Scottish Labour leadership contender Michael Marra has blamed the SNP government for allowing bus contracts to be placed overseas, even though decisions are made by operators working to procurement rules set by Westminster.
Mr Marra declared that he would “seek to ensure public grants and contracts in Scotland guarantee Scottish jobs”. He said his party would “push to change the rules around procurement in Scotland” and safeguard Scottish industry.
He made the call ahead of a campaign visit to Falkirk, where local MP Euan Stainbank had been supporting Alexander Dennis, the bus manufacturer which recently announced closure of one of its plants.
Mr Marra said it has been put at “existential risk by Scottish Government grant schemes which put money towards Chinese built buses”.
He added: “Public contracts in Scotland should have a Scottish jobs guarantee written into them – we need to end the offshoring of good jobs in Scotland while our industrial base withers.
Mr Stainbank said the Scottish Government had “designed consecutive grant schemes that failed to adequately put Scottish jobs at its heart and allowed public funding to support buses manufactured overseas while workers in Falkirk face losing their livelihoods.”
However, the Scottish government fund supporting bus building – ScotZEB – operates as a capital grant subsidy scheme rather than a procurement exercise. It is designed to comply with the UK government’s Subsidy Control Act 2022, which prohibits local content requirements as a condition of subsidy.
Former Deputy First Minister Kate Forbes led calls for reforms to the procurement and subsidy control legislation which would allow more work and contracts to go directly to Scottish firms, such as Alexander Dennis.
In an interview with Daily Business in March, she said: “The UK Government has been sitting on its hands when it comes to the policy levers which would make a vital difference to order numbers at Alexander Dennis and support domestic bus manufacturing in Scotland.
“Labour ministers are shamefully silent on the promises they made, including changes to current procurement rules which favour foreign competitors, something the Scottish Government and trade unions have consistently called for.
“It is vital that the UK Government ensures a long-term pipeline of orders and a supportive approach to reserved matters such as subsidy and procurement. A first step would be changes to the Subsidy Control Act 2022 in order to create that pathway for procurement reform.”
Ultimately, decisions on bus orders are made by the operators and in some cases the vehicles required are not built in Scotland. For instance, Ember ordered buses from China because ADL does not build the vehicles, specifically the coaches, that it requires. ADL does not build single decker buses required by some operators.
UK based manufacturers face particular challenges from China which has set up UK based companies to secure work that is then transferred to Chinese manufacturers. This has enabled China to increase its share of procurement from 25% in 2024 to 50% last year.
Mr Marra’s leadership rival Joe Fagan said he would judge the coming Scottish Budget against five clear tests of whether it delivers practical improvements for working people.
His first called for the Scottish Government to give communities the powers and funding needed to bring bus services back under public control.
He has made a minimum £15-an-hour rate for social care workers his second test, calling for the rate to be backed by improved sick pay and maternity and paternity provision, which have previously been promised but not delivered, with the aim of moving social care workers towards parity with colleagues doing comparable work in the public sector.
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