Free bus passes for all can make financial sense

Free bus passes for all can make financial sense

by Stuart Crawford
article from Wednesday 1, November, 2017

THERE HAS BEEN an awful lot about transport in the news recently, what with the opening of the Queensferry Crossing across the Forth, the Edinburgh trams inquiry, the Scottish Government’s plan to banish petrol and diesel cars by 2032, developing low emission zones in cities and so on. Headlines of Bank Holiday chaos, delayed trains and chaos at airports have also become part and parcel of the wallpaper of everyday life in the UK.

The underlying theme in all of this, though, is that Britain’s transport infrastructure is being overwhelmed by the amount of traffic now using road, rail and air routes. Building more roads, railways and airport facilities seems to have little effect. They just fill up with more traffic.

In particular, Britain’s love affair with the car has largely created the delays and congestion on our roads, be they urban streets or motorways. Seldom nowadays can one complete a journey without a hiatus en route due to an accident, road works, or oftentimes just sheer numbers of vehicles.

To alleviate such congestion, we are encouraged by government and relevant authorities to make more use of public transport. On the face of it this makes sense. People using buses instead of private cars could significantly reduce the number of vehicles on the roads, help to reduce pollution and improve air quality as well as public health.

The problem is that most people are very reluctant to abandon the freedom and privacy that their cars afford. Aside from those who really cannot rely on public transport – rural travellers spring to mind – it takes some incentive to persuade people to abandon their warm personal transport and take their chances in the cold and rain at the local bus stop. Congestion charging was famously rejected by Edinburgh a twelve years ago and it seems that parking charges are an insufficient deterrent to car use in our towns and cities.  Meanwhile bridge tolls have been banished in Scotland.

So what can be done to get people out of their cars and using public transport? Well, I was pondering this very question the other day as I took the bus into Edinburgh.  I also wondered why the buses in the capital were full of old and young people and, discounting tourists, not much in between. Then a blinding flash of the obvious; old people and young people are induced to use public transport via financial incentives. The Young Scot card for the youngsters and the senior citizens card for us oldies.

I have a car, but I don’t use it anymore to go into town.  Being of a certain age, it’s madness for me to drive into town, search for a parking place, pay the fee, and spend much of the time worrying whether the Blue Meanies will get to it before I return and hand me a fine. No, I can get into and out of Edinburgh for free on my card and that’s what I now do, nine times out of ten. It is, as they say, a no-brainer.

What if we extended this “free” (we know it’s not free really, but free at point of use) benefit to everybody, young, old and in-between? The Scottish Government has been very keen to date on other “free” universal benefits so why not public transport?

I can hear the howls of protest already. How are we going to pay for it? How much will it cost? Why should tourists and visitors get free transport when they don’t live here?  Well, let’s just look at the costs involved. How might we pay for free public transport for all?

In Scotland, the National Concessionary Travel Scheme reimbursement budget for free bus passes for people over 60 is £198.3m for 2017/2018 (Scotland’s budget, 2017-18).  According to National Records of Scotland, the over 60 population accounted for 27.5% of the bus fare paying population in 2016.  The population share figure is based on a population excluding children under five who do not pay fares on buses, and includes half the population aged five to fifteen (reflecting lower fares paid by this age group).

Assuming a similar cost of providing free bus passes to the over 60s prevails across Scotland’s population, the additional cost of providing a bus pass to all people aged through 5 to 59 would be £523 million per year. The total cost of providing a bus pass to everyone ages five and above would be £721 million (£198.3m for over 60s plus £523m for ages 5 to 59.)

Within the latest National Concessionary Travel Scheme reimbursement budget there is a £10m shortfall in what it will actually cost to offer bus passes to everyone over the age of 60. When asked about this transport minister Humza Yousaf discussed “the possibility that options might be identified”. In order to make up the £10million shortfall, limiting the bus pass scheme to over 65s rather than over 60s is an option cited in the media.

But there are other, broader issues to be examined in assessing ways in making up this revenue. According to the latest Reported Road Casualties report (Transport Scotland, 2016) the total cost of road traffic accidents in Scotland was £1.13 billion (in 2015). This includes accidents that were fatal, required medical attention or where damage occurred.

The average cost for accidents involving injury is around £100,000 in Scotland and the average cost of any fatal road accident is £2.1m. These costs include the loss of life, economic costs, damage to vehicles and property and the cost of police and insurance administration.

In addition, according to the Information Services Division (NHS Scotland), of those young people (16-24 years old) admitted to hospital in an emergency, nearly one in eight (13%) were admitted as a result of a road traffic accident.

The cost of road traffic accidents, therefore, is much larger than the cost of extending the free bus pass scheme. Higher use of buses could help bring down the number of accidents (particularly among young people) and cost to the public purse. If the number of road accidents were halved the saving would be in the order of £650m, not that far off the £721m cost of free buses for all. Cut the number of accidents by two thirds and the savings outweigh the costs by £20m plus.

We should also look at road pricing and congestion charging.  We know that most of our towns and cities are struggling with the rising volume or traffic and therefore need to think carefully about how incentives to reduce traffic can be used to generate funds to invest in public transport. 

Based on updated figures from the revenues cited in the aborted congestion charging scheme for Edinburgh, around £200m to £300m could be raised from congestion charging each year across Scotland’s five main cities.  It is estimated that a similar amount could be raised through motorway and bridge tolls – charges abolished by the Scottish government but perhaps worthy of a second look. Add this roughly £500m to savings from road accidents and the free bus pass for all scheme is easily affordable with surplus funds to invest in additional modern buses to handle the increase in passengers.

So, somewhat paradoxically, this carrot and stick approach to encouraging folk out of their cars and into public transport, far from being an additional cost, could be a revenue generator for the public purse. Might the Scottish government be interested in further investigation of such a radical plan?  Sadly, I fear not. It probably pushes the envelope too far for its conservative (with a small “c”) thinking and is easy to damn with the same old “not invented here” criticism much beloved of government apparatchiks.

That said, I think it’s worth a look. You never know. But yet again I’m not holding my breath.

© Stuart Crawford and Thomas Kane 2017

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