Information relating to services
Provision of service information when varying or cancelling registration – section 39Overview
237.Section 6 of the 1985 Act and supporting regulations(14) deal with the registration of local services. The section and regulations also deal with the circumstances in which such a registration can be varied or cancelled. Without this registration, a local service cannot be provided by an operator.
238.Section 39 of the Act inserts a series of three new sections into the 1985 Act. These provisions enable any affected authority (see paragraphs 254 to 256 below) to obtain specific service information from an operator who proposes to vary or cancel the registration of a local service and, in limited circumstances, share it with other people who may wish to bid to provide a similar service to the one being withdrawn or varied. Where an operator does not provide the information (or does not provide it timeously) the Scottish Traffic Commissioner will be able to impose a financial penalty on the operator (see section 39(2) of the Act).
239.These new powers to obtain and share information are designed to facilitate more effective competition in the bus market and follows recommendations made by the Competition Commission. The Policy Memorandum which accompanied the Bill for this Act provides full details about this aspect.
240.The new powers should be contrasted with a similar power to obtain information in section 43 of the 2001 Act, which enables a local transport authority to request information at any time in connection with the formulation of their relevant general policies. Though the section 43 power enables a local transport authority to request similar information about passengers, journeys and fares as that under the new provision, it does not allow for requesting revenue information (see paragraph 244 below), nor does it have any particular sanction attached to it for failure to comply. Further, it only requires operators to provide information that they currently have. The new power, however, backed by the ability to make regulations under section 6ZC, requires operators to ensure that they have appropriate records and that they are in a position to share them prior to deciding to change or discontinue a service. If they fail to do so, they may find themselves subject to a variety of sanctions.
241.Further, the material obtained under the section 43 power may not be disclosed where it relates to the affairs of an individual or business during the lifetime of the individual or the existence of the business. Although there are some exceptions (set out in section 43(5)), this is a significant limitation.
242.An additional constraint is that the section 43 power can only be used in relation to the formulation of general policies: it does not assist local transport authorities (and others with similar duties) where they are dealing with a specific service withdrawal and they need to secure an alternative.
Provision of service information when varying or cancelling registration: inserted section 6ZA
243.Inserted section 6ZA(1) sets out that the remainder of that section applies where the operator notifies an affected authority of its intention to cancel or vary a registered local service.(15) The affected authority (or authorities) then may require the operator to provide them with information about the service (subsection (2)). Regulations made under section 6ZC may, however, provide for exceptions to this rule; for example, if the variation is to add stops or increase the frequency of service it would be inappropriate (and unnecessary) for the authority to look at the specific service information. The regulations may also prescribe the time period which the authority has to make the requirement.
244.The information that the affected authority can request will be fully set out in regulations, but it will be limited (by virtue of section 6ZA(3)) to two types of information, namely:
information about passenger numbers, journeys and fares (which is sometimes referred to in the industry as “patronage information”); and
information about the revenue obtained by the service (the “revenue information”).
245.Further restrictions on the information that an authority may seek are set out in subsection (4).
246.The first restriction (subsection (4)(a)) is that they may only request the information in connection with their functions under section 9A of the Transport Act 1968 (where the affected authority is SPT) or under section 63 of the 1985 Act (where the affected authority is a local transport authority or a Transport Partnership other than SPT).
247.Under section 9A of the 1968 Act, a Passenger Transport Authority must formulate general policies with respect to the descriptions of public passenger transport services the Authority considers is appropriate for the Passenger Transport Executive to secure for their area for the purpose of meeting any public transport requirements within their area which in the view of the Authority would not be met apart from any action taken by the Executive for that purpose. This is supplemented by a duty on the part of the Executive to secure the provision of such services as they consider it appropriate to secure for meeting any public transport requirements within their area in accordance with those policies. The functions of the Strathclyde Passenger Transport Authority and the Strathclyde Passenger Transport Executive under section 9A were transferred to SPT by order made under section 10 of the Transport (Scotland) Act 2005.
248.Under section 63 of the 1985 Act, the functions relate to the authority’s duties to (i) secure that there are sufficient services to meet the public transport requirements in their area which would not be met without action being taken by the authority and (ii) formulate from time to time general policies as to the descriptions of services that the authority proposes to secure in terms of that duty.
249.The information sought must therefore relate to the authority’s obligation to ensure that there is a sufficient service provision and the formulation of general policies in connection with that. This may manifest itself in different ways. For example, it makes it clear that an authority cannot request information in relation to their wider transport planning duties or for the purposes of informing a proposal to make a franchising framework under section 13A of the 2001 Act. However, it will inform decisions about how they comply with their duty to provide services to meet public transport needs in their area, which might include providing subsidies for particular services.
250.The second restriction (subsection (4)(b)) is that the authority can require information in respect of the preceding 12 months only (or a shorter period if the service has not been operating that long). Section 6ZC provides that the Scottish Ministers may, however, adjust the length of that period by regulations.
251.Subsection (5) deals with operators’ responses to requirements for information and has two elements.
252.The first element is that an operator must respond with the required information within a period to be set by regulations. That period is expected to start with the day that the operator receives the requirement from the authority.
253.The second element is that an operator can, at the same time as sending the required information, also request that the authority do not disclose it on the basis that disclosure of the information is likely to harm the operator’s business. In making such a request they are required to provide evidence of their assertion. This evidence will be assessed by the authority under inserted section 6ZB(6). If they decide that disclosure of the information is likely to harm the operator’s business they cannot disclose it.
Subsection (6) of section 6ZA defines an affected authority.
254.The authorities that can be affected are local authorities and regional Transport Partnerships which have functions under section 9A of the 1968 Act or section 63 of the 1985 Act(16) (see paragraphs 247 and 248 above). For these purposes, it is worth noting that section 63 is not available to a local authority whose area forms part of the Strathclyde Passenger Transport area (the area served by SPT).
255.For these authorities to be affected, they must have a bus stop in their area (or region) somewhere on the route of the service which the operator is proposing to vary or cancel.
256.It is therefore possible for more than one authority to be an affected authority and the disclosure requirements in section 6ZB reflect that by allowing for sharing of information between such authorities. It is expected that in such cases the authority which is most affected by the proposal will take the lead in requesting the information, but there is no bar on all affected authorities from doing so.
Sanctions
257.Where an operator fails to comply with the duties in section 6ZA, the Scottish Traffic Commissioner will be able to take enforcement action against them.
Provision of service information: extent of permissible disclosure: inserted section 6ZB
258.This section sets out the limited circumstances in which information obtained by an affected authority may be disclosed. In doing so, it draws a distinction between the two different types of information, patronage and revenue, with the latter having a narrower group of potential recipients and additional controls placed on what may be disclosed. In both cases, however, the information may be shared with other affected authorities (who may not then disclose the information to anyone else).
259.Subsection (2) deals with the disclosure of patronage information. This may be shared with an economic operator (see paragraph 265 below) in connection with an invitation to submit a tender to provide a supported service to replace or supplement the service being varied or cancelled by the operator. This then will allow the authority to share the information with other operators who may wish to make a bid.
260.The section also provides the Scottish Ministers with a basis for making regulations to extend the people to whom patronage information may be disclosed. Any extension would be subject to the consultation requirements set out in that section and described below.
261.Subsections (3) and (4) deal with the disclosure of revenue information. Like patronage information, the affected authority are able to share information with an economic operator in connection with an invitation to submit a tender to provide a supported service to supplement or replace the service being varied or cancelled. However, the information has to be aggregated into an annual figure to preserve commercial confidentiality. The authority are also prevented from disclosing it where they have decided to take on the revenue risk for the service as there would be no practical benefit in its disclosure.
262.There are essentially two approaches to revenue risk in contracts for supported services. In the first, known as the “minimum cost approach”, the operator tenders for the whole cost of running the service and the authority keeps any revenue generated by passengers – so assuming the risk. In this way, the operator’s costs are completely covered by the authority regardless of how much revenue is actually generated by passengers. Any difference between estimated and actual passenger revenue will require to be absorbed by the authority. In the second approach, known as the “minimum subsidy approach”, the operator retains the revenue from passengers and tenders for the whole costs of operating the service less the estimated passenger revenue. As such, the local transport authority pays a fixed sum by way of subsidy and if actual passenger revenue falls short of estimates, that shortfall will be absorbed by the operator.
263.Subsections (6) and (7) deal with where an operator requests (under section 6ZA(5)(b)) for the information provided not to be disclosed if it considers that disclosure is likely to cause damage to its commercial interests. Where the affected authority decide that they agree with that assessment, subsection (7) confirms that they may not disclose the information. It also makes clear that the authority cannot disclose any information which the operator has asked not to be disclosed until they have considered the evidence, made their decision and notified the operator accordingly.
264.Subsection (8) makes it an offence for an affected authority to disclose information which they are not permitted to disclose. Subsection (9) provides that the penalty for such a disclosure is a fine of up to level 5 on the maximum scale (currently £5,000). Further, subsection (10) sets out circumstances where, if the disclosure is attributable to an individual employed by the authority, that individual may also be prosecuted for the offence.
265.Subsection (11) contains the definitions of an economic operator and what is a supported service. It defines an economic operator as any person, public entity or group of persons or entities including any temporary association of undertakings that offers to provide local services on the market. Typically, this will be other bus companies.
266.A supported service is defined as being as one which is subsidised under section 9A(4) of the 1968 Act or section 63(5) of the 1985 Act.
Provision of service information: further provision - inserted section 6ZC
267.This section enables the Scottish Ministers to make regulations to provide further detail about the duties and processes in inserted sections 6ZA and 6ZB and also to provide for exceptions where the core duty to provide information will not apply.
268.Before making regulations under this section, the Scottish Ministers must carry out a consultation with the various groups who are most likely to be affected by changes to the system, including those who are representative of operators, passenger groups and affected authorities.
269.Subsection (3) amends section 43 of the 2001 Act (power to obtain information about local services). This amendment makes clear that if information requested under section 43 is provided with information requested under section 6ZA(2) of the 1985 Act, the exemption from the prohibition on disclosure of information in section 43(5)(f) does not apply and the information provided cannot be disclosed by virtue of that provision.
Public Service Vehicles (Registration of Local Services) (Scotland) Regulations 2001 (SSI 2001/219).
Notification is a requirement under the regulations governing the registration of local services (currently the Public Service Vehicles (Registration of Local Services) (Scotland) Regulations 2001.
While not obvious on the face of the 1985 Act, section 10 of the Transport (Scotland) Act 2005 allowed for the transfer (by order) of certain transport functions to regional Transport Partnerships. Three such orders have been made to date. The first of these orders transferred a number of functions (including the function in section 9A of the 1968 Act) to SPT. The remaining two orders transferred a number of functions (including the function in section 63 of the 1985 Act) to SWestrans and to ZEtrans respectively.
