(1)A London local service agreement shall be of no effect at any time when the party to the agreement who is not Transport for London does not hold—
(a)a PSV operators' licence, or
(b)a permit granted under section 22 of the [1985 c. 67.] Transport Act 1985 (a community bus permit).
(2)A London service permit shall be of no effect at any time when the holder of the permit does not hold a licence of the description specified in subsection (1)(a) above, or a permit of the description specified in subsection (1)(b) above.
(3)In any case where a local education authority is providing a service falling within section 46(1) of the [1981 c. 14.] Public Passenger Vehicles Act 1981 (no requirement for a PSV operators' licence where a school bus is being used to provide a service)—
(a)subsection (1) above does not apply in relation to any London local service agreement pursuant to which the local education authority is providing the service, and
(b)subsection (2) above does not apply in relation to any London service permit by which the local education authority is authorised to provide the service.