THE SCOTTISH Government will “explore what we can do” about reducing the cost of booking cabins on board ferries between Lerwick and Aberdeen when it is drawing up the new North Boats contract.
Transport minister Humza Yousaf used a visit to the islands on Tuesday to announce a long-awaited cut in fares for passengers and cars. But, while that news was broadly welcomed in the islands, many people have pointed out that cabins often make up a large proportion of the cost of travelling by ferry.
Shetland MSP Tavish Scott said he did not believe the argument for excluding cabins from the fare cuts was a strong one.
“We face a 12-hour overnight journey,” he told Shetland News. “I genuinely, strongly welcome additional monies to cut fares, but cabins should have been part of that deal because they are the service – they’re not an optional extra for all of us.
“We’re not going to get on the boat and lie in the bar all night, so the logic is they should have been part of the overall package, and we’d hope that would be recognised in future.”
Speaking on board the MV Hrossey on Tuesday morning, Yousaf told journalists that cabin fares had not been reduced at this stage because there is already a lack of capacity during busy periods and making them cheaper would have exacerbated that.
“We’ll certainly explore what we can do in that regard,” he said. “The reason why we haven’t reduced the cabin fares is fairly obvious – the occupancy of cabins in the summer months can be right up to the 100 per cent mark.
“We’ll certainly look to explore that and how to increase capacity in the future, but we also don’t want to do something that would have the unintended consequence that islanders would lose out.”
The announcement that foot passenger fares will be cut by around 40 per cent and car fares will drop by more than 30 per cent on average saw the SNP government fulfil a commitment in its 2016 manifesto.
But Yousaf acknowledged that the decision had been a long time in coming, with west coast routes having enjoyed reduced fares for a number of years.
He said it had been about “trying to find a consistent algorithm that would allow us to reduce fares right across the board however it was applied”.
The solution is a variation on the road equivalent tariff (RET) formula applied to Clyde and Hebrides services consisting of a fixed fare of £5 plus 80p per mile for cars and passenger fares of £2 plus 13p a mile.
Had the same RET model been applied it would have led to a colossal increase in fares between Shetland and the Scottish mainland.
For routes longer than 100 miles (including all routes between Aberdeen, Kirkwall and Lerwick) that variable element will be charged at only 50 per cent of the rate.
“That’s one element of perhaps why it’s taken a bit of time,” Yousaf said. “The other element is the budgetary considerations, but also what are the consequences of reducing fares.”
He said that in the Western Isles “unintended consequences have meant there have been capacity constraints”, and the government wanted to avoid that scenario in the Northern Isles.
VisitScotland’s Shetland manager Steve Mathieson said the fare cuts were “what we’ve been asking for for a long time”.
He is hopeful it will help the islands to appeal more broadly, in particular to families with young children.
“It’s certainly the first important step in being able to attract a greater variety of tourists to Shetland, and thereby grow the visitor economy,” Mathieson said, “so yeah, very important in that sense.
“Shetland is, in my opinion, the perfect destination for a family holiday, so if we can start attracting this new market it opens up all sorts of possibilities.”
He added that the expense of cabins was an “essential part” of the journey and it is “perhaps something that can be discussed further into the future” with a new ferry contract imminent.
The changes announced this week will come into effect in April 2018. That is around the time that Serco’s six-year deal had been due to expire, but with work to redesign the contract continuing, Yousaf said discussions continue on whether to extend the existing arrangement by 9-12 months, or “possibly even more than that”.
He didn’t entirely rule out more changes before then, saying Transport Scotland was “exploring with Serco any potential to increase cabin space, but that’s not easy to do… the new contract may present the best opportunity”.
Scott urged Yousaf to “clarify – and quickly” what the arrangements will be for re-tendering the route amid noises about possible renationalisation. The current situation “doesn’t seem very satisfactory”, he said: “They’re either going to tender or they’re not.”
Serco NorthLink managing director Stuart Garrett described the fare cuts as a “fantastic announcement” and a “huge opportunity”, adding he looked forward to working with tourism providers to cope with any boost in demand.
“We all know that there are times of peak demand, times where visitor numbers are already high,” he said, “but today’s announcement and the opportunity to introduce an RET variant structure from… April 2018 really opens up the market, and we’re up for the challenge.”
He confirmed that Serco Ltd, which won the £240 million contract from NorthLink back in 2012, was intent on bidding for a renewed deal while its operational team is “very focused on the contract delivery” in the meantime.
SNP Highlands and Islands list MSP Maree Todd said she was “confident” the government would “address issues that arise in relation to cabin costs, particularly for the new contract in 2019”.
She added the announcement “really is an excellent start and will make a substantial difference to people’s lives” and showed the government “listens, and responds promptly, to the needs of islanders and folk across rural Scotland”.