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Transport (Scotland) Act 2001

Financial and competition provisions

Section 36 Agreements providing for service subsidies

60.This section amends the criteria by reference to which authorities must decide which tender to accept in the case of tenders for additional subsidised public transport services under section 9A of the Transport Act 1968 and section 63 of the Transport Act 1985. It introduces a new “best value” test by requiring authorities to have regard to economy, efficiency and effectiveness and also to have regard to their relevant general policies, and environmental issues, namely the reduction or limitation of traffic congestion, noise or air pollution.

61.This section also removes the present constraint (imposed by section 92(1) of the 1985 Act) that in exercising powers to subsidise those services authorities must not act so as "to inhibit competition". It is replaced with a new duty to have regard to the interests of the public and of operators. This is intended to make it easier for authorities to subsidise additional service frequency in appropriate circumstances by removing them from the requirement to consider whether competition might be inhibited.

Section 37 Competition test for exercise of bus functions

62.This section introduces a new competition test that will apply to the functions of making and varying of QP and ticketing schemes, and inviting and accepting tenders under section 89 or 91 of the Transport Act 1985. The competition test is met unless the measure has or is likely to have a significantly adverse effect on competition and is not justified by reference to the following criteria: that its effect on competition is proportionate and that it either secures improvements in the quality of vehicles or facilities used, secures other improvements in local services or reduces or limits traffic congestion, noise or air pollution.

Section 38 Grants to bus service operators

63.The grant making power contained in this section will replace the current Fuel Duty Rebate scheme operated under section 92 of the Finance Act 1965, which is repealed by subsection (6). This section 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.

Section 39 Penalties

64.This section makes alternative provision to the penalties that are currently available to the traffic commissioner under section 111 of the Transport Act 1985 (as amended by section 40 of the Act). The section provides that the traffic commissioner may impose a penalty on an operator who has failed to operate a registered local service, or has failed to operate a local service in accordance with a QP or QC scheme, have failed to comply with a ticketing scheme or who has failed to provide information required by an authority under section 34(3). The maximum penalty under this section is £550 or such other sum as the Scottish Ministers may by order specify multiplied by the number of vehicles the operator is licensed to use under his public service vehicle licence. There is a right of appeal for operators to the Transport Tribunal.

Section 40 Repayment of grants towards bus fuel duty

65.This section amends section 111 of the Transport Act 1985 to enable the traffic commissioner to impose a penalty on a bus operator, if that operator fails "to a significant extent" to operate services as registered under section 6 of the 1985 Act. The amended provision enables the traffic commissioner to impose additional penalties in relation to:

  • Operators using QP facilities when not entitled to do so (section 8(4));

  • Operators providing a service within a QC area without entering into a QC with the local transport authority (section 22(1)(b) or (2));

  • Operators failing to implement a ticketing scheme when required to do so (section 32(1)); and

  • Operators failing to provide information to a local transport authority (section 34(3)).

66.The section also amends the current level of penalty, which the traffic commissioner must impose - a penalty of 20% of the fuel duty rebate paid in the previous three months. The amendment will enable the traffic commissioner to impose a penalty between 1% and 20% and there will no longer be a requirement to be satisfied that the operator has failed "to a significant extent", thus allowing a more flexible use of the power. This amendment only has effect, however, only until such time as section 111 of the 1985 Act is replaced by the provisions of section 38 of the Act.

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Text created by the Scottish Government to explain what the Act sets out to achieve and to make the Act accessible to readers who are not legally qualified. Explanatory Notes were introduced in 1999 and accompany all Acts of the Scottish Parliament except those which result from Budget Bills.


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