Bus fare cap in greater Glasgow could cost ScotRail £20m, MSPs told
Committee hears evidence on potential impact of new limit
The £2 bus fare cap in the greater Glasgow area could cost ScotRail as much as £20 million, MSPs have been told, as passengers jump from train journeys.
The Scottish government extended the cap to the area covered by the Strathclyde Partnership for Transport, which includes Glasgow, Lanarkshire and Ayrshire, following a successful trial in the Highlands and Islands.
Appearing before Holyrood’s Transport Committee, ScotRail managing director Joanne Maguire said the northern pilot cost the Government-owned operator an estimated £750,000 in lost revenue in one year – about 12 per cent.
If the same impact was felt in the Strathclyde area, the drop could be as much as £20 million, Ms Maguire said.
“But what we need to focus on is what is within our control,” she said.
“So, pushing the value for money message around peak fares (being) gone for good, kids for a quid and in Strathclyde we are very competitive on journey time, which our commuters will absolutely pay (for).
“They want to stay at home as long as they can in the morning and get back home as quickly as they can.”
Ms Maguire said it was “very early days” in Strathclyde, where the fare cap came into force in early September, but added ScotRail was “not seeing a significant impact” as a result.
“I think it was only a couple of weeks ago that the marketing campaign began in earnest and we know that the bus cap will roll out in Aberdeen from April 1 next year, so we are going to be monitoring closely but it is very early days for us to pass any form of judgment.”
Under questioning from committee convener Willie Rennie, Ms Maguire added that there had not been any discussions had with the Scottish government about an increase in funding for ScotRail.
“I think for us at ScotRail, our focus is on driving value for money and doing everything we can to drive our passenger journeys up and drive revenue up,” she said.
However, Transport Scotland's outline business case for extending the £2 bus fare cap to the west of Scotland suggested the cost to ScotRail could be higher.
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It stated: "The potential annual revenue risk [to ScotRail] is estimated at £25-45 million. We state this large range because the estimate is subject to considerable uncertainty.
"A blanket £2 bus fare cap would likely result in significant modal shift from rail to bus on parallel corridors, eg Ayrshire to Glasgow, especially where journey times are competitive.
"Provisional estimates from ScotRail suggest a 25 per cent reduction in revenue based on modal shift seen on some lines in the Highlands pilot area."
A Transport Scotland spokesperson said: "We will continue to monitor the impact of the £2 bus fare cap on patronage, modal shift, affordability, connectivity and wider transport behaviours.”
ScotRail said later: "Joanne Maguire said at committee that the £20m estimate was based on the impact seen in the Highlands. This was specifically in relation to the 12 per cent revenue drop experienced in that area, which she referred to.
"She went on to say that Strathclyde is significantly different from the Highlands, and there will be different factors that determine whether or not customers choose to use the bus rather than the train.
"It’s for Transport Scotland to comment on the outline business case. What Joanne Maguire provided was a very early indicative analysis based on figures available from the Highlands pilot. She told committee it was still too soon to say with any certainty what the financial impact will be."
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