Part V

Financial Provisions

Expenditure on public passenger transport services

Expenditure on public passenger transport services.
88
1
Any power conferred on any authority responsible for expenditure on public passenger transport services to enter into agreements providing for service subsidies (however framed, and whether arising under this Act or under any other enactment) shall be subject to sections 89 to 92 of this Act.
2
It shall be the duty—
a
of all such authorities, in exercising and performing their functions with respect to securing the provision of public passenger transport services; and
b
of all—
i
local authorities in England and Wales, or,
ii
education authorities in Scotland or local authorities exercising social work functions in Scotland,
in relation to any expenditure on transport for the purposes of or in connection with the exercise and performance of any of the functions set out in subsection (2A);
to co-operate with one another so as to secure, in the interests of the ratepayers of their areas, the best value for money from their expenditure on public passenger transport, taken as a whole.
2A
The functions referred to in subsection (2)(b) are—
a
in relation to local authorities in England and Wales, their education functions (as defined in section 579(1) of the Education Act 1996) and their social services functions;
b
in relation to Scotland, their functions as education authorities and their social work functions.
3
In subsection (2)(b) “local authority” means—
a
in relation to England and Wales, a county council, a metropolitan district council, a non-metropolitan district council for an area for which there is no county council, a county borough council, a London borough council, and the Common Council of the City of London (in their capacity as a local authority); and
b
in relation to Scotland, an authority who are a local authority for the purposes of the Social Work (Scotland) Act 1968.
4
It shall be the duty of all authorities mentioned in subsection (2) above to afford to one another such information as may be reasonably required for the purpose of the co-operation required of them under that subsection.
5
Where, as a result of any such co-operation, any such authority—
a
incur expenditure which they would not otherwise have incurred; or
b
receive less revenue than they would otherwise have done;
that authority may, by notice to the other authority or authorities concerned, require that other authority or (as the case may be) those other authorities to reimburse the amount of that expenditure or of that reduction in revenue.
6
If—
a
any amount in respect of which, in accordance with a notice under subsection (5) above, any such authority or authorities are required to reimburse another such authority; or
b
where two or more such authorities are required by any such notice to reimburse another such authority, the share of that amount payable by each authority concerned;
is not determined by agreement between both or all the authorities concerned within six months of the receipt of the notice or such longer period as may be agreed between them, that amount and (where paragraph (b) above applies) the share payable by each authority concerned shall be determined by an arbitrator or, in Scotland, by an arbiter.
7
Any such arbitrator or (as the case may be) arbiter shall be appointed either by agreement between the authorities concerned or, in default of such agreement, by the President of the Chartered Institute of Public Finance and Accountancy.
8
References in this Part of this Act to authorities responsible for expenditure on public passenger transport services are references to—
a
Passenger Transport Executives;
b
non-metropolitan county and district councils in England and Wales; and
c
. . . councils in Scotland;
and in sections 89 to 92 of this Act include references to Transport for London in relation to any exercise of its power under section 156(2) or (3) (general powers) of the Greater London Authority Act 1999 which by virtue of section 65(3) of this Act is subject to those sections.

Expenditure on public passenger transport services.
88
1
Any power conferred on any authority responsible for expenditure on public passenger transport services to enter into agreements providing for service subsidies (however framed, and whether arising under this Act or under any other enactment) shall be subject to section 92 of this Act.
2
It shall be the duty—
a
of all such authorities, in exercising and performing their functions with respect to securing the provision of public passenger transport services; and
b
of all—
i
local authorities in England and Wales, or,
ii
education authorities in Scotland or local authorities exercising social work functions in Scotland,
in relation to any expenditure on transport for the purposes of or in connection with the exercise and performance of any of the functions set out in subsection (2A);
to co-operate with one another so as to secure, in the interests of the ratepayers of their areas, the best value for money from their expenditure on public passenger transport, taken as a whole.
2A
The functions referred to in subsection (2)(b) are—
a
in relation to local authorities in England and Wales, their education functions (as defined in section 579(1) of the Education Act 1996) and their social services functions;
b
in relation to Scotland, their functions as education authorities and their social work functions.
3
In subsection (2)(b) “local authority” means—
a
in relation to England and Wales, a county council, a metropolitan district council, a non-metropolitan district council for an area for which there is no county council, a county borough council, a London borough council, and the Common Council of the City of London (in their capacity as a local authority); and
b
in relation to Scotland, an authority who are a local authority for the purposes of the Social Work (Scotland) Act 1968.
4
It shall be the duty of all authorities mentioned in subsection (2) above to afford to one another such information as may be reasonably required for the purpose of the co-operation required of them under that subsection.
5
Where, as a result of any such co-operation, any such authority—
a
incur expenditure which they would not otherwise have incurred; or
b
receive less revenue than they would otherwise have done;
that authority may, by notice to the other authority or authorities concerned, require that other authority or (as the case may be) those other authorities to reimburse the amount of that expenditure or of that reduction in revenue.
6
If—
a
any amount in respect of which, in accordance with a notice under subsection (5) above, any such authority or authorities are required to reimburse another such authority; or
b
where two or more such authorities are required by any such notice to reimburse another such authority, the share of that amount payable by each authority concerned;
is not determined by agreement between both or all the authorities concerned within six months of the receipt of the notice or such longer period as may be agreed between them, that amount and (where paragraph (b) above applies) the share payable by each authority concerned shall be determined by an arbitrator or, in Scotland, by an arbiter.
7
Any such arbitrator or (as the case may be) arbiter shall be appointed either by agreement between the authorities concerned or, in default of such agreement, by the President of the Chartered Institute of Public Finance and Accountancy.
8
References in this Part of this Act to authorities responsible for expenditure on public passenger transport services are references to—
a
Passenger Transport Executives;
b
non-metropolitan county and district councils in England and Wales; and
c
. . . councils in Scotland;
and in sections 89 to 92 of this Act include references to Transport for London in relation to any exercise of its power under section 156(2) or (3) (general powers) of the Greater London Authority Act 1999 which by virtue of section 65(3) of this Act is subject to those sections.
This version of this provision extends to England and Wales only. A separate version has been created for Scotland only.
S. 88(1) excluded (E.W.) (26.10.2001 for E. and otherwise prosp.) by 2000 c. 38, ss. 124(6), 275; S.I. 2001/3342, art. 2, Sch.
S. 88(1) excluded (S.) (1.7.2001) by 2001 asp 2, s. 13(9) (with s. 66); S.S.I. 2001/132, art. 2(3), Sch. Pt. I
1968 c. 49.
Words in s. 88(8)(c) repealed (S.) (1.4.1996) by S.I. 1996/974, art. 2(2), Sch. 2
Words in s. 88 substituted (15.7.2003) by The Transport for London (Consequential Provisions) Order 2003 (S.I. 2003/1615), art. 2, Sch. 1 para. 12(3)
This version of this provision extends to Scotland only. A separate version has been created for England and Wales only
Words in s. 88(1) substituted (S.) (1.4.2003) by Local Government in Scotland Act 2003 (asp 1), ss. 60(3)(b), 62(2); S.S.I. 2003/134, art. 2(1), Sch.
Pt. 5 (except ss. 110, 111): transfer of functions (1.7.1999) by S.I. 1999/672, art. 2, Sch. 1
S. 88(2)(b) substituted (5.5.2010) by The Local Education Authorities and Children's Services Authorities (Integration of Functions) Order 2010 (S.I. 2010/1158), art. 1, Sch. 2 para. 34(3)(a)
S. 88(2A) inserted (5.5.2010) by The Local Education Authorities and Children's Services Authorities (Integration of Functions) Order 2010 (S.I. 2010/1158), art. 1, Sch. 2 para. 34(3)(b)
Words in s. 88(3) substituted (5.5.2010) by The Local Education Authorities and Children's Services Authorities (Integration of Functions) Order 2010 (S.I. 2010/1158), art. 1, Sch. 2 para. 34(3)(c)
Pt. 5 modified (E.W.) (1.4.2011) by The Concessionary Bus Travel Act 2007 (Variation of Reimbursement and Other Administrative Arrangements) Order 2010 (S.I. 2010/1179), arts. 1(3)(b), 5(1)(a)
Pt. 5: transfer of functions (E.W.) (1.4.2014) by The Halton, Knowsley, Liverpool, St Helens, Sefton and Wirral Combined Authority Order 2014 (S.I. 2014/865), arts. 1, 8(1)(a) (with arts. 8(4), 12)
Pt. 5: transfer of functions (E.W.) (15.4.2014) by The Durham, Gateshead, Newcastle Upon Tyne, North Tyneside, Northumberland, South Tyneside and Sunderland Combined Authority Order 2014 (S.I. 2014/1012), arts. 1, 8, 9 (with art. 11)
Pt. 5: delegation of functions (E.W.) (1.4.2016) by The Tees Valley Combined Authority Order 2016 (S.I. 2016/449), arts. 1(a), 6(a)
Pt. 5: functions made exercisable (E.W.) (9.2.2017) by The West of England Combined Authority Order 2017 (S.I. 2017/126), arts. 1(3), 8
Pt. 5: functions made exercisable (E.W.) (3.3.2017) by The Cambridgeshire and Peterborough Combined Authority Order 2017 (S.I. 2017/251), arts. 1(2)(b), 8(a)
Pt. 5 functions made exercisable (E.W.) (8.5.2017) by The Tees Valley Combined Authority (Functions and Amendment) Order 2017 (S.I. 2017/431), arts. 1(2), 4(1)(a)
S. 88(1) excluded by 2000 c. 38, s. 123A(8) (as inserted (E.W.) (27.4.2017 for specified purposes, 27.6.2017 in so far as not already in force) by Bus Services Act 2017 (c. 21), ss. 4, 26(3))
Pt. 5: transfer of functions (E.W.) (2.11.2018) by The Newcastle Upon Tyne, North Tyneside and Northumberland Combined Authority (Establishment and Functions) Order 2018 (S.I. 2018/1133), arts. 1, 7 (with art. 28)
Pt. 5 functions made exercisable (E.W.) (2.11.2018) by The Newcastle Upon Tyne, North Tyneside and Northumberland Combined Authority (Establishment and Functions) Order 2018 (S.I. 2018/1133), arts. 1, 9 (with art. 28)
S. 88(1) excluded (S.) (4.12.2023) by 2001 asp 2, s. 13A(7) (as inserted by Transport (Scotland) Act 2019 (asp 17), ss. 38(2), 130(2) (with s. 126); S.S.I. 2023/250, sch.)
Pt. 5: functions made exercisable (E.W.) (20.12.2023) by The York and North Yorkshire Combined Authority Order 2023 (S.I. 2023/1432), arts. 1(2), 13(1)(2)
Ss. 88-92: functions made exercisable concurrently (E.) (28.2.2024) by The East Midlands Combined County Authority Regulations 2024 (S.I. 2024/232), regs. 1(2), 14(4)
Pt. 5: functions made exercisable (E.) (28.2.2024) by The East Midlands Combined County Authority Regulations 2024 (S.I. 2024/232), regs. 1(2), 14(1)
Pt. 5: functions made exercisable concurrently (E.W.) (7.5.2024) by The North East Mayoral Combined Authority (Establishment and Functions) Order 2024 (S.I. 2024/402), arts. 1(3), 19(b) (with art. 9)
Pts. 4, 5: transfer of functions (E.) (5.2.2025) by The Hull and East Yorkshire Combined Authority Order 2025 (S.I. 2025/113), arts. 1(2), 7
Pts. 4, 5: transfer of functions (E.) (5.2.2025) by The Devon and Torbay Combined County Authority Regulations 2025 (S.I. 2025/115), regs. 1(2), 9
Pts. 4, 5: functions made exercisable (E.) (5.2.2025) by The Greater Lincolnshire Combined County Authority Regulations 2025 (S.I. 2025/117), regs. 1(2), 13
Pts. 4, 5: functions made exercisable (E.) (5.2.2025) by The Lancashire Combined County Authority Regulations 2025 (S.I. 2025/118), regs. 1(2), 9