Transport Scotland criticises ScotRail owner’s peak fares suspension cost estimate as ‘unhelpful speculation’

Scottish Rail Holdings chief executive said trial could cost £60m a year

A warning from the ScotRail’s Scottish Government-appointed owning group that suspending peak fares could cost twice as much as expected if it only attracts a small increase in passengers has been described as “unhelpful speculation” by Transport Scotland.

The agency’s reaction, which has surprised industry insiders, follows The Scotsman revealing on Wednesday that a report by Scottish Rail Holdings (SRH) chief executive David Lowrie said the scheme “could be significantly more expensive than politically expected”.

Ministers have allocated £15 million to fund the six-month experiment that will start in October, in which some fares will be halved. However, the SRH report, obtained through a freedom of information request, said: “The difference between peak and off-peak average yields for the peak journey volumes is equivalent to more than £60m per annum.”

Retailers are hoping the fare reduction experiment will help generate more shopping trips. Picture: John Devlin

That suggests the six-month equivalent cost could be around £30m. ScotRail has told The Scotsman that the £60m figure referred to in Mr Lowrie’s report “is an estimation based on the assumption of a small increase in passenger demand”.

However, the Scottish Government’s Transport Scotland agency, described the figure as “unhelpful”. Its spokesperson said: “The Scottish Government has confirmed that the ScotRail peak fares pilot will go ahead for six months, for which [a] £15m budget has already been set aside.

"Given the changes in post-pandemic travel patterns and our commitment to net zero, we are fully focused on ensuring this pilot encourages more people to use rail by removing peak fares. This is in stark contrast to unhelpful speculation about costs should the pilot be unsuccessful.”

ScotRail charges peak fares on some routes before 9am and in the late afternoon on weekdays. It said the trial had been included in its budget for this year, which had not been finalised when Mr Lowrie’s report in March said a budget gap “could be created or exacerbated" by the pilot, delayed fare increases and ongoing industrial action across the industry.

ScotRail's peak fares will be suspended for six months from October. (Photo by John Devlin/The Scotsman)

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ScotRail head of customer operations Phil Campbell said: “We are working with the Scottish Government and Transport Scotland on the implementation of the six-month suspension of peak fares trial. This is an exciting initiative which will help make rail a more attractive option, and encourage more people to leave the car at home and travel by train.

“Everyone at ScotRail is focused on making the trial a success and we look forward to welcoming both returning, and new, customers to the railway.”

The project, which ministers have said could be extended, has received widespread support from politicians, unions and passenger watchdogs.

Adding their backing, retailers said they hoped it would help reverse flagging shopper footfall ahead of the key pre-Christmas period.

Scottish Retail Consortium director David Lonsdale said: “We’re keen to see the peak rail fares discount proceed as planned from October, more so given the weakness in shopper footfall and especially as it should hopefully entice more visits to stores in city centres and larger conurbations in the run up to what is the critical festive trading period for much of the retail industry in Scotland.”

The body said footfall was down by 0.9 per cent in May compared to a year ago, with Glasgow down by 7.2 per cent, although Edinburgh was up by 4.7 per cent.