Transport Scotland Warns Sector Faces Stalled Growth Without Strategic Investment

A new report from Transport Scotland has underlined the crucial role of the transport sector in the nation’s economy, while warning that financial pressures are limiting opportunities for growth and improvement.

The report, Connecting Scotland – The Value of Transport, reveals that transport contributes around £10 billion in Gross Value Added (GVA) each year and supports approximately 150,000 full-time equivalent jobs — roughly 7% of Scotland’s workforce and GVA.

Funding pressures

Despite this contribution, the report highlights significant barriers to expansion. The most pressing challenge is a “difficult fiscal outlook.” While capital investment in Scotland’s transport network has historically matched the UK average, it lags behind levels seen in comparable OECD countries.

In the 2025–26 budget, £2.128 billion — more than half of the £4.009 billion allocation — has been earmarked for capital funding. However, the report warns that this share is unlikely to rise as a proportion of GDP in the coming years. Forecasts from the Office for Budget Responsibility suggest that capital spending will remain flat as a percentage of GDP between 2023–24 and 2029–30.

With limited increases expected, the report cautions that most of the budget will continue to be directed towards maintaining existing infrastructure rather than investing in new projects. The scale of ageing assets across Scotland, many of which now require costly emergency repairs, only adds to the financial strain.

Hugh Gillies, director of roads at Transport Scotland, recently described the challenge:

“We have an issue in this country which is starting to show itself — the age of our structures. When you crack open these old structures, it is not what you expect. They were built to the standards of the day, but it’s really challenging and really expensive.”

Seeking new funding models

To address the funding gap, Transport Scotland is urging a “strategic approach” to project delivery and greater collaboration with the private sector. The report points to recommendations from the Advisory Group on Economic Recovery in 2020, which argued that public investment should be used more effectively to leverage private finance for new assets and network improvements.

Transport’s wider value

The report also highlights the everyday importance of Scotland’s transport system. Travel-to-work figures increased between 2022 and 2023, with most people commuting by car (63%), and smaller proportions using buses (10%) and trains (5%). Meanwhile, freight movement originating in Scotland accounted for around 134 million tonnes transported by UK HGVs in 2023.

Cabinet Secretary for Transport Fiona Hyslop stressed the sector’s broader economic and social impact:

“Transport has a transformative impact on people’s lives. It gets goods to market, people to their jobs, connects communities, and reliable public transport offers people an alternative to the car. It is clear that transport is a foundation of society and our economy.The transport sector supports over £10 billion in terms of Scotland’s Gross Value Added and around 150,000 full-time jobs – so transport certainly pulls its weight, and I believe we can do even more.Investing in transport is investing in people. The wider impacts transport has on physical health, mental health, wellbeing, access to healthcare, education, and jobs is proof of that.”

Outlook

While the report recognises the fiscal realities facing Scotland, it makes clear that without long-term planning, innovative funding models, and continued investment, the sector may struggle to expand beyond its current role of maintaining ageing infrastructure.