial world and I counsel Mr Ewing against doing that. We are dealing with a competitive commercial world. One company will have one perspective on it, but companies that have commercial contracts with that company will have other perspectives on it. Mr Ewing may have been briefed about one side of the commercial equation, but that is not the only side to that equation. The Government must weigh up different aspects and different relationships and must take—as best any Government can—an overview of the contractual arrangements that are in place. Transport Scotland is responsible for that.
I hope that the minister knows that I have pursued the issue not off the cuff but over a long period in the committee, in evidence, in correspondence and through a freedom of information request to Transport Scotland that has not been answered yet. What part of my analysis was simplistic? I say with respect that I do not believe that my analysis is simplistic.
The simplistic piece of Mr Ewing's analysis, as I have tried to point out to him, is that he has failed to recognise that we do not build rail lines just for one company, which is what his line of questioning suggests. We do not do that for the line that we are talking about today and we do not do it for any railway line. We build the rail infrastructure for the benefits that it will bring to the rail network as a whole and for the freight market, on behalf of all the commercial companies and businesses across Scotland that look for competitiveness between rail and road. We build it because we hope that it will encourage commercial operations through that network, to provide a more cost-effective service and to provide an alternative to the road. To suggest, as Fergus Ewing has done, that we have built that rail line just for EWS is simplistic, I am afraid.
With respect, minister, I did not suggest that at all.
You have just changed your mind, then.
I simply said that, substantially, the justification for the line was that new paths would be created by taking that huge freight traffic of coal off the Forth rail bridge. Given that that was a substantial justification—everybody accepts that—why did not the Scottish Executive get the agreement of EWS before it went ahead, rather than after going ahead? Now the Executive is in a situation where it has no legal entitlement to claim extra charges from EWS, as far as I am aware. If the minister can point to any specific flaws in my argument so as to educate me, as he is obviously anxious to do, perhaps he can tell me exactly what the flaws in my analysis are. I have followed the matter carefully for a long time and it seems to me that the Executive is in a muddle of its own devising.
I could not begin to educate Mr Ewing. It would be quite beyond me to do that. I always bow to his ever-superior knowledge on all aspects of Scots law. I repeat that we do not build rail lines for one company. Mr Ewing began his question, once again, by saying that it was a matter of creating paths and moving coal around Scotland, and then he returned to his argument about the one company that he is determined to point to. I will not add to what I have already said. That is the position.
I draw an end to the questioning at that point. The session has been useful, although there are one or two areas on which we need further information. I thank the minister and his officials for attending.