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Glasgow Prestwick Airport (Sale)
To ask the Scottish Government whether it will provide an explanation of its decision not to proceed with the sale of Glasgow Prestwick Airport at the present time. (S6T-00415)
During our period of ownership of Glasgow Prestwick airport, we have sought to do what is right for the business, for taxpayers and for the Ayrshire economy. Glasgow Prestwick has developed as a specialist airport through carving a niche in a competitive aviation market. The annual accounts that were laid before Parliament in December show that the business continues to move in a positive direction, with a profit having been posted for 2020-21.
We were pleased that the recent sale process attracted bids from credible investors. Detailed and extensive work was done by all parties involved. However, following careful consideration of a recommendation by the Prestwick board, we decided not to proceed with the sale, at this time. It is still our intention to return Prestwick airport to the private sector at the appropriate time and opportunity. Any decision must be informed by what is right for the long-term success of the business and the contribution that it makes to the local economy.
The cabinet secretary has just said that the Government rejected bids for the airport. It seems that there was one preferred bidder but more than one bid. Can the cabinet secretary confirm reports that two bids for Prestwick were received from the preferred bidder? Now that the process is at an end and it seems that there is no longer a preferred bidder, can she tell us why those bids were rejected by ministers? There have been reports that the second bid was lower than the first one, due to earlier withholding of information about the condition of the runway that came to light after the first bid was made. Is that correct? In the almost 10 years since the Government bought Prestwick, and before the latest bids were rejected, has the Government received and rejected any other bids for the airport?
I know that there is a lot of interest in the matter, so I am happy to return to the chamber to answer some of those questions more fully.
There has been speculation about bids and bidders throughout the sale process, and a number of companies have been mentioned. I stress that much of that speculation has been inaccurate. We must continue to respect commercial confidentiality, so we cannot comment on the identity of bidders or the substance of bids. I hope that Colin Smyth appreciates that. It will be hugely important in providing confidence in any future sales process with either previous or new bidders.
Regarding the substance of Mr Smyth’s question, the commercial bids that were received were assessed against the commercial case and the wider economic case for the region. It was on the basis of independent advice, and following a recommendation from the Prestwick board, that we decided that the bid does not, at this stage, represent the value to the taxpayer that we are looking for.
I would welcome a further opportunity to discuss the matter. That vague answer is not good enough. There is no preferred bidder for Prestwick at the moment. The cabinet secretary cannot hide behind on-going confidentiality when the process is not on-going: the sale has collapsed.
I ask the cabinet secretary to reconsider her answer and to tell us why the bids that were on the table were rejected. Significant investment is required in order to give Prestwick a sustainable future. That will not come from a new owner any time soon. Can the cabinet secretary tell us exactly where the necessary investment for Prestwick will come from? Is it the case that, as it seems, and a decade after buying Prestwick, the Scottish Government still has no plan for the future of the airport?
There were many questions there. I appreciate that you want short answers, Presiding Officer, but I would like to answer them in detail.
Whether or not there is a live bid, we should not and cannot comment on speculation about the identity of bidders. I appreciate that there is a desire for more information about the detail of the bids that were received and rejected. I hope all members understand that it is important that we safeguard the integrity of commercial discussions, both because we are bound by commercial confidentiality and in order to avoid undermining any future negotiation with current or previous bidders.
I can be clear, as I have already said, that the commercial bids that were received were, on the basis of independent advice, considered not to be adequate right now to secure value for the taxpayer. Any return to the private sector needs to be on the right terms. We need to ensure that we are confident that a sale would not only represent value for the taxpayer but would put the business on a firm footing. Long-term commercial sustainability is important: the business needs to develop and to support jobs and the economy. In the most recent sale process, we were not satisfied—on the basis of independent advice—that those objectives would be met.
Given the importance of investment, through the Ayrshire Growth Deal, in South Ayrshire, which is primarily focused around Prestwick airport, can the Scottish Government give assurances that any future potential buyer for the airport would be supportive of the Ayrshire Growth Deal and the spaceport?
Siobhan Brown has made a very important point that emphasises the comments that I have already made about meeting the objectives that we have set. Of course, any potential future buyer would need to take their own decisions about what is right for their business, but we are clear that the Ayrshire Growth Deal provides significant opportunities locally—not just for Prestwick, but for the wider region. We need to do all that we can to encourage any future owner to engage with local growth deal partners.
Colin Smyth tried his best to get an answer to this question, but the cabinet secretary was having none of it. I ask the cabinet secretary, again: what was the reason for the bid, or bids, being turned down? Was it down to the price that was offered, investment, jobs or a combination of all three?
The answer to that question has a number of elements. We were pleased that the sales process attracted significant and credible interest from bidders. We considered very carefully the offer from each bidder and we considered a revised offer from the business that remained in consideration. We reached the view, informed by the advice of the Prestwick board and professional advisers, that the sale should not, on commercial and broader economic grounds, progress.
We agree with the Prestwick board—this might go some way towards answering Graham Simpson’s question—that the market conditions are not particularly favourable at this time for maximising the enterprise value of the business and the value to the Scottish Government, as a shareholder. Again, that conclusion was reached following independent assessment. The business will continue to develop its commercial and growth strategy under the Scottish Government’s ownership.
My last point is that, obviously, the annual report and accounts were published on 21 December; I am sure that they were of great interest to Graham Simpson. The annual report and accounts show that diverse revenue streams helped to mitigate the impact of Covid on passenger numbers in 2020-21. However, there is no question but that Covid has had an impact on the aviation sector. Operating profit before exceptional items was £500,000, and the total profit after tax for the year was £12.8 million. The business is progressing—
In conclusion, cabinet secretary.
—and we need to ensure that we choose the right bidder at the right time in order to maximise the economic asset.
Free Bus Travel for Young People (Access)
To ask the Scottish Government how it will assist young people to access the expanded free bus travel scheme. (S6T-00399)
This potentially transformational scheme opened for applications yesterday. There are a range of ways in which people can apply, and they are detailed on the Transport Scotland website. For example, online applications for either a Young Scot card or for a national entitlement card can be made at getyournec.scot, the Improvement Service’s online portal. Applications can also be made directly through local councils. I believe that, as of this morning, more than 37,000 applications had been made via the getyournec.scot portal alone.
I know that concerns have been expressed about the complexity of the online application process, but the process that is in place for the young person’s national entitlement card is broadly similar to that for the card for older people.
It is also, obviously, not ideal to be launching the scheme in the current circumstances. Given the situation with the pandemic, we are encouraging only children and young people whose travel is essential at this time to apply.
As I set out in my letter to MSPs last week, I think that we are striking the right balance in enabling children, young people and families who potentially will benefit the most from free bus travel to access it at the earliest opportunity while maintaining plans to fully market the scheme at the right time—potentially helping bus services to recover from the impacts of the pandemic.
I thank the minister for that answer and for writing to all MSPs and MPs last week to update us on the plans. I will certainly do what I can to promote the scheme in my constituency.
The minister is right: it is potentially a transformational policy. I want to know how the minister will ensure that children and young people who might benefit the most get their entitlement cards as early as possible. Some concerns have been raised with me, by parents who are applying, about the complexity of the application process—particularly the proof of identity that is required. Is the minister concerned that that might limit its success?
I welcome the member’s positive comments about the scheme and her commitment to promoting it. However, there are no additional requirements for proof of age, person or address when applying for a Young Scot NEC with the free bus travel product on it in comparison with applying for one without that. The only difference is that parents, guardians or, in some cases, carers have to apply on behalf of children and young people who are under the age of 16 if they want a Young Scot NEC that has the free bus travel product on it, and they have to provide proof of their status in order to protect the children and young people.
However, I reassure the member that we are committed to delivering the scheme in a way that is safe for children and young people and that instils confidence in parents and guardians, and that we are absolutely determined that the children and young people who might benefit the most from free bus travel will not miss out on it. We will, of course, be monitoring the scheme and responding accordingly as we go along.
Again, I thank the minister for his reply and for what he has just said about monitoring the scheme.
I lodged this topical question specifically because I wanted to ask about one particular group of individuals when it comes to the application process. Foster carers in my area have raised with me the fact that care-experienced and looked-after children might not have ready access to their birth certificates and so might face the additional process of going to council social work departments for access to those, which might complicate or extend the process for them. Obviously, those children and young people cannot be disadvantaged. We need to make sure that there are no additional barriers for them. Will the minister comment on that specifically and on how we can make sure that there are no barriers for care-experienced young people?
Be brief, minister.
Gillian Martin raises a perfectly valid point. I offer her the reassurance that we are aware of the potential challenges for foster care and kinship care families. Clearly, local authorities, which are corporate parents, have a responsibility to help families to access the benefit, and we are working with local authorities to ensure that that happens. I say to members that, if any issues emerge that involve their constituents, they should contact my office and we will seek to assist.
The current Young Scot card has already been calculated and is part of the age standard scheme in Scotland. Why can young people not use that until they receive their new card, so that they can benefit immediately from the free bus travel?
Many existing Young Scot card holders are under the age of 16 and therefore need their parent, guardian or carer to apply on their behalf for a replacement card with the free bus travel product. That is because we are committed to delivering the scheme in a way that is safe for children and young people.
For those over the age of 16, local authority partners need to ensure that they are sending a replacement card to the correct address, as the details that are held are not necessarily current—hence the need to apply for an additional card. Offline Young Scot NEC replacement processes are also in place with local councils.
If Mr Whitfield has any specific cases in mind, he should get in touch with me.
How does the Scottish Government’s approach to concessionary and free bus travel differ from that of the United Kingdom Government?
Be brief, minister.
There are some very obvious differences. Free national bus travel from the age of 60—not the state pension age—is an example. Essentially, we are determined to expand the national provision of free bus travel and not to shrink it, in so far as that is possible.
Thank you. That concludes topical questions.
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