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To: Scottish Government Minister for Transport & The Islands, Humza Yousaf MSP
Nationalise NorthLink Ferries
Ensure that the Northern Isles Ferry Service contract is returned to public operation, when the current 2012-18 contract with Serco NorthLink expires.
Why is this important?
Scotland's publicly contracted ferry services carried over 5.5 million passengers and 1.5 million vehicles, including road freight in 2016. Audit Scotland estimate the annual subsidy to be around £153m. Lifeline ferry services are crucial links between remote island communities and the mainland, enabling people to visit family, work and access health, education and other services. They will always be needed, whatever the available profit levels.
When the Scottish Government awarded the £243m 2012-18 Northern Isles Ferry Service (NIFS) contract for services between Aberdeen and Scrabster to Orkney and Shetland to Serco in May 2012, many thought that this would improve the service. In fact, despite a 10% (£18m) increase in subsidy Serco NorthLink and rising fares revenue, passenger and vehicle numbers have declined, along with punctuality and reliability of these lifeline services to remote Northern Isles communities. The Minister for Transport and the Islands, Humza Yousaf MSP announced on 2 February 2017 a review of ferry procurement policy, including the option of bringing all public ferry contracts permanently in-house, using a 'Teckal' exemption from EU competition and State Aid laws. In the short term, this has resulted in an extension to Serco NorthLink's current contract.
The Scottish Government has also confirmed that a taxpayer subsidised fares scheme, Road Equivalent tariff (RET) will be introduced on NIFS routes in 2018, adding up to £4m per year in public subsidy. RET was rolled out on the larger, publicly operated Clyde and Hebrides (CHFS) contract in October 2015, driving growth in passenger and vehicle numbers on the lifeline ferry network serving communities and businesses off Scotland's west coast. A major programme of investment in new vessels and harbour infrastructure is also planned on the current £1 billion CHFS contract, which was awarded in May 2016 to CalMac for an eight year period. We want the best for passengers, staff, communities, businesses and taxpayers from Northern Isles Ferry Services and the only way to achieve that is to Nationalise NorthLink.