Part 3: Bus Services
Sections 13 to 18: Quality partnership schemes
68.Sections 13 to 18 amend provisions on quality partnership schemes in sections 114 to 123 of the TA 2000. As section 114 stands, before making such a scheme, the local transport authority must be satisfied that it will benefit the users of local bus services by improving the quality of such services, or will reduce or limit traffic congestion, noise or air pollution. These sections extend to England and Wales.
*A quality partnership scheme is a scheme made by a local transport authority under which that authority provides particular facilities at specific locations along the routes used by local bus services, and operators of local services who wish to use those facilities agree to provide services of a particular standard.
Section 13: Quality partnership schemes
69.Section 13 amends section 114 of the TA 2000. Section 114(6)(b) of the TA 2000 currently excludes requirements as to frequency or timing of services from the description of a “standard of service”. The effect of subsection (5) is to amend section 114(6)(b) so that such requirements may explicitly be included in a quality partnership scheme. Subsection (6) inserts new subsections (6A) and (6B) into section 114. The effect of subsection (6A) is to stipulate that requirements as to maximum fares may be specified in a scheme. Subsection (6B) provides that a scheme may include requirements as to frequencies, timings and maximum fares only if there are no “admissible objections” from relevant bus operators (see also notes on section 18 below). The effect of the amendment in subsection (7) (which inserts a new subsection (6C) into section 114) is to enable both facilities and service standards to be phased in on predetermined dates over a period of time, rather than the current procedure under which all facilities and standards must be available when the scheme takes effect.
70.Subsection (4) inserts new subsections (3A) to (3D) into section 114 of the TA 2000. The purpose of these provisions is to enable a local transport authority, in appropriate circumstances, to specify in a quality partnership scheme any restrictions which are to be imposed on the registration of certain local services. Such restrictions can be imposed only where the local authority considers that the provision of additional local services in the area of a quality partnership scheme may be detrimental to the provision of services under that scheme. Any scheme which includes restrictions on the registration of local services must also specify the criteria to be used by traffic commissioners when deciding whether or not to accept an application to register a local service. (See also notes on section 48.)
Section 14: Notice and consultation requirements
71.Section 14 amends section 115 of the TA 2000 (notice and consultation requirements) to require any notice which is given about proposals to make a scheme to include details of any proposed restrictions on the registration of local services, and the criteria against which any applications to register such services will be judged (see paragraph 70 above). Subsection (3) also amends the description of “relevant local authority” that must be consulted if affected by the scheme, so as to include non-metropolitan as well as metropolitan district councils. This would bring the provision into line with the consultation requirements for quality contracts schemes under section 125 of the TA 2000.
Sections 15 to 17: Provisions relating to phased implementation of schemes
72.These sections make consequential amendments to sections 116 to 118 of the TA 2000 to provide for the phased implementation of quality partnership schemes and the ability to postpone any part of a scheme, not just the whole of it.
Section 18: Regulations about schemes which specify frequencies, timings or fares
73.This section amends section 122 of the TA 2000, which makes provision for regulations about quality partnership schemes. The purpose of the amendments is to enable regulations to make specific provisions in respect of quality partnership schemes that include requirements as to frequencies, timings or maximum fares.
74.Subsection (2) inserts a new section 122(1)(aa), which enables regulations to make provision with respect to the “content or operation” of such schemes, in addition to “the procedure to be followed when making, varying or revoking a quality partnership scheme” (which is provided by the existing section 122(1)(a)). This is to allow regulations to cover matters such as those mentioned in new section 122(3), discussed below.
75.Subsection (3) inserts new subsections (3) to (6) into section 122. These new subsections provide that, as regards schemes which include requirements as to frequencies, timings or maximum fares, regulations made under section 122(1)(a) and (aa) may in particular make provision for a number of specified matters.
76.The provisions would enable such regulations, for example, to:
specify certain circumstances (such as de minimis conditions) in which requirements as to frequencies, timings or maximum fares, or changes to such requirements, could be included in a scheme without needing to meet the requirements in section 114(6B) about admissible objections (new subsection (3)(a));
specify that, where schemes include requirements as to frequencies, timings or maximum fares, they must also include provision about how and when such requirements may or must be set, reviewed and revised (new subsection (3)(b), read with subsection (4));
specify that requirements as to frequencies, timings or maximum fares may be revised only if there are no “admissible objections” from “relevant operators” (new subsection (3)(c));
disapply the above requirements in prescribed circumstances where a scheme is subject to postponement under section 117 (new subsection (3)(d));
define the terms “admissible objection” and “relevant operator” for the purposes of section 114(6B) and section 122(3) (new subsection (3)(e) and (f)); and
make provision as to the determination of whether an objection is an “admissible objection”, or an operator is a “relevant operator”, within the meaning set out in regulations (new subsection (3)(g)).
77.The effect of new section 122(5) is to ensure that, where requirements as to frequencies, timings or maximum fares are revised in accordance with provision made in accordance with the new section 122(3)(b) described above, the provisions of section 120 of the TA 2000 (variation or revocation of schemes), which include requirements as to notice and consultation, do not apply.
78.New section 122(6) provides that regulations may make provision about the appointment and payment of certain persons in connection with the determination of whether an objection is an “admissible objection” or an operator is a “relevant operator”.
Sections 19 to 45: Quality contracts schemes
79.These sections amend, and insert new provisions in relation to, sections 124 to 134 of the TA 2000, which provide for the making of quality contracts schemes (“QCSs”) in England and Wales. A quality contracts scheme is a scheme under which the local authority determines the local bus network for the area to which the scheme relates. Where such a scheme is in place local bus services in that area can only be provided under quality contracts (with the exception of services specifically excluded from the scheme by virtue of section 127(4) of the TA 2000, or services registered in accordance with new section 6B of the TA 1985 — see notes on section 49). A quality contract is a contract under which the authority grants a particular operator the exclusive right to operate certain services following a competitive tender.
80.One effect of the amendments is to replace the existing requirement that a quality contracts scheme must be the “only practicable way” of implementing the policies in the local authority’s bus strategy with a new set of criteria.
*Section 110 of the TA 2000 provides that a bus strategy must be included within a local transport authority’s local transport plan. Section 10 specifies that a bus strategy is no longer required.
81.The provisions also abolish the requirement for quality contracts schemes in England to be approved by the Secretary of State; instead, they establish a new type of board (“QCS boards”) to provide advice and recommendations to the authority proposing to make the scheme. A separate board is to be assembled for each application. There is a right of appeal to the Transport Tribunal against an English local transport authority’s decision to make a quality contracts scheme. The amendments also include a number of other changes to allow schemes to be implemented in stages, to extend the maximum duration of quality contracts, to enable schemes to be continued beyond their initial period, and generally to allow greater flexibility. New sections are also inserted into the TA 2000 to provide for certain employment protections to apply to workers whose jobs are affected by the implementation of quality contracts schemes, and to allow the authority who made a quality contracts scheme to operate local bus services within the area of that scheme in certain very limited circumstances.
82.These sections extend to England and Wales, although – as noted below – some provisions apply only in relation to schemes in England.
Section 19: Quality contracts schemes
83.Section 19 amends section 124 of the TA 2000, which has already been amended by section 39 of the Railways Act 2005 (quality contracts schemes in connection with modification of rail services). Those amendments have not been materially affected by the further amendments in this section.
84.The new section 124(1)(a) to (e) (substituted by subsection (2)) set out the revised criteria which the local authority must be satisfied are met before making a quality contracts scheme:
The scheme must increase the use of local bus services, and bring benefits to people using them through the provision of services of a higher quality.
*Increase, in this context, is defined in the new section 124(9B), inserted by subsection (6), to include a reference to reducing, arresting or reversing decline in the use of bus services.
The scheme must contribute to the implementation of the authority’s local transport policies, rather than just those policies set out in their bus strategy (as now). By virtue of section 10, local transport authorities in England and Wales will no longer be required to prepare bus strategies; moreover, not all local transport authorities in England are currently required to prepare local transport plans (or bus strategies), by virtue of the Local Authorities’ Plans and Strategies (Disapplication) (England) Order 2005 (SI 2005/157). However, all local transport authorities (including ITAs) will be required to “develop policies for the promotion and encouragement of safe, integrated, efficient and economic transport to, from and within their area” (section 108(1)(a) of the TA 2000 as amended by section 8). The requirement that a quality contracts scheme must contribute to the implementation of “local transport policies” is therefore applicable in every case. The effect would be to enable a scheme to be made for purposes not limited to matters previously included in the authority’s bus strategy. For example, such purposes might relate to the introduction of a demand management scheme (such as a local charging scheme made under Part 3 of the TA 2000), or to the provision of better integration with rail or light rail services.
*Local transport policies are defined in the new section 108(5) of the TA 2000, inserted by section 7.
The scheme must also (as previously) implement the policies in a way that is economic, efficient and effective.
Any adverse effects of the scheme on operators must be proportionate generally to the well-being of persons living or working in the area.
85.The effect of subsection (3) is to replace the requirement for proposed schemes in England to be approved by the Secretary of State with a new requirement that, before making a scheme, an authority in England must (among other things) publish a response to the report of the relevant “QCS board” (see below). For schemes in Wales, the requirement to obtain the approval of the Welsh Ministers is retained.
Section 20: Notice and consultation requirements
86.This section amends section 125 of the TA 2000 (notice and consultation requirements). Subsection (1) of section 125 is amended so as to require an authority which is proposing to make a quality contracts scheme to issue a consultation document. The document must include a statement by the authority of the reasons why they are satisfied that the criteria set out in the new section 124(1) will be met, and a statement on funding.
Section 21: Approval of proposed schemes: required for areas in Wales only
87.This section amends section 126 of the TA 2000 (approval of proposed scheme) to remove the requirement for a proposed QCS in England to be approved by the Secretary of State. In Wales, such schemes will continue to be approved by the Welsh Ministers. The amendments made by this section have no effect in respect of the procedure in Wales.
Section 22: Boards for proposed schemes for areas in England
88.This section inserts a new section 126A into the TA 2000, which provides for the constitution of “QCS boards”, whose remit will be to consider proposals submitted by English local transport authorities to make quality contracts schemes. Any such board will be chaired by a traffic commissioner (normally designated by the senior traffic commissioner), with two other members drawn from a panel of persons appointed by the Secretary of State. Wherever appropriate, the commissioner designated to chair the board will be the most appropriate one by reason of any particular knowledge or experience that commissioner may have.
*The post of senior traffic commissioner is established by section 3, described above.
Section 23: Advice by boards or their Commissioners
89.This section inserts a new section 126B into the TA 2000, empowering QCS boards to give advice of a procedural nature when requested to do so. If such a request is made before the second and third members of the board have been appointed from the Secretary of State’s panel (see notes on section 22 above), the Commissioner appointed to chair the board is empowered to exercise those powers on behalf of the board. The Secretary of State may also make regulations about the giving of advice under new section 126B, in order to secure propriety in the giving of such advice.
Section 24: Consideration of proposed schemes by boards
90.This section inserts two new sections, 126C and 126D, into the TA 2000.
91.New section 126C sets out the steps to be taken by an English local authority if, having complied with the notice and consultation requirements in section 125, it wishes to proceed with its proposed scheme. The authority is required to send certain information to the QCS board, including a copy of the proposed scheme, and a request for the board to begin its formal consideration of that scheme.
92.New section 126D sets out the functions to be performed by a QCS board, having received a request under section 126C. The board is to form an opinion on certain matters, and may make recommendations, and is to notify the authority or authorities who submitted the proposal of its opinion, any recommendations, and the board’s reasons. The board must also publish a report stating those opinions, recommendations and reasons. The authority may modify its proposals having received the board’s opinion and, having done so, may submit a further request to the board under section 126C.
Section 25: Practice and procedure of boards
93.This section inserts a new section 126E into the TA 2000 empowering the Secretary of State to make regulations with respect to the constitution, powers, duties, practices and procedures of QCS boards. Regulations may also prescribe the period within which the Secretary of State considers that a board should normally have published its report. The board is placed under a duty to take reasonable steps to publish its report within that time and, if it is unable to do so, it must prepare and publish a statement of its reasons.
94.The new section 126E also provides for the Secretary of State to issue guidance to QCS boards on the carrying out of their functions, to which boards must have regard.
Section 26: Making of scheme
95.This section amends section 127 of the TA 2000. Subsection (2) of section 26 retains the effect of the existing section 127(1) in Wales, so that a scheme in Wales may be made at any time within six months of the date when the proposal is approved by the Welsh Ministers. In relation to England, however, section 127(1) is amended so as to enable a local authority to make a scheme at any time within 6 months of the publication of the QCS board’s report, so long as the authority has published its response to that report.
96.The effect of the amendment in subsection (3) is to enable different parts of a quality contracts scheme to come into effect on different dates (see also sections 28 and 29). Under the existing provisions in the TA 2000, all parts of the scheme must come into operation on the same date.
97.The amendment made by subsection (9) reflects the fact that, in an integrated transport area, it is for the Passenger Transport Executive for that area (not the Integrated Transport Authority) to issue invitations to tender for quality contracts. See section 130 of the TA 2000, as read with section 162(4).
Section 27: Appeals against the making of schemes for areas in England
98.Subsection (1) of this section inserts new sections 127A and 127B into the TA 2000. Section 127A provides that certain persons may appeal to the Transport Tribunal against the decision of an English local transport authority to make a quality contracts scheme. Such an appeal may be on a point of law in all cases. In addition, where the opinion of the QCS Board is that either the conditions in section 124(1) (or, where appropriate, (1A)) of the TA 2000 have not been met, or that the authority has not complied with the statutory notice and consultation requirements, an appeal may also be on a question of fact.
99.Section 127B prescribes the powers of the Transport Tribunal to deal with such appeals. These include the power to dismiss the appeal, remit the matter to the authority with directions, direct the authority to vary the scheme or, where the Tribunal is of the opinion that defects in the scheme cannot be remedied in any other way, to quash the decision of the authority to make the scheme.
100.The amendment made by subsection (2) reflects the fact that, in an integrated transport area, it is for the Passenger Transport Executive for that area (not the Integrated Transport Authority) to issue invitations to tender for quality contracts. See section 130 of the TA 2000, as read with section 162(4).
Section 29: Effect of scheme: different operational dates and excepted services
101.This section amends section 129 of the TA 2000 in three respects.
102.First, subsection (2) makes changes consequential on the amendment in subsection (3) of section 26, and on the new sections inserted into the TA 2000 by section 40.
103.Secondly, subsection (3) amends section 129(2) so as to add further cases in which section 129(1) (which disapplies provisions of the TA 1985 on the registration of local services) does not apply. The circumstances in which such a registration may be accepted by the traffic commissioner are set out in new section 6B of the TA 1985 (as inserted by section 49 below).
104.Thirdly, subsection (4) repeals the requirement for tenders to be invited within a particular period after the scheme has been made.
Section 30: Extension of maximum period of quality contracts
105.This section amends section 130 of the TA 2000 so as to extend the maximum duration of a quality contract from five years to ten (which, subject to section 31, is also the maximum duration of the scheme itself). Ten years is also the limit of duration specified for public service contracts for coach and bus services prescribed by article 4.3 of the Regulation of the European Parliament and of the Council on public passenger transport services by rail and by road and repealing Council Regulations (EEC) Nos 1191/69 and 1107/70 (O.J. L315 3.12.2007 p.1).
*A quality contracts scheme may include one or more individual quality contracts.
Section 31: Continuation of schemes for further periods
106.This section inserts a new section 131A into the TA 2000 setting out the procedure that must be followed if an authority wants a quality contracts scheme to continue, with or without modification, beyond the initial period of not more than ten years. Under the existing legislation, it is not possible to continue a scheme, and a new scheme must be made instead.
107.Unless the proposal is an exempt continuation proposal (see section 32), an authority in Wales must secure the approval of the Welsh Ministers before a scheme may continue in operation beyond its initial period, while an authority in England must have published its response to the report issued by the QCS board in relation to the proposed continuation. The notice and continuation requirements of section 125 are to apply to the proposed continuation of a scheme (whether or not it is an exempt continuation proposal), but with the modifications set out in subsections (3), (4) and (5) of section 131A.
Section 32: Exempt continuation proposals
108.Section 32 inserts a new section 131B into the TA 2000, the effect of which is to provide that certain proposals to continue a scheme are to be “exempt continuation proposals”. Such proposals are not subject to the requirement to be approved by the Welsh Ministers (in Wales) or to be considered by a QCS board (in England).
Section 33: Continuation of schemes for areas in England: procedure
109.This section inserts a new section 131C into the TA 2000, setting out the procedures to be followed where an authority wishes for a scheme in England to continue in operation beyond its initial period. Earlier sections of the TA 2000 are applied with modifications, depending on whether or not the proposal to continue the scheme is an exempt continuation proposal.
Section 34: Continuation of schemes for areas in Wales: procedure
110.This section inserts a new section 131D into the TA 2000, setting out the procedure to be followed where an authority in Wales wishes for a scheme to continue in operation beyond its initial period. Earlier sections of the TA 2000 are applied with modifications, depending on whether or not the proposal to continue the scheme is an exempt continuation proposal. The arrangements in Wales (section 131D) differ from those in England (section 131C), in particular as a consequence of the differing functions performed by the Welsh Ministers (in Wales) and by QCS boards (in England).
Section 35: Appeals where proposed continuation considered exempt
111.This section inserts a new section 131E into the TA 2000. It provides a right of appeal to the Transport Tribunal against a decision by a local transport authority that a proposal to continue a scheme in operation was an exempt continuation proposal, or against a decision to proceed with a proposal that it considered (rightly or wrongly) to be exempt. Section 131E provides that such an appeal may be made on a point of law or a question of fact, and sets out the powers of the Tribunal on such an appeal.
Section 36: Appeals where proposed continuation in England considered non-exempt
112.This section inserts a new section 131F into the TA 2000. It provides for appeals against a decision by an English local authority that a scheme is to continue in operation. Whereas section 131E (inserted by section 35) provides a right of appeal in cases where the authority proceeded on the basis that a proposal was an exempt continuation proposal, section 131F deals with other cases in England (i.e. cases where the authority is required to consult a QCS board and publish a response to that board’s report).
Section 37: Variation or revocation of scheme
113.This section amends section 132 of the TA 2000, which sets out a procedure for varying or revoking a quality contracts scheme. The amendments make provision for certain variations (“exempt variations”) to be exempt from the requirement to be approved by the Welsh Ministers (in Wales) or the requirements relating to QCS boards (in England). They provide for an additional situation in which an authority may revoke a scheme. The amended section 132 also sets out revised procedures to be followed where an authority wishes to vary or revoke a quality contracts scheme.
114.The procedures for variation mirror those applying for the making and continuation of a scheme, but with certain modifications.
115.In England, the amendments also provide that an authority may revoke a scheme without the need for approval, or for consultation with a QCS board.
Section 38: Appeals where proposed variation considered exempt
116.This section inserts a new section 132A into the TA 2000 to provide a procedure to appeal to the Transport Tribunal against a scheme variation where the authority has decided to vary a scheme, and has done so on the basis that the variation was an exempt one. That is to say, it has neither sought the approval of the Welsh Ministers (in Wales) nor responded to a report from a QCS board (in England).
117.Such an appeal may be on a point of law or a question of fact, and section 132A sets out the powers of the Tribunal on such an appeal.
Section 39: Exemption from section 132 for specific variations directed by Transport Tribunal
118.This section inserts a new section 132B into the TA 2000. Its effect is that where an appeal is made to the Transport Tribunal under certain preceding sections of Part 2 of the TA 2000, and the Tribunal direct the authority to vary the scheme in a specified manner, the authority is not required to follow the procedures (e.g. as regards notice and consultation, approval or submitting the proposals to a QCS board and responding to its report) that would normally apply to a scheme variation.
Section 40: Power of authorities to provide services in exceptional circumstances
119.This section inserts two new sections, 132C and 132D, into the TA 2000. The effect of those sections is to provide a power for a local transport authority to operate local bus services (“interim services”) where an operator of services under a quality contract has ceased to provide those services before the contract was due to terminate.
120.Subsection (2) of new section 132C provides the power. Subsection (3) provides that this power is available to authorities regardless of contrary provisions contained in other enactments, while subsection (4) provides that an authority providing an interim service must hold a valid public service vehicle operator’s licence.
121.Subsections (5) to (7) of the new section set out some limitations on the new power. Their effect is to require authorities providing an interim service to invite tenders for the provision of those services within a prescribed time limit, except where the authority decides to proceed under section 131 of the TA 2000 (which specifies certain circumstances in which an authority may make a quality contract without having first invited tenders).
122.The new section 132D limits to nine months the period for which an interim service may be provided and, in certain circumstances, empowers the traffic commissioner to grant an extension of up to three months if requested by the local authority.
123.The effect of subsection (2) of the new section is that the power to provide interim services in an integrated transport area is conferred on the Passenger Transport Executive rather than the Integrated Transport Authority. Subsection (3) makes a consequential amendment to the TA 1985.
124.The new sections 132C and 132D to be inserted into the TA 2000 are to extend to England and Wales.
Section 41: Regulations about schemes
125.This section amends section 133 of the TA 2000, a provision which enables regulations to be made on various matters relating to quality contracts schemes. The additional provisions will enable regulations to be made about the continuation of schemes, and matters relating to QCS boards. Subsection (6) provides a power to make regulations modifying or excluding the application of provisions of Part 2 of the TA 2000, so far as relating to quality contracts schemes, in certain circumstances.
126.No regulations have been made to date under section 133 of the TA 2000.
Section 42: Power to make transitional provision about schemes
127.This section amends section 134 of the TA 2000, which enables regulations to be made concerning transitional provision in connection with the coming into operation of quality contracts schemes, or the variation or ending of such schemes. The most significant amendment is that which will enable transitional provisions to modify the effect of sections 89 to 92 of the TA 1985 (obligation to invite tenders for subsidised services other than quality contracts). The amendments also clarify that any transitional provision concerning the coming into effect of a scheme can only have effect from the date on which a scheme has been made, and that transitional provision may be made additionally in connection with the continuation of quality contracts schemes.
Section 43: Guidance about schemes
128.This section inserts a new section 134A into the TA 2000 making provision for the appropriate national authority in England and Wales to issue guidance about the performance by local transport authorities of their functions in respect of quality contracts schemes. Local authorities are required to have regard to any such guidance in the exercise of those functions.
*The appropriate national authority is the Secretary of State (in England) or the Welsh Ministers (in Wales).
Section 44: Quality contracts: application of TUPE
129.This section inserts a new section 134B into the TA 2000. Subsection (3) of section 134B provides that two situations, described in subsections (1) and (2) of that new section, shall be regarded as “relevant transfers” for the purposes of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“the TUPE Regulations”). Subsection (5) of that section provides that sections 257 and 258 of the Pensions Act 2004, and any regulations made under those provisions, apply to a relevant transfer that takes place by virtue of section 134B in the same way as they do to a relevant transfer within the meaning of the TUPE Regulations.
130.Inserted section 134B also provides that the Secretary of State may make provision in regulations about how such transfers are to operate and the procedures to be followed, including provision requiring existing operators who will be affected by the scheme to supply the necessary information about relevant employees. There are provisions for administrative sanctions against operators who fail to supply that information. A new criminal offence of knowingly or recklessly supplying false or misleading information in response to a requirement imposed on an existing operator by virtue of this section is also created.
131.The Secretary of State is also empowered to make regulations to secure “pension protection” for “transferring employees”, as defined in subsection (8) of section 134B. Subsection (9) requires the Secretary of State to exercise that power to make regulations containing specified protection for “transferring original employees”, but this obligation does not preclude the Secretary of State from making regulations to secure additional protections.
Section 45: Power to make traffic regulation orders
132.This section inserts a new subsection (3B) into section 1 of the Road Traffic Regulation Act 1984. Subsection (3A) of that section enables a local traffic authority in England and Wales to make a traffic regulation order (under that section) in respect of a road for which the Secretary of State is, or the Welsh Ministers are, the traffic authority, with their consent, if that order is required to provide facilities under a quality partnership scheme. The effect of the amendment is to extend this power to traffic regulation orders providing facilities pursuant to a quality contracts scheme.
*A traffic regulation order is an order made by a traffic authority to regulate use of a road. It may be made to avoid danger to road users, to prevent damage to the road, to prevent or facilitate the use of the road by certain classes of road user, to preserve amenities, or for environmental reasons.
Section 46: Competition scrutiny of functions and agreements relating to buses
133.This section substitutes a new section for section 153 of the TA 2000. Section 153 introduces Schedule 10 to that Act, which applies a competition test to the exercise of functions by a local transport authority relating to quality partnership schemes, ticketing schemes and subsidised local services. The effect of the amendment is to apply a separate competition test and enforcement regime to voluntary partnership agreements (as defined in the substituted section 153) and certain other bus-related agreements, in place of provisions in Chapter 1 of the Competition Act 1998. Subsection (3) provides for the amendment of Schedule 10 to the TA 2000 by Schedule 2 to the Act.
134.Schedule 2 amends existing provisions in Schedule 10 to the TA 2000, and also inserts additional paragraphs which will form a new Part 2 of that Schedule. The amendments to what is now Part 1 of Schedule 10 include a repeal of the provisions under which an application may be made to the Office of Fair Trading for a decision as to whether the exercise of certain local authority functions meets the competition test.
135.Part 2 applies a modified form of the competition test in the Competition Act 1998 to voluntary partnership agreements, and to certain other agreements, where the object or effect of those agreements is the restriction, prevention or distortion of competition in the market for provision of bus services.
136.The agreements to which the test will apply are:
agreements between the local authority and more than one operator (“voluntary multilateral agreements”);
agreements between the local authority and one operator (“voluntary bilateral agreements”) if, when taken together with one or more other such agreements, they would have an effect on competition; and
agreements between bus undertakings, decisions by associations of bus undertakings or concerted practices by bus undertakings, where the agreement, decision or practice in question has been certified by a local transport authority in accordance with paragraph 18(4) of the amended Schedule 10.
137.Paragraph 19 of the amended Schedule 10 provides that price-fixing agreements cannot be subject to the provisions in Part 2 of Schedule 10; such agreements would instead continue to fall to be considered within the provisions of the Competition Act 1998.
138.The Schedule provides that where an agreement is subject to this competition test, the prohibition in Chapter 1 of the Competition Act 1998 on agreements, decisions or concerted practices that would prevent, restrict or distort competition does not apply. The modified competition test applies in place of the provisions of the 1998 Act. The Schedule also applies investigation and enforcement powers of the OFT as set out in the Competition Act 1998, with the exception of the power to impose financial penalties, to relevant agreements which do not meet the competition test in Part 2 of this Schedule. The provision includes power for the Secretary of State to modify the application of relevant investigation and enforcement powers in the Competition Act 1998 in respect of agreements subject to this revised competition test. That power could not, however, be used to empower the OFT to impose financial penalties.
139.This section extends to England and Wales.