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).
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.
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