Introduction
104.The 1985 Act deregulated bus services in the UK, moving from council-run buses to an open commercial market via a transitional period. In that transitional period, the bus services that councils provided were moved over to companies owned by them, which were then largely sold off. In Scotland, only one of those companies remains in existence today: Lothian Buses Limited. Otherwise, section 66 of the 1985 Act prevents a council from providing local services themselves(3).
105.As noted in the general background section, however, under section 63 of the 1985 Act councils(4) are under a duty to secure the provision of such public transport services as they consider appropriate in order to meet any public transport requirements which they don’t think would otherwise be met by the open commercial market. Councils have a variety of tools to try to achieve this, but subsection (5) of section 63 is significant in that it enables councils to enter into agreements to provide subsidies to operators in order to secure a service.
There is an existing exemption to this prohibition under section 71 of the 1985 Act for small undertakings and there are a number of other provisions, such as community bus permits, under which a council can provide bus services in certain circumstances. In addition, the councils for the Orkney Islands, Shetland Islands and Western Isles are specifically exempted from the restriction in section 66 of the 1985 Act.
In addition, this could apply to a regional Transport Partnership which has had the functions of a council under this section conferred upon it by an order made under section 10 of the 2005 Act.
