Chamber and committees

Thank you, convener.

Almost exactly a year ago, on 17 March 2021, the Cabinet Secretary for Transport, Infrastructure and Connectivity, Michael Matheson, advised Parliament that, at the conclusion of the current franchise, ScotRail services would be provided in the public sector by the operator of last resort—an arm’s length company owned and controlled by the Scottish Government. The franchising system was clearly no longer fit for purpose.

At that time, there was considerable uncertainty arising from the on-going Covid-19 pandemic and continuing delays to the publication of the United Kingdom Government’s white paper on rail reform. A detailed assessment of the options available for ScotRail was undertaken and it was decided that it would not be appropriate to award another franchise agreement to any party at that time. In the circumstances, our duty to provide or secure ScotRail services through the OLR under section 30 of the Railways Act 1993 will be engaged when the current franchise agreement ends on 31 March 2022. As committee members will know, bringing train operators into the public sector under Government control through section 30 OLR arrangements is not a new thing. Indeed, three train-operating companies in England and one in Wales are now in the public sector under Government control.

A considerable amount of work has taken place since that announcement. As members will be aware, I recently provided an update to Parliament, confirming that the transition of ScotRail into Scottish Government control will take place on 1 April, which is just 17 days away.

How have we prepared for the transition? Following detailed analysis and consideration, we have adopted a holding company model for the Scottish Government-owned, public sector-operated operator of last resort arrangements. Under that model, a Government-owned holding company, Scottish Rail Holdings Ltd, will, on behalf of Scottish ministers, oversee and manage the delivery of services by its wholly owned subsidiary ScotRail Trains Ltd. Our view is that that is the most robust and sustainable model that is compatible with current UK rail legislation, which we have no powers to change. It strikes a balance between experienced rail professionals being able to make operational decisions and giving overall accountability to Scottish ministers.

Late last year, we announced key fixed term appointments for Scottish Rail Holdings Ltd, with Chris Gibb appointed as chief executive officer and David Lowrie as finance director. In addition, arrangements for the formal transfer of ScotRail staff from Abellio ScotRail Ltd to ScotRail Trains Ltd continues at pace, with engagement with staff and trade unions having begun in early January. I personally have met with the trade unions both collectively and individually in recent weeks, and I will work collaboratively with them to ensure the long-term sustainability of rail operations in Scotland. Staff will transfer on their terms and conditions on 1 April. They will also benefit from the public sector pay policy, and we have committed to ensuring that any pay deals that where already agreed for 2022-23 will be honoured.

Over the coming days, the transition team will remain focused on finalising governance and other arrangements for the transition to OLR to ensure that the transition is as smooth as possible for passengers and staff. On governance, we are finalising the designation of the chief executive of SRH as accountable officer. There will be an interim arrangement in which the Transport Scotland accountable officer will remain as AO for SRH until an order under section 483 of the Companies Act 2006 is approved by Parliament.

The first of April not only marks a new beginning for ScotRail, but gives us an opportunity to deliver passenger services that are efficient, sustainable, safe and fit for the future and which reflect the changing world in which we live. It is also a chance to give people across the country the opportunity to help us shape our vision for the new ScotRail. It is clear that we have to adapt in order to align with changing travel patterns and that we have to consider the affordability of the railway as we recover from the pandemic. An important aspect is the need to make sure that passengers and staff are safe—and feel safe—in our stations and on our trains.

All of that needs to take place while we work towards the delivery of our ambitious target to decarbonise rail passenger services by 2035. Against that backdrop, I want to ensure that people the length and breadth of Scotland are given a chance to have their say on what the new future of ScotRail should look like.

As I outlined in my statement to Parliament, there is no doubt that the future of rail services is changing. We have two particular challenges to address. One is the future of ScotRail post 1 April, and another is the matter of women's safety on public transport. In that respect, I note Transport Focus’s oral evidence to the committee last week. Its research found that 85 per cent of women and girls think about their safety while planning or making a journey on public transport, while British Transport Police figures for sexual harassment on public transport in London show a 61 per cent increase since before the pandemic began.

As members will know, I as the minister am making two distinct offers as we take ScotRail into public ownership. The first is a national conversation on what our railway should look like from 1 April, and how it best meets passenger need, and the second is a broader look at women's safety on rail and across our public transport network. We will be launching a consultation on women's safety, spanning all modes of public transport. Plans are being developed; officials have started engagement with Engender; and we will look to begin focused engagement with other women's organisations specifically on improving women's experience of and safety across public transport.

Officials have also started meeting key groups such as the safer transport strategic group, which is led by British Transport Police and brings together a range of public transport providers to promote safer travel across public transport. I will be meeting BTP shortly to discuss that, in recognition of its campaign on sexual harassment, which started earlier this year.

Committee members will also recall my announcement that we would be taking forward a national conversation on rail. That will be an opportunity for staff, passengers, communities, trade unions and MSPs who share our ambition to make Scotland’s railway attractive and accessible for all to help shape that vision for ScotRail. Officials are developing the scope and remit for the national conversation and more information on that will be announced in the coming weeks. Substantial public engagement will begin later this spring, following the local government elections, but I am particularly keen to engage our trade unions in this work, as I recognise their vital role in ensuring that public ownership of our railways works. I also invite committee members to play their part in shaping that national conversation.

The officials and I are happy to take any questions that the committee might have. It is also worth saying that I am keen to hear any suggestions that members might have, too.

Good morning, and thank you for inviting me to discuss the draft order. The order sets the reimbursement rate and capped level of funding for the national bus travel concession scheme for older and disabled persons in 2022-23 as well as the reimbursement rate for the national bus travel concession scheme for young persons in the coming financial year. In doing so, it gives effect to an agreement that we reached back in December with the Confederation of Passenger Transport, which represents Scottish bus operators.

The order’s objective is to enable operators to continue to be reimbursed for journeys that are made under both schemes after the expiry of the current reimbursement provisions on 31 March 2022. It specifies their reimbursement rates and the capped level of funding for the older and disabled persons scheme for the next financial year from 1 April 2022 to 31 March 2023. The order is therefore limited to the coming year.

Due to the on-going impact of Covid-19 on bus passenger numbers and the continuing uncertainty about the coming year, it has not been possible to undertake the usual analysis and forecasting that underpin the annual revision of the reimbursement rates and the cap for the older and disabled persons scheme. As a result, the funding cap and reimbursement rate for the scheme have been retained from the previous financial year, with the reimbursement rate in 2022-23 set at 55.9 per cent of the adult single fare and the funding capped at £226.1 million. Those figures are the same as the corresponding figures for 2021-22. We think that, in practice, claims will be substantially less than the capped level, because of the continuing impact of the pandemic on patronage.

For the young persons scheme, the reimbursement rates have also been retained from 2021-22, at 43.6 per cent of the adult single fare for journeys made by passengers aged five to 15 and 81.2 per cent for journeys made by 16 to 21-year-olds. As in 2021-22, a budget cap is not being set for the young persons scheme in 2022-23. We believe that the rates are consistent with the aim set out in the legislation establishing both schemes that bus operators should be no better and no worse off as a result of participating in them. The rates will also provide a welcome degree of stability for bus operators.

As we know, free bus travel enables people to access local services and gain from the health benefits of a more active lifestyle, and it will also help strengthen our response to the climate emergency and support our green recovery by embedding sustainable travel habits in young people. The order provides for those benefits to continue for another year on a basis that is fair to operators and affordable to taxpayers.

I commend the order to the committee, and I am happy to answer any questions that members might have.

I am not sighted on the detail of the specific example that Mr Kerr has highlighted, and I do not know whether officials know any more about it. However, we are happy to come back to him on the specifics. As Mr Kerr will be aware, this is a national scheme, but I do not want to say too much, as I am not aware of the news article or the debate that he cited with regard to Aberdeen City Council. As I have said, I am more than happy to write to him about the specific details of the scheme.

Do you want to come in on that, Tom?

I am happy to do so.

I think that Mr Kerr’s question refers not to the regulations but to the legislation itself. I wonder whether one of the officials can pick up his specific question about perceived double taxing of businesses.

The guidance has not yet been produced; it will be produced once the Scottish statutory instrument is—as, I hope, it will be—passed by the committee. It is dependent on that.

On the figure that Mr Kerr is looking for, no such figure has been identified, at this time. It is for local authorities to carry out the modelling and, essentially, to look at their own local circumstances. It is not for me to direct them—the power is for local authorities to use and depends on their local circumstances.

I will defer to officials on that. If the motion to annul was agreed to and the instrument was looked at again, the primary legislation would still be on the statute books, and it could be overridden only by another form of primary legislation. I will pass to officials to clarify that technical point.

Absolutely.

Having listened to the debate, I come back to the point that most of the issues that have been raised were decided by the Parliament during the passage of the 2019 act some three years ago or relate to the details of specific schemes that are subject to local authorities’ discretion, empowerment and local accountability as part of the requirement in the act to set out schemes—[Inaudible.]—and carry out impact assessments.

There has been discussion about the regulations introducing a cap on charges but, if the motion to annul is agreed to, I cannot make such a change; it has to be done through primary legislation. Members need to understand that. We need to be very clear that we are voting on the regulations, and I cannot unpick them to introduce a cap. As I have said, that would have to be done via primary legislation.

The regulations give local authorities the powers that they have already been provided with under the 2019 act. That is hugely important. As we have heard in members’ speeches and in the question-and-answer session, that power already exists in England and Wales. The Labour administration in Nottingham and the Conservative Government have been perfectly happy for the power to exist and operate. Likewise, we have heard that certain local authorities in England and Wales have not chosen to use it.

However, that is in the gift of local authorities; it is not for politicians or ministers like me to direct these things. The power was given by the Parliament on the basis that local authorities would be able to design schemes to reflect local circumstances. There are robust requirements on local authorities to consult the people who are likely to be impacted by local schemes as well as requirements on those authorities to undertake impact assessments. Fundamentally, however, this is about trusting our local authorities—

I do not think that I said that work has not started. That is not accurate. We plan to publish guidance in the first half of 2022, if the Parliament does not annul the regulations. In our guidance for local authorities, we will outline the themes that emerged from the public consultation, which was undertaken to inform the regulations and guidance. That will include issues that were outwith the scope of the regulations but that local authorities might want to look at in their consultations. The guidance will also include reference to the support that is already available to local authorities in existing guidance on best practice in their consultations.

Before I took an intervention from Mr Kerr, I mentioned the climate change emergency, and it is important that we link back to that. All the parties in the Parliament supported the ambitious and legally binding emissions reduction targets in the Climate Change (Emissions Reduction Targets) (Scotland) Act 2019. Workplace parking licensing schemes have the potential to encourage the use of more sustainable travel while also raising revenue that will be used to improve public and sustainable transport. That is the key point that Mark Ruskell made. Now is the time to support the climate change legislation with real actions and not just words.

We have heard much today about the Nottingham example. I again make the point that it is the only scheme in operation in the United Kingdom. I point to the positive outcomes that were outlined in evidence to the committee’s predecessor by Nottingham City Council, which is a Labour-run council. Of course, Nottingham has among the highest public transport use in the country, and there has been an associated fall of 40 million car miles over the past 15 years. The revenue from the workplace parking levy has supported the expansion of Nottingham’s successful tram system, which I mentioned. Nottingham has also made grants available to support employers to implement sustainable transport measures such as cycle parking. Again, that is a hugely significant investment.

I am pleased that the Government has introduced the regulations so that local authorities in Scotland can make use of the new discretionary powers that the Parliament provided to them. I do not support Graham Simpson’s motion to annul the regulations, which are technical and necessary in order for workplace parking licensing schemes to be implemented effectively and transparently. I urge Mr Simpson to withdraw his motion. If he does not do so, I urge members of the committee to oppose it.