Bus passengers across Dundee have been warned they could face price hikes if a flagship government transport scheme runs over budget again.
The National Concessionary Travel Scheme allows over 60s and disabled passengers to travel for free on buses with participating bus operators.
The scheme is funded through Transport Scotland, which reimburses the majority of the costs incurred by bus operators.
But now it has been revealed that the scheme’s 2018/19 budget overran by more than £6 million – and that Xplore and Stagecoach buses in Dundee worked for a week without payment earlier this year.
North East MSP Bill Bowman, who made the discovery, said: “Last week I was made aware of the situation in Dundee whereby public transport operators carried concession customers free of charge for six days in March – a week in effect without payment.
“The reason being Transport Scotland’s original under-budgeting of the national concessionary travel scheme.
“It’s simple business for companies. When they repeatedly see a shortfall in revenue they need to make that up elsewhere. The financial model that the government uses in its annual negotiations has been the same for a number of years. If we are going to drive up public transport use and make our cities greener, we have to address this model.”
A spokesman for the Scottish Executive and Confederation of Passenger Transport (CPT), the trade association for the UK’s bus and coach firms, said: “CPT is keen for there to be no repeat of the concessions scheme budget breach that occurred in 2018-19.
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“To that end, we are working with Transport Scotland to agree a process of greater scrutiny of the scheme throughout the year.
“If costs appear likely to exceed the budget we should be aware of this at an early stage and can discuss options to address this.
“Mr Bowman is correct that if no action is taken at that stage then operators face receiving reduced payments for providing the scheme on the government’s behalf.
“Should this happen operators may have to reluctantly consider a range of measures to mitigate for it, including cutting services or revising fare levels.
“This could have a real impact on the wider bus network and the buses’ ability to play its role in enabling accessibility and social inclusion.”
‘Forecasting is not an exact science’
A Transport Scotland spokesman said: “Our officials recently met with the Confederation of Passenger Transport to discuss the concessionary travel scheme and agreed to work with the industry to improve forecasting and monitoring and to review the reimbursement model.
“The current reimbursement model – last reviewed in 2017 – is rerun annually using the latest available data on fares, costs and journey numbers to set reimbursement terms for the coming year.
“The budget cap is set on the basis of forecasts agreed with the industry. The cap for 2018-19 was £202.1 million, 3% higher than for 2017-18. Inevitably, however, forecasting is not an exact science.
“Actual fares are determined by individual operators and journey numbers are influenced by many factors, including the weather.
“We also provide £53.5 million a year in bus service operator grants to keep fares affordable and support services which might not otherwise be commercially viable.”