Part 2

Bus services

Financial and competition provisions

Competition test for exercise of bus functions
37
1
The functions to which this section applies are those of—
a
making and varying quality partnership schemes;
b
making and varying ticketing schemes; and
c
inviting and accepting tenders under section 89 or 91 of the 1985 Act (subsidised services).
2
For the purposes of this section an authority or authorities propose to exercise a function to which this section applies—
a
in the case of the function of making or varying a quality partnership scheme, once notice of a proposal to make or vary it has been given under section 5(1) of this Act;
b
in the case of the function of making or varying a ticketing scheme, once notice of a proposal to make or vary it has been given under section 30(1) of this Act; and
c
in the case of the function of inviting or accepting tenders under section 89 or 91 of the 1985 Act, once it is proposed to invite tenders under section 89(2) or 91(3) of that Act or to accept or not to accept a tender under section 89 of that Act.
3
For the purposes of this section the exercise or proposed exercise of a function to which this section applies meets the competition test unless it—
a
has or is likely to have a significantly adverse effect on competition; and
b
is not justified by subsection (4) below.
4
The exercise or proposed exercise of a function is justified if—
a
it is with a view to achieving one or more of the purposes specified in subsection (5) below; and
b
its effect on competition is or is likely to be proportionate to the achievement of that purpose or any of those purposes.
5
The purposes referred to in subsection (4) above are—
a
securing improvements in the quality of vehicles or facilities used for or in connection with the provision of local services;
b
securing other improvements in local services of substantial benefit to users of local services; and
c
reducing or limiting traffic congestion, noise or air pollution.