Transport Connectivity for Remote
Communities in Scotland
Roundtable on Connectivity for Small Populations in Remote
Communities
23-24 September 2019, Ottawa, Canada
James Laird
James.Laird@PeakEconomics.co.uk

Structure Background and context
 Transport challenges and policy initiatives
 Policy effectiveness and shortcomings
 Transport appraisal in Scotland

Background and context

Remote communities inScotland


70% of land area



9.5% of population

Population in decline
4% down in last 25 years



projected to decrease by 26% in next 30 yrs

Higher employment rates

in Highlands and Islands GVA per head at 95%of Scottish average (incl. Inverness), but
could be 70% of average in places

Economy more focused towards primarysector and tourism than rest of Scotland

High car dependencyMore driving licences, more cars perhousehold, less bus use, less walking, longer
trips

Higher costs of travel

Transport connectivity
Rail and ferry

RoadAir

Transport challenges and recent policy
initiatives

Transport challenges
Slow journey times

High travel costsPoor network resilience and reliability

In places a lack of coordination in the delivery of servicesBus services under pressureReducing carbon footprint

Holes in mobile phone and broadband connectivity – as a substitute for travelTransport demand – high seasonality (under utilised in winter, over capacity inthe summer)

Government support measures

Background

PSO air network & zero APDSubsidised rail networkSubsidised ferry network

Recent subsidies and discounts (since 2000)
Concessionary bus and ferry fares (Scotland wide)Air fare discount (for remote residents)

Road Equivalent Tariff ferry fares

Rural fuel (petrol/diesel) duty relief scheme

Skye Bridge Toll removal

Government support measures


Recent and ongoing infrastructure investment
Inverness airport terminal



Ferry investment

Highland mainline and Inverness-Aberdeen railway upgrades

Road: A9 and A96 (to Inverness) upgrades

Policy effectiveness and shortcomings

Transport Governance in Scottish
Remote Communities
Government

Main responsibilities

European Union

Regulatory (incl. consumer rights, working time directive, state aid,PSOs, road freight sector, maritime cabotage)

UK Government

Regulatory (health and safety), taxation, vehicle & fuel taxation, crossborder services

Scottish Government

National transport policy, funder for subsidised transport services (incl.
buses), strategic road, ferry, rail and air services.

Regional Transport
Partnerships

Regional transport strategy, coordinating role between local authorities,
and can take on their delivery roles.

Local authorities

Local road, ferry, bus and air services. Local transport infrastructure1994 local government reform2008 Single Outcome Agreement between Scottish Govt and local authorities2008 until now: austerity and impact on government budgets

2018 Islands Act

Transport finances: Strategic vs Local

Capital stock at local
level is weak

Local government
prioritising education
investment (transport
capital investment hasfallen)Central government still
has a large transport
investment programme

Note: Local government
budget has contracted
more than Scottish
Government budgetTransport finances: Strategic vs Local
Strategic roads:£6billion
plannedinvestment inA9 and A96

Local roads:
deferredmaintenance

Strategic ferryroutes: RET
and new dual
fuel ferries

Local ferries: oldfleet with reliability/
resilience issues

Air farediscount

Subsidised bus
services: 16%
reduction in bus
service kms in 4 yrs

Transport: a regionalmatter?
Legislation is clear regarding private
and/or public sector provision of transport
servicesButTransport journeys cross local authority
boundaries to access services – long
distances in remote communities

Shared interests in ferry & air travel andremote communities has led tocollaborative working in HITRANS – the RTP

But is there ‘over-stuffing’? Do RTPs need astronger role in delivery?

Unfortunately transport governance is canbe a casualty of local government reformand financing.

Health, Education and Transport Coordination
FerryHealthHigh level of inter-dependence
in remote communities:
NHS largest business user ofArgyll air services



Education trips 40% of demandfor local air services

£1 subsidy in good bus
services can save NHS £2

BUT no formal coordination


Education

AirProblem against a backdrop ofcuts in local government
budgets

Transport Appraisal

Transport appraisal in Scotland The Business Case The Strategic Case: showing alignment with public policy objectives;
 The Economic Case: to demonstrate value for money; The Commercial Case: showing commercially viability; The Financial Case: demonstrating financial affordability; and The Management Case: showing the project is achievable

A project needs to ‘pass’ each sub-case of the Business Case

It is recognised that not all benefits (and costs) will be in the
Economic Case (cost benefit analysis) Judgemental decisions are therefore permitted

Transport appraisal in Scotland
 Scottish Transport Appraisal Guidance (STAG) Bottom up & Objectives Led
 Case for Change Strategic argument for government intervention/investment
 Long list of options

 STAG Part 1:
 appraisal of long list to get a short list.
 Appraised against local transport planning objectives, STAG criteria,

established policy directives, feasibility, affordability and acceptability

 STAG Part 2:
 Appraisal of short list to get preferred option
 Appraised against local transport planning objectives, STAG criteria, cost togovernment and risk and uncertainty

Weak Economic Cases


Passing The Economic Case
 Unnecessary if:
 There are significant unmonetised benefits Strong Strategic Case (aligning with the missing non-monetised benefits)

 Examples: Borders Rail (Edinburgh to Galashiels).

Core benefit cost ratio of 0.5.

 A9 (Perth to Inverness) Dualling. Core benefit cost ratio of 0.8.

However: Local stakeholders feel a poor Economic Case leads to: Reduced investment in remote regions; and Choice of minimum standard transport provision.

Improving the Economic Case
 Characteristics of transport investments in remote communities

that require specific treatment in CBA: High generalised cost of transport => Induced demand Low frequency transport services (e.g. 1 to4 a day) Network resilience (long diversions, outages of lifeline services) Journey quality/comfort (e.g. driving conditions on single
carriageway roads)
 Land use change (e.g. population and economic growth) Defining the Do Minimum for e.g. lifeline services
 Wider economic benefits (in labour markets & product markets) Wider social benefits (e.g. from dispersed population)
 Significant ‘international’ research effort needed to addressthese missing benefits

Conclusions

Conclusions


In Scotland there is a: Good legislative framework
 Good appraisal framework
 Good levels of government financial support for transport services toremote communities

BUT (1)
 There is a need for investment to maintain existing services, and this isagainst a backdrop of austerity.

 Differences exist between levels of local and central government

investment in transport There is a lack of coordination between transport, health and education

despite the strong inter-dependencies

Is there a role for a stronger regional government transport delivery
body?

Conclusions (contd)The good appraisal framework can lead to:

BUT (2)

Project selection of projects with weak Economic Cases (if benefits are missing),and strong Strategic Cases

Local stakeholders are concerned weak Economic Cases lead to:Selection of minimum standard options as the preferredReduced levels of investment

Should the Economic Case be strengthened?


Would require significant ‘international’ research effort,

Though there are some complementary research areas with more mainstream
interests (e.g. resilience in rail, labour market wider economic benefits, land usechange)

Thank you for your attention