Chamber and committees

I want a strong, sustainable, reliable, affordable, accessible bus system, and that will rely on local authorities and bus operators being able to work in partnership. As Mr Doris, I think, pointed out, we face big challenges coming out of the pandemic, but we all need to work collectively to identify how to address them, given that, as we all know, bus services are frequently the issues that our constituents contact us about.

Motion agreed to,

That the Net Zero, Energy and Transport Committee recommends that the Bus Services Improvement Partnerships (Objections) (Scotland) Regulations 2024 [draft] be approved.

Good morning, committee members. Thank you for inviting me to discuss the draft Bus Services Improvement Partnerships (Objections) (Scotland) Regulations 2024.

The Transport (Scotland) Act 2019 was designed to make Scotland’s transport network cleaner, smarter and more accessible than ever before. For bus services specifically, it provides an enhanced suite of flexible options for local transport authorities to improve bus services according to local needs. The 2019 act offers wider powers for local transport authorities to run their own services, and it provides viable options for partnership working and franchising. Bus services improvement partnerships—or BSIPs, as they are known—provide a formal form of partnership working between local transport authorities and bus operators, with both sides working together to develop a partnership plan and related schemes to improve services in their area, and with both taking joint responsibility for delivery.

Once a bus services improvement partnership is in place, all operators in the area are required to meet the service standards that it sets out, regardless of whether they supported its development. As such, the objection process is key to ensuring that bus operators in an area are able to meaningfully engage with the BSIP, as it provides a mechanism for them to object to proposals. That ensures that the final partnership is based on mutual agreement and buy-in from both the transport authorities and operators so that they can serve the needs of local communities.

The regulations that are under consideration today prescribe who can object to a BSIP when it is being made, varied or revoked, and the minimum number of objections that are needed to pause or halt the proposals. A local transport authority can progress with a proposal only if a sufficient number of operators do not object. The regulations are intended to balance the right of a local transport authority to bring forward a BSIP against the right of operators to object to what is proposed.

In developing the regulations, we have sought to account for the significant variations in local bus markets across Scotland and have considered the wide range of possible scenarios in which a BSIP may be developed. We have also sought to ensure that no single operator is able to have undue influence in a BSIP. We have engaged closely with key stakeholders such as local authority transport officers and operators. Their involvement in the development of the mechanism and the regulations has been crucial in creating a practical approach that is designed to address local needs flexibly. The regulations are a key part of creating successful partnerships between local transport authorities and operators in order to improve services for passengers.

I am happy to answer any questions that members have.

There are three different models: the bus company, the partnership—the regulations that you have before you are about objections to setting partnerships up in a more formal way—and franchising. We expect to provide—this might help in relation to the previous question—more guidance and help, including by sharing best practice that will have been learned from elsewhere in relation to the different models. It is early doors when it comes to local authorities setting up their own bus companies. It is up to them; it is not up to us. We would keep a watching brief, as would the committee, but this is an issue that you might want to raise with the transport officers, the Convention of Scottish Local Authorities or the councils themselves.

There are different bus markets in different areas, and some are stronger than others. The patronage of buses has not recovered to its previous level. The vast majority of local authorities, apart from in Lothian, rely on private operators. There is a tension if councils want to set up their own bus company, which would then be in competition with those operators; there are also competition law issues in relation to bus operators. At the same time, although they are dependent just now on all the different operators and companies for the sustainability of bus services, some local authorities may want to take that step of setting up their own companies. The Transport (Scotland) Act 2019 allows them to do that, but they have to take the step themselves and have confidence that they are in a position to do that. That is for them; it is not for us.

We can keep a watching brief, and that is what we would do. When I visit local authorities—I have visited a number of them—they can share with me the state that they have got to and the steps that they are taking but, again, that is for them. It is not for me to account for them in this committee, because I do not want to misrepresent them in any way.

Buses would be bought through a capital fund. It is not necessarily our responsibility to fund local authorities to buy buses, but we have funded and supported them significantly to transfer buses within their local areas. As has been indicated, the operating model for Lothian Buses is different from that of others in relation to the transfer from diesel buses to electric ones. In the case of Aberdeen, the transfer is to hydrogen. That has happened through bids for capital funding.

I think that you are talking about the operation of buses. Local authorities have a responsibility to help when there is a problem. For example, some operators have pulled out of some areas. About £55 million has been spent by local authorities in that regard. That is part of the local government settlement.

On the development of the powers in the 2019 act, local authorities are interested in different models and are trying to take forward that work, which is primarily policy work. If they come up with their own solutions, they will have to take them to their own committees and so on. However, funding for the development and policy work is available, as it was previously.

With regard to your question about the 2024-25 budget and whether all the local authorities will do everything overnight and set up everything next year, I am not aware of the pace of the work being such that there would be major demands on the 2024-25 budget.

Ideally, yes, but the pressures in the bus market, particularly coming through the pandemic with the reduced number of people using the bus service, are challenging that. That is why it is more important than ever that our local authorities look at models that can help to provide a reliable, sustainable service in their area that is less reliant on subsidy because, over the piece, there is enough income. That also includes trying to increase patronage.

I detect from the questions very little concern about these actual regulations on the objection system, so I simply refer the committee to my opening remarks, in which I set out the rationale for the legislation. From a technical point of view, this is about making sure that we have all the systems in place, and the regulations complete what is required for bus services improvement partnerships to ensure that, when they are developed, any plans that are put in place have co-operative agreement and buy-in from all concerned, and that, if operators have an objection, there is an understood mechanism and route by which they can raise it.

With that, convener, I am happy to move the motion.

Motion moved,

That the Net Zero, Energy and Transport Committee recommends that the Bus Services Improvement Partnerships (Objections) (Scotland) Regulations 2024 [draft] be approved.—[Fiona Hyslop]

That is not quite the case. You referred to Lothian Buses, which is a municipal bus company that is owned by the local authority. These regulations are not anything to do with that—

I am not familiar with the different local buses and the numbers that you referred to, but the principles—

We are, as I will set out if you let me continue, convener. The 2019 act provides for local authorities to run their own bus companies, like Lothian Buses, and bus partnerships, which are the subject of the regulations. It also provides for them to develop franchises. The funding that supports the development of policies relating to those aspects of the 2019 act, to which you referred, is still in the budget. It comes under the community bus fund, and £1 million in revenue funding and £5 million in capital funding have been set aside for that for 2024-25. Your question was whether the budget supports the work of the 2019 act? Yes, it does, and that is the mechanism by which it does so.

There continues to be funding for buses through the network support grant, which primarily goes to supporting the operation of bus services. There is also the concessionary scheme, which has been given a small uplift in funding. Funding to support the operation of bus services is still being provided. That is still being fully funded, as it was in 2023-24.

The principles of it are probably achieved by formal bus partnerships and franchising, because we are trying to set out something that is more sustainable just now in the financing of the bus market. A huge amount of money is going into concessionary travel, but it was set up in the previous legislation so that operators would be no worse off but no better off. It helps patronage and, hopefully, as we discussed previously, younger people, for example, will become fare-paying passengers. I have heard that and have had that discussion about franchising with councils in Glasgow. Bundling can enable the geographical coverage of an area to be complete.

As we all know, there are certain times of the day when buses are more popular. You can understand the position of operators. Remember that we are in a market that has been deregulated for a long time. Obviously, private operators need to ensure that they are making some kind of profit so that their services are viable, and it is therefore more attractive to do certain routes rather than others. That has led to local authorities having to pick up the pieces in areas where buses have been withdrawn in particular ways.

The whole point of the Transport (Scotland) Act 2019 and, I hope, the fair fares review is to try to provide more sustainability in the system. I have written to the committee to say that we are expecting that review imminently. That is what we need for bus services. If we are going to get more people back on to the bus, they need to know that they have sustainable, reliable services and services at different times of the day, because we know that people are working on different shift patterns. In answer to your question on whether this will help to address the problems that you have, my answer is yes. It will not necessarily just be through franchising. It would also be possible to build it into the bus partnership, for example, and the schemes that come as a result of that.