Part II: Local Transport
Sections 108 to 113: Local Transport Plans and Bus Strategies
87.Sections 108 to 113 provide a statutory basis for local transport plans and bus strategies in England and Wales outside London. London has its own transport planning system under the Greater London Authority Act 1999 (“the 1999 Act”). Local transport plans already exist in a non-statutory form as the basis for the Department’s allocation of capital funds for local transport expenditure, but the Act puts them on a statutory basis for the first time.
88.Section 108 and 109 impose a duty on each “local transport authority” (defined in section 108(4)) as councils of counties and unitary authorities in England, principal councils in Wales and passenger transport authorities (“PTAs”), to formulate transport policies and publish them as a local transport plan. The policies must promote ‘safe, integrated, efficient and economic transport’ and must have regard in particular to the needs of the elderly and people with mobility problems. They must also provide a framework for, inter alia, the promotion of improvements to bus services under the powers of Part II and the introduction of charging regimes under Part III. Section 99 further provides that plans must be kept under review and altered if necessary and in any event must last no longer than five years.
89.Section 109(5) and (6) exempt a local transport authority from producing such a plan where before the date when section 108 comes into force they have already prepared a document in a form and manner equivalent to that required under the Act for local transport plans. That document is treated as a local transport plan but it must be replaced no later than 31st March 2006, in England or a date prescribed by the National Assembly for Wales (the “NAW”), in Wales.
90.Section 110 requires local transport authorities to prepare, as part of their local transport plans, a bus strategy containing policies as to how best to carry out their various functions in order to secure the provision of appropriate bus services in their area. The functions in question are largely contained either in the Act or in the Transport Acts of 1968 (“the 1968 Act”) and 1985 (“the 1985 Act”) as amended by the Act.
91.Section 109(3) and (4) and 111 impose requirements as to consultation during the preparation of plans and bus strategies and as to the publication of plans and strategies and requires authorities to make copies available at no more than cost. Section 112 requires them to have regard both to guidance issued by the Secretary of State or NAW and to the needs of the elderly and people with mobility problems.
92.Section 113 makes special provision for the duties of local authorities in metropolitan counties, specifying which duties must be discharged jointly by the PTA and the metropolitan district council and which are to be separate responsibilities for each.
Sections 114 to 123: Bus Services: Quality Partnership schemes
93.Sections 114 to 123 empower local transport authorities, either alone or jointly, to set up Quality Partnership (QP) schemes as part of the process of implementation of their current bus strategy. A QP scheme entails the authority providing special facilities, and setting standards to be observed by bus operators as a condition of using the facilities. A scheme must implement the bus strategy and be aimed at improving local bus services for the benefit of bus users or at improving the environment. “Local services” are defined in section 162(3) by reference to the 1985 Act. In essence they are bus services with stopping places less than 15 miles apart (section 2 of the 1985 Act).
94.Similar schemes currently exist as voluntary arrangements in over 100 towns and cities in England and Wales, where local authorities have agreed to exercise their functions (especially as regards traffic management) in particular ways and operators in return have agreed to provide improved bus services with the aim of promoting bus use. The principal difference between these and schemes created under the Act is that the latter will be enforceable at law.
95.Section 114 specifies the nature of a QP scheme. The facilities to be provided under a scheme must include facilities (such as bus lanes and shelters) at specific locations along bus routes (or where appropriate prospective bus routes) which bus operators can use; they may include other ancillary facilities also. Information facilities may not be included if the authority has determined that these must be provided throughout their area under section 139 (which is mentioned at paragraph 114 below). Standards which may be imposed on operators under a statutory QP scheme do not extend to service frequency or timing, since separate provision is made for this by the service subsidy provisions of section 9A of the 1968 Act and section 63 of the 1985 Act and a comprehensive local authority approach to determining timetables is provided for in the separate Quality Contracts sections (paragraphs 102 to 109 below). Both the facilities and the new standards must in themselves improve the quality of local services in the relevant area. The Act does not prevent authorities and operators from making voluntary arrangements as at present.
96.Section 114(8) to (10) require QP schemes to be made jointly by the local transport authority and the traffic authority where facilities cannot be provided without the making of a traffic regulation order for a road or roads for which the local transport authority is not the traffic authority. Traffic authorities in England and Wales (outside London) are the Secretary of State or NAW in the case of trunk roads and the non-metropolitan county councils and metropolitan district councils in the case of other roads. “Traffic regulation order” is defined in section 162(1).
97.A scheme may not be made without prior consultation with bodies specified in section 115, including bus operators, representatives of bus users and other local authorities. Sections 116 and 117 provide for the making (as proposed or with modifications) and the postponement of schemes. In particular there is provision for excluding certain services from schemes where this is considered appropriate (for example a community bus service acting as a feeder to a main bus route). The Secretary of State or the NAW may issue guidance on QPs and make regulations about detailed matters under sections 122 and 123.
98.Once a scheme is in operation, it must remain so for at least 5 years (section 116(2)) and duties are placed:
on the authority to provide the necessary facilities (section 118(1));
on the bus operators to meet the necessary standards if they use the facilities (section 118(4)),
except where any of them is temporarily unable to do so because of circumstances beyond its control.
99.Compliance by the operators will be secured under the existing registration system for local bus services. Paragraphs 10 and 22 of Schedule 11 amend sections 26 and 111 of the 1985 Act to empower traffic commissioners to take enforcement action if an operator is in breach of his duty under section 118(4).
100.Section 119 enables the Secretary of State or NAW to make special provision by regulations covering cases where a QP scheme incorporates facilities which already exist.
101.Section 120 makes provision for the variation and revocation of QP schemes and section 121 specifies which authorities are responsible for the making of the variation and the implementation and subsequent variation or revocation of a scheme which has been varied. In the case where the Secretary of State or NAW, as a trunk road authority, jointly responsible for a scheme, wishes to remove scheme facilities from a trunk road, he or it may do so using powers to revoke traffic regulation orders under paragraph 27 of Schedule 9 to the Road Traffic Regulation Act 1984. However, by virtue of an amendment to that paragraph made by paragraph 8 ofSchedule 11, this may be done only after consultation with other responsible authorities. A trunk road authority is then relieved of any further responsibilities for those facilities under the scheme (section 118(3)).
Sections 124 to 134: Bus Services: Quality Contracts schemes
102.Sections 124 to 134 enable local transport authorities, either alone or jointly, to make a Quality Contract (QC) scheme, provided that they are satisfied that it is the only practicable way to implement their bus strategy (or strategies) and also that the scheme will implement it (or them) in a way which will deliver best value, i.e. be economic, efficient and effective (section 124(1)). Under a QC scheme, the authority will determine what local services should be provided in the area concerned (and to what standard) and will let contracts with bus operators granting them exclusive rights to provide services to the authority’s specification.
103.Section 124 defines what a QC scheme is and what a “quality contract” itself is. It imposes an obligation on the authority to keep under review operators’ compliance with the obligations imposed on them by QCs.
104.Sections 125 and 126 require an authority to publicise and consult upon a proposed scheme before submitting it to the Secretary of State or NAW (“the appropriate national authority”) for approval, stating the reasons why they want to make the scheme. There is a requirement in particular to consult operators and users’ representatives. There is provision, when a scheme has been submitted for approval, for operators affected by it to put objections to the appropriate national authority. That authority may approve the scheme only if satisfied that it is in the public interest (section 126(4)(b)) and may approve it with modifications after interested persons have been consulted (section 126(5) and (6)).
105.Section 127 describes what a scheme must contain and in particular provides that certain services may be excluded from it (subsection (4)) and that it may vary or revoke a QP scheme (subsection (6)). It may not come into operation for at least 21 months after it is made. This is in recognition of the fact that some bus operators currently operating in the area may lose the right to do so, and must be allowed due time to adjust and redeploy assets. A scheme may not last for more than 10 years. Section 128 provides that the operation of a scheme may be postponed.
106.Section 129 provides that once a QC scheme is in operation sections 6 to 9 of the 1985 Act cease to have effect in the relevant area and no local service may be provided in that area except in accordance with a QC. Section 6(2) of that Act provides that:-
“no [local] service shall be provided in any traffic area in which there is a stopping place for the service unless –
the prescribed particulars of the service have been registered with the traffic commissioner for that area by the operator ... ”
and sections 7 to 9 make supplementary provision. The normal role of the traffic commissioners in monitoring services is therefore excluded and enforcement becomes a matter for the local transport authority in accordance with the terms of their QC – see section 124(7). (A “traffic area” is an area designated under the provisions of section 3 of the Public Passenger Vehicles Act 1981 and a traffic commissioner is appointed for each area by virtue of section 4 of that Act.)
107.Where a service is excluded from a QC scheme, however, sections 6 to 9 of the 1985 Act continue to apply to it and the traffic commissioner may take action for breach of any conditions under which the service is excluded (section 129(2) and (3)).
108.Section 130 provides for the letting of individual contracts. Tenders must be sought by general invitation no later than 3 months after the making of the scheme and contracts when let may last no more than 5 years. Tenders may only be accepted from licensed operators of public service vehicles or persons holding a community bus permit under section 22 of the 1985 Act (subsection (5)). Section 131 provides for cases where the normal tender procedure does not apply. Express provision is made for emergencies but the section may be extended by regulation to cover other cases. Regulations may limit the duration of these emergency contracts so as to ensure that the provisions of section 118 are not improperly circumvented.
109.Section 132 makes provision for the variation or revocation of a scheme. There is also a power, in section 133, for the appropriate national authority to make regulations, allowing it to revoke the scheme before it comes into operation in circumstances set out in the regulations (for example, an unexpected collapse of the tender process).
Sections 135 to 138: Bus Services: Ticketing Schemes
110.Sections 135 to 138 empower local transport authorities, alone or jointly, to set up ticketing schemes, whereby operators of local bus services are required to make and implement arrangements to accept each other’s tickets or provide integrated ticketing in ways specified in the scheme. “Ticketing scheme” is described in section 135(3) to (5) and may include provisions requiring bus service operators to make available tickets for journeys both for separate bus services and intermodal journeys. In making a scheme, however, the local transport authorities must be satisfied that this is in the public interest and implements their bus strategy.
111.Many bus operators are already involved in area-wide ticketing. But they cannot at present be compelled to do so by law.
112.Section 136 imposes consultation requirements upon an authority intending to introduce such a scheme. Section 137 provides that an authority may make the scheme as proposed or with modifications (subsection (1)) and may vary a scheme (subsection (6)). It also imposes requirements as to publicity when a decision is taken to make a scheme and requires an authority to obtain the agreement of train or tram operators before making a scheme which applies to tickets for journeys on those modes.
113.Section 138 imposes a duty on operators to implement the scheme from the date it comes into force (not less than 3 months after making: section 137(3)). Failure to do so may attract enforcement action by the traffic commissioner under section 26 or 111 of the 1985 Act, by virtue of amendments made to those provisions by paragraphs 10 and 22 of Schedule 10 to the Act. (See also section 155(1).)
Sections 139 to 141: Bus Services: Provision of information
114.Sections 139 to 141 require local transport authorities, alone or jointly (see section 141(3)), to determine in accordance with their local transport plan what local bus information (as defined in section 139(6)) should be made available, and how, and to seek to arrange with operators for its provision. If arrangements cannot be made by agreement, the authority must make the information available or secure that it is made available, and in such a case it is given power to recover reasonable costs from the operators concerned (section 140).
115.Section 141 provides that, in exercising their powers, the authority must have regard to economy, efficiency and effectiveness, and must not discriminate against operators.
116.A duty is imposed on operators by section 140(3) to furnish information to the authority or a third party in such circumstances, to enable the authority to meet its obligations. Failure to do so may attract enforcement action by the traffic commissioner under section 26 or 111 of the 1985 Act, by virtue of amendments made to those provisions by paragraphs 10 and 21 of Schedule 11 to the Act.
Section 142 and 143: Bus Services: Miscellaneous
117.Section 142 extends the powers of the traffic commissioners to impose traffic regulation conditions on local bus services under section 7 of the 1985 Act. These powers currently allow the commissioners, at the request of local authorities, to impose restrictions on routes and stopping places in the interests of preventing danger to road users or reducing severe traffic congestion. Under this provision, a commissioner will also be able to do so for the purpose of reducing or limiting noise or air pollution.
118.Section 143 empowers local transport authorities to obtain from operators of local services information which they may need in connection with their public transport functions. The information obtainable may be demanded in any reasonable form but is limited to total passenger numbers, total bus mileage and an operator’s fare structure for the whole or part of their area (subsections (2) and (3)). There is provision for the protection of commercially sensitive information in subsections (4) to (6).
Section 144: Bus lane contraventions: penalties
119.Section 144 provides for the Secretary of State or the National Assembly for Wales to make regulations in connection with allowing approved local authorities outside London, Transport for London and London local authorities to impose penalty charges for moving bus lane contraventions, and the payment of penalty charges. The section provides that regulations made must include provision for matters such as setting the levels of penalty charges, specifying the person responsible for paying the penalty charge and the application of sums received from penalty charges. They may also include matters such as exemptions from penalty charges, provision for discounts or surcharges and the keeping of accounts
120.The section gives the Lord Chancellor powers to make regulations about the notification, adjudication and enforcement of penalty charges. This is to ensure that the same requirements apply to England and Wales. The section does not give local authorities the power to stop vehicles; only the police may do so. As the section does not remove the power of the police to enforce moving traffic offences, it provides that motorists should not be subject to double jeopardy and prosecution by the police and local authority for the same offence or contravention. The regulation would be subject to negative resolution procedure by virtue of section 160
Sections 145 to 150: Mandatory Travel Concessions outside Greater London
121.Sections 145 to 150 give elderly and disabled persons (as defined in section 146) entitlement to a half-fare concession on local bus travel within the area of a “travel concession authority” and during the “relevant time” (expressions also defined in section 146). Eligibility is conditional on the holding of a permit issued by the travel concession authority which may make no charge for it (section 145(2)). There is provision enabling the Secretary of State or the NAW, after appropriate consultation, to issue guidance to assist authorities in determining who is a ‘disabled person’ for the purpose of eligibility for a permit (subsections (4) and (5)).
122.Section 147 empowers the Secretary of State or the NAW:
to extend the eligible categories to other persons eligible to participate in discretionary schemes made under section 93 of the 1985 Act (subsection (7) of that section –now amended by paragraph 15 of Schedule 11 – specifies who they are);
to extend the qualifying journeys to those on other public passenger transport services and journeys to and from places outside an authority’s area (as defined in section 63(10) of the 1985 Act, a definition applied to this Act by section 162(3);
to vary the relevant times;
to improve the concession to better than half the fare.
123.Section 145(6) makes provision whereby a person can opt for an alternative to the statutory minimum concession. If an authority is offering a concession under a scheme made under section 93 of the 1985 Act (a ‘discretionary concession’) which is more attractive to a particular person, he or she may agree not to be entitled to the mandatory concession in order to take up the discretionary concession. For example, a discretionary concession might consist of tokens which can be used on any mode of transport, an arrangement which would be more attractive to a person who finds travel by bus difficult. He or she could agree not to receive the mandatory concession in order to benefit from the discretionary scheme if the scheme so provides. The period during which such agreements are binding may, along with other matters, be prescribed in regulations.
124.Section 148 provides that systematic failure by operators to provide the mandatory concession is an offence, attracting a fine not exceeding level 3 on the standard scale (currently £1,000).
125.Sections 149 and 150 make provision for the reimbursement of operators by local authorities, this being based broadly speaking on the present system under the 1985 Act.
Section 151: Mandatory Travel Concessions in Greater London
126.Section 151 makes separate provision, to similar effect, for Greater London, by modifying the provisions in the Greater London Authority Act 1999 which define when the reserve free travel scheme will be triggered. If a half-fare concession is not made available to eligible elderly and disabled persons on journeys on the London bus network (as defined in section 181(3) of that Act) beginning at specified times, who hold an appropriate travel permit (which must be issued free of charge), the reserve scheme will come into effect. The Secretary of State has power to improve the concession to better than half the fare (section 151(12)).
127.The categories of persons eligible to receive travel concessions over and above the mandatory half-fare concession are extended to elderly and disabled persons defined in section 240(5) of the 1999 Act as amended by section 151(4). Apart from the imposition of the mandatory concession, however, nothing in the Transport Act requires any change to be made to the present voluntary free scheme agreed between the Boroughs and London Transport or to any future free scheme agreed by virtue of the 1999 Act.
Sections 152(4) and 153 and Schedule 10: Competition provisions
128.Section 152(4) removes the present constraint, imposed by section 92(1) of the 1985 Act, that in exercising powers to subsidise public passenger transport services under section 9A of the 1968 Act and section 63 of that Act local authorities must behave “so as not to inhibit competition”, a provision which requires them to consider whether competition might be inhibited, however slightly. (The duty also applies to London Regional Transport to the extent that it still subsidises such services.) This is replaced with a new duty to have regard to the interests of the public and of operators and, in the case of local transport authorities, is modified by the provisions referred to in the next following paragraph.
129.Section 153 introduces Schedule 10 which contains provisions applying a competition test in relation to the exercise (including the proposed exercise) of three functions of local transport authorities, namely:
the making and varying of QP schemes
the making and variation of ticketing schemes
invitations to tender and acceptance of tenders for subsidised services under the 1985 Act (see paragraph 1 of the Schedule).
130.Paragraph 2 of Schedule 10 specifies that the test is met unless the exercise of a function has, or is likely to have, a significantly adverse effect on competition which cannot be justified in accordance with that paragraph. A scheme or an exercise of service subsidy functions may be justified if its purpose is one of those set out in paragraph 2(3) and the effect on competition is, or is likely to be, proportionate to the achievement of that purpose.
131.Paragraphs 3 and 4 provide for a relevant authority or operator of local services to apply to the Director General of Fair Trading (the “DGFT”) either before or after exercise of the function for a decision on whether it will meet or has met the competition test. Paragraphs 5 to 10 provide for the DGFT to investigate on his own initiative, for example, after a complaint has been received. For the purpose of an investigation he is given powers to obtain information and documents by paragraphs 6 and 7, subject to the provisions as to confidentiality in paragraphs 8 and 9. Any decision made on such an application or following such investigation must be published with reasons (paragraph 11).
132.The DGFT may enforce his decisions by giving to the authority or authorities exercising the function directions in accordance with paragraph 13, including directions to vary or revoke a scheme or to require a tender contract to be entered into with another operator.
133.Paragraph 14 makes it an offence, punishable with a fine up to level 5 on the standard scale (£5,000), to give the DGFT false or misleading information. Paragraph 16 makes provision for the charging of fees by the DGFT in connection with his functions under the Act.
Sections 152(2) and (3) and 154 to 158: Financial provisions
134.Section 152(2) amends the criteria by reference to which local authorities must decide which tender to accept in the case of tenders for additional subsidised public transport services under section 9A of the 1968 Act and section 63 of the 1985 Act (which are mentioned further at paragraph 140 below). It introduces a new ‘best value’ test by requiring local authorities to have regard to economy, efficiency and effectiveness and also to have regard to the relevant bus strategy, and environmental issues, namely the reduction or limitation of traffic congestion, noise or air pollution. Section 89(3) of the 1985 Act (which prohibits the inclusion of employment conditions in the terms of tender) is repealed by virtue of Schedule 31 (Part II).
135.Section 154 makes new statutory provision for grants to bus operators, including power to make regulations as to the classes of bus services for which grant may be paid, and the method of calculation. If and when introduced, this power will replace the current Fuel Duty Rebate (“FDR”) scheme under section 92 of the Finance Act 1965 with a more flexible power enabling grant to be paid by the Secretary of State or the NAW to bus operators on a different basis from the present scheme. Provision could, for example, be made for differential rates of grant to encourage the use of more environmentally friendly fuels or vehicles.
136.Section 155 makes alternative provision to section 111 of the 1985 Act (traffic commissioners’ powers in respect of unreliable or unregistered services) as from the time when FDR is replaced by section 154. That section presently allows the traffic commissioners to demand repayment of 20% of eligible FDR in the event of an operator being found to have contravened section 6 of the 1985 Act. Under this section, the traffic commissioners will be able to impose a financial penalty. The maximum penalty is £550 (or such other sum as may be prescribed by order - subsection (3)(b) - multiplied by the number of vehicles the operator is licensed to use under his public service vehicle licence, representing approximately the same level of penalty as the current penalty. There will continue to be a right for operators to appeal to the Transport Tribunal, as now.
137.Sections 156 and 157 empower the Secretary of State or NAW to make grants to local transport authorities other than PTAs (section 156) and to PTAs (section 157) for general local transport purposes. Grants may be paid subject to conditions or not. One effect of these sections is to put on a permanent statutory basis support for rural local transport in England and Wales which is currently covered by special grant reports approved annually by Parliament under section 88B of the Local Government Finance Act 1988.
138.Section 158, with paragraph 22 of Schedule 11, amends the present power of the traffic commissioner under section 111 of the 1985 Act to impose a penalty on a bus operator, if he fails “to a significant extent” to operate his services as registered under section 6 of the 1985 Act. Currently the commissioner must impose a penalty of 20% of the FDR rebate paid in the previous three months. The amendments will enable a commissioner henceforth to impose a penalty between 1% and 20% and he will no longer need to satisfy himself that the operator has failed “to a significant extent”, thus allowing a more flexible, and perhaps more frequent, use of the power. (This amendment only has effect, however, until such time as section 111 is replaced by the provisions of section 154.)
Section 160 to 162 and Schedule 11: Supplementary
139.Sections 160 to 162 make provision for regulations and orders under Part II of the Act and introduce the minor and consequential amendments in Schedule 11, and provide for definitions.
140.In particular, paragraphs 3 and 11 of Schedule 11 amend section 9A of the 1968 Act and section 63 of the 1985 Act in two respects. First, they remove the obligation imposed on local authorities and PTAs to formulate policies as to what subsidised public transport services are required in their area. This is now replaced by the duties under sections 98 and 100 to produce local transport plans and bus strategies. The duty in those enactments to secure the provision of services which would not otherwise be provided commercially is retained. In the second place, they replace the duty, also imposed on local authorities by those sections of the 1968 and 1985 Acts, “not to inhibit competition” when exercising powers to promote public passenger transport services by a “best value” duty requiring local authorities to have regard to a combination of economy, efficiency and effectiveness.
141.Paragraphs 5 and 13 of the Schedule remove disabilities imposed (by the Local Government Act 1972 and the 1985 Act) on local councillors who are either unpaid directors or employees of public transport companies preventing them from taking part in or voting on certain matters relating to those companies. They amend that legislation by providing that (in the case of the 1985 Act) councillors who are members of a company’s controlling authority or (in the case of the 1972 Act) councillors who are members or any other local transport authority may take part and vote in debates on a local transport plan or bus strategy. (A “public transport company” is defined in section 72(1) of the 1985 Act and is, in brief, a company formed by a local council or PTA to carry on a bus undertaking, as defined in section 66 of that Act, and the company’s “controlling authority” is a council or PTA.)
142.Paragraph 7 of the Schedule amends the Road Traffic Regulation Act 1984 as regards the making or revocation of traffic regulation orders in connection with QP schemes, if the Secretary of State or NAW consents.
