Glasgow's £2 bus fare cap could cost ScotRail up to £20m as passengers switch from trains, MSPs told
ScotRail's managing director told Holyrood's Transport Committee the northern pilot cost the operator about 12% of its revenue there – and a similar hit in Strathclyde could reach £20m.
A First Glasgow bus. The £2 fare cap was extended across the Strathclyde Partnership for Transport area in September. · Photograph: km30192002 (CC BY 2.0)
The £2 bus fare cap in the Greater Glasgow area could cost ScotRail as much as £20 million, MSPs have been told, as passengers switch from train journeys to cheaper buses.
The Scottish Government extended the cap in September to the whole area covered by Strathclyde Partnership for Transport (SPT), which includes Glasgow, Lanarkshire and Ayrshire.
The northern warning
Appearing before Holyrood's Transport Committee, ScotRail managing director Joanne Maguire said the earlier pilot of the cap in the north of Scotland cost the Government-owned operator an estimated £750,000 in lost revenue in one year – about 12%.
If the same impact was felt in the Strathclyde area, she said, the drop could be as much as £20 million.
"Early days" in Strathclyde
Ms Maguire stressed that it was "very early days" in the west, where the cap came into force in early September, and said ScotRail was "not seeing a significant impact" so far. She noted that the marketing campaign for the cap had only begun in earnest a couple of weeks ago, and that the cap is due to roll out in Aberdeen from April.
"But what we need to focus on is what is within our control," she said, pointing to ScotRail's value-for-money message around peak fares being "gone for good", its "kids for a quid" offer, and what she described as very competitive journey times in Strathclyde.
Under questioning from committee convener Willie Rennie, she said there had not been any discussions with the Scottish Government about increasing ScotRail's funding to cover any losses.
"Black hole" warning
Scottish Liberal Democrat MSP David Green said the cap was "making a real difference across the far north", but pressed for action to fill any gap in ScotRail's budget.
"These figures suggest that the SNP's policy decisions have punched a significant hole in ScotRail's budget," he said. "If the policy were expanded to other areas, that black hole could deepen."
He added: "I'm worried that if these consequences are not properly addressed ScotRail will start to contemplate service cuts. That would be the worst of all worlds."
Government: "Travel patterns will evolve"
A Transport Scotland spokesman said the Scottish Government wants more people to travel by public transport, and that the £2 cap is one of a number of measures to help households with the cost of living – alongside the permanent removal of ScotRail peak fares and free bus travel for under-22s, over-60s and disabled people.
"As with any significant change to fares, we expect travel patterns to evolve and we are monitoring impacts across the transport network," the spokesman said.
What it means for Glasgow commuters
For passengers, the cap has made many bus journeys across Glasgow, Lanarkshire and Ayrshire significantly cheaper, particularly longer commutes that previously cost several pounds each way. The question now is whether that saving comes at the expense of the rail network – and who picks up the bill if it does.
The Daily Scot previously reported that the cap was expected to cost around £100m a year.