Transport Act 2000 commencement of remaining local authority powers in Part II

I am writing to let you know of the arrangements for commencing the outstanding local authority enabling powers in Part II, namely for Quality Partnership Schemes and Quality Contract schemes.

2. Regulations under section 119 (existing QP facilities) have been laid today and will come into force on 26 October, simultaneously with the coming onto force of the relevant sections (114 to 118 and 120 to 134). The relevant instruments are the Quality Partnership Schemes (Existing Facilities) Regulations 2001 S.I. No. 3317 and the Transport Act 2000 (Commencement No. 7) Order 2001.

3. I attach a copy of the Press Release dated today, incorporating remarks by the Minister, Sally Keeble.

Quality Partnership Schemes (sections 114 to 123)

4. Under a statutory QP, the local authority - for these purposes, county councils, unitary authorities and Passenger Transport Authorities - draws up a scheme, aimed at implementing the policies in its local bus strategy. As you know, the bus strategy forms part of the local transport plan required under section 108 of the Act. The scheme in effect represents a commitment on the part of the authority to provide certain facilities to improve local bus services, and to maintain them throughout the life of the scheme; and an obligation on the part of participating bus operators to meet the quality standards prescribed in the scheme when using the facilities in question.

5. Once a scheme is made, the authority (or authorities) must provide the specified facilities by the operative date (including any facilities relying on traffic regulation orders), and a bus operator wishing to use the facilities must:

- have given a written undertaking to the traffic commissioners that he will provide the service to the specified standard; and
- provide the service to that standard (other than in exceptional circumstances).

6. Failure on the part of the bus operator to comply with these requirements will be treated as a breach of his bus registration and open to action by the traffic commissioners, including financial penalties and conditions attached to his 'O' licence (by virtue of the provisions in Schedule paragraphs 10 and 22). A more detailed commentary on the provisions is attached.

7. As you know, commencement of these powers (except for section 119) was deferred while regulations were prepared under section 119 to provide the basis on which certain existing facilities (for example, bus lanes) could be incorporated into a statutory QP scheme.

Quality Partnership Scheme Regulations

8. The powers in section 119 respond to representations from local authority interests that it should be possible to 'convert' existing voluntary QPs into statutory ones. Following a consultation exercise in April, there was broad support for limiting this to facilities provided no more than 10 years previously, and requiring the consent of bus operators relying on the facilities where they were provided between 5 and 10 years previously. The regulations have been framed accordingly, except that the operative date is the date of the scheme proposal (notice under section 115(1)) and not the date of Royal Assent, as originally proposed. The effect is to roll forward the time periods, and allow facilities provided since Royal Assent to be incorporated in a scheme.

9. Various alternative suggestions were made in consultation responses as to the consent requirements, including possible de minimis provisions, or some form of majority voting among operators. It was concluded that this would introduce unnecessary complexities and be likely to increase the administrative burden and scope for disputes. It is considered that the regulations strike an appropriate balance between the interests of bus operators and local authorities.

10. Note that, under section 114(3), the provision of facilities under a QP scheme must, of itself, improve the quality of local bus services, or reduce or limit traffic congestion, noise or air pollution. It is therefore not acceptable for a scheme to be introduced entirely on the basis of facilities already in existence at the time the scheme is proposed. There must be an element of added value, i.e. new or enhanced facilities by the local authority, and new or enhanced services by the bus operator, in every scheme.

11. The effect of the Regulations is that:

• facilities may not be incorporated in a QP scheme if they were provided more than 10 years prior to the date the scheme is notified under section 115; and
• if the facilities were provided more than 5 years but less than 10 years prior to the date the scheme is notified under section 115, they may only be incorporated if :

- the scheme proposal states when the existing facilities were provided
- bus operators relying on the facilities are given at least 42 days notice to register any objection
- no such objections have been made and not withdrawn
- the scheme, as made, confirms this to be the case.

12. Section 123 of the Act allows the Secretary of State to issue guidance in connection with QP schemes. Guidance was issued in May this year on non-statutory partnerships ('Quality Bus Partnerships - A Good Practice Guide', by the TAS Partnership, available at: www.local-transport.dft.gov.uk/qbus/index.htm). Much of this advice will also be relevant background to an authority wishing to pursue a statutory QP scheme. We are asking to be made aware of early candidates for statutory QPs, so we can consider the scope for research on the impacts, both to inform future developments and further guidance to authorities.

Sections 124 to 134 - Quality Contract Schemes

13. These are enabling powers for local authorities to bring forward schemes in which they can determine what local bus services should be provided in their area, and to what standards, and can let contracts with bus operators giving them exclusive rights to provide services to the authority's specification. Schemes require Ministerial approval and, if given, tenders must be invited within 3 months of making the scheme. The scheme cannot be brought into force less than 21 months after the date of making. (A summary note on the QP and QC processes and timescales is attached.)

14. A key feature of a QC scheme is that the traffic commissioners cease to be responsible for overseeing bus performance. Compliance with QC contracts will rest entirely with the local authority. A scheme can last for up to 10 years, but contracts must be renewed at least every 5 years. Again, there is a more detailed commentary below.

15. You will wish to note the Minister's remarks in the Press Notice, which repeat previous Ministers' statements when the Transport Bill was in Parliament. Ministers wish to see the partnership route - formal or informal - used to maximum effect; QCs are considered an option of last resort. But they remain a practical option, if policies cannot be delivered by other means. And they do not have to be preceded by, for example , a statutory QP that has been tried and failed. Ministers will look at individual cases on their merits. But they will expect to see clear evidence to support the tests set out in the Act - that a QC scheme is the only practicable way of implementing the authority's policies, and that any proposed scheme will do so economically, efficiently and effectively. In addition, Ministers must consider that it is in the public interest to approve a scheme.

16. Again, we are asking authorities to keep us in close touch with their thinking if there is any indication of early bids for QC schemes.

17. I am writing similarly to the Local Government Association and Passenger Transport Group.

Yours sincerely,

Alison Rutherford
Buses and Taxis Division

 

Transport Act 2000 - Commentary on QP and QC scheme powers

This note is intended to highlight the main provisions; it does not purport to be a definitive statement of the law.

Quality Partnership Schemes

1. Section 114 provides the conditions for making a QP scheme. A local transport authority, or two or more authorities acting jointly, may make a scheme if they are satisfied that it will help to implement their bus strategy or strategies, and improve the quality of local bus services to benefit bus users, or have environmental benefits in reducing or limiting noise or air pollution. The facilities must be specific to bus routes (or facilities ancillary to the provision of the main facilities). They cannot include information facilities if the authority has already required that these must be provided under the separate provisions in section 139.

2. The standards that may be imposed may relate to the vehicles to be used on the route. But they do not extend to service frequency or timing.

3. There is provision for joint making of a scheme where it involves a traffic regulation order - for example, for a bus lane - for which a metropolitan district is responsible, as the traffic authority. Local transport authorities are to co-operate together in the exercise of any of their functions under Part II of the Bill as to QP schemes; and to consider the desirability of acting jointly with another such authority, for example, to overcome possible boundary problems.

4. Section 115 specifies the local publicity and consultation requirements to be met before a scheme can be made, including publication in local newspapers and consultation with bus operators and other local authorities affected, the traffic commissioners, police and representatives of bus users.

5. Section 116 provides that a scheme can be made with or without modifications; specifies what must be included in the scheme as made, including the facilities to be provided, the standards to be required of bus operators, the date of coming into operation (which must be no less than 3 months after making) and the duration - to be not more than 5 years. This recognises the need to review the arrangements after 5 years; they can be renewed, with or without modification, subject to the appropriate procedures. There is scope for exclusions (an example might be a community bus service acting as a feeder to a main bus route, on which there are QP facilities). And the scheme may not be brought into force before it is reasonably practicable for the relevant facilities to be provided and the operators to meet the prescribed standards.

6. The scheme must be publicised no later than 14 days after making, by publishing a notice in a local newspaper, and by notifying all operators affected, and the Traffic Commissioners.

7. Section 117 provides for consultation and publicity in the event that an authority decides to postpone the introduction of a QP scheme, which may be for up to 12 months.

8. Section 118 states the effect of a QP scheme, once in place. Crucially, it places obligations on both the local authority and the bus operators, aiming at an even-handed partnership, with both parties able to have confidence that the other's obligations will be honoured, and that the investment made will be secure. Thus there is a clear duty on the authority to provide the specified facilities and to continue to do so while the scheme remains in operation (unless there are exceptional circumstances); failure to do so would be actionable in court.

9. Bus operators wishing to make use of the scheme facilities must first have given a written undertaking to the relevant Traffic Commissioners that they will provide the services to the required standard and must duly provide them to that standard (except in circumstances beyond their control). The purpose of the written undertaking is to alert the Traffic Commissioners, who will be responsible for enforcement through the bus registration system (paragraphs 10 and 22 of Schedule 11 amend sections 26 and 111 of the 1985 Act to empower Traffic Commissioners to take enforcement action if an operator is in breach).

10. Excluded services are not subject to the requirements in this section, but any conditions attached to the exclusion are to be treated as if they are registration conditions. Thus an excluded operator who fails to comply with the conditions of his exclusion can face enforcement action by the traffic commissioners.

11. Section 119 provides for regulations to govern the incorporation of existing facilities into a QP scheme.

12. Sections 120 to 121 provide for the variation or revocation of QP schemes, once made, and for the involvement where appropriate of a traffic regulation authority affected. This gives flexibility both for future changes, and for any circumstances where it may be necessary to revoke a scheme. Revocation of a scheme before its termination can only be carried out if all the participating operators consent; but consent is not to be unreasonably withheld.

13. Section 122 provides for regulations to make further provision with respect to QP schemes, if this proves necessary, although there are no immediate plans to do so.

14. Section 123 allows for the issue of statutory guidance on QP schemes.

15. By virtue of section 153 (Competition test), local authorities pursuing a QP scheme will be subject to a special competition test in Schedule 10. This provides that, notwithstanding significant adverse effects on competition, local authority action can be justified if it is in pursuit of stated objectives (such as improving bus services and reducing or limiting traffic congestion) and the effects on competition are not disproportionate to the achievement of those objectives. Further advice from the Office of Fair Trading is expected shortly on this.

Quality Contracts Schemes

16. Section 124 describes the conditions for bringing forward a proposal for a QC scheme. Local transport authorities, either alone or jointly, may make a QC scheme under which they determine the necessary level and standards of bus provision for the area, and secure those through a Quality Contract(s). Such a scheme may only be made if they are satisfied that it is the only practicable way to implement their bus strategy (or strategies) and that the scheme will implement it (or them) in a way which will deliver best value, i.e. be economic, efficient and effective. There are requirements for prior consultation and approval.

17. A Quality Contract may contain provisions as to payment of subsidy and the provision of other services or facilities; an example might be the provision of ticket selling shops and the like. Special provision is made as regards tendering for QC contracts; and section 88(1) of the Transport Act 1985 Act is accordingly disapplied.

18. As with QP schemes, local transport authorities are to co-operate together in the exercise of any of their functions under Part II of the Bill as to QC schemes; and to consider the desirability of acting jointly with another such authority, for example, to overcome possible boundary problems. It is for authorities to keep QC schemes under review; ensuring compliance by bus operators is thus a matter for the authority, rather than the traffic commissioners.)

19. Section 125 provides similar notification and consultation requirements as for QP schemes, except that in this case all holders of public service vehicle licences or community bus permits who would be affected by the QC scheme are to be consulted.

20. Section 126 deals with the process of seeking and obtaining the consent (in England) of the Secretary of State to the making of a Quality Contract scheme. The authority must give a statement of reasons, and supply any other information reasonably requested. Bus operators may make written representations in connection with the scheme.

21. The Secretary of State may must be satisfied that the appropriate tests in section 124 have been met; and that it is in the public interest that the scheme should be made. He may approve the scheme with modifications, in which case they must be brought to the attention of the scheme-making authority, and they must in turn consult any of the previously consulted parties likely to be affected; and notify the national authority of the outcome.

22. Section 127 provides for the making of a Quality Contract scheme and what it must contain, and deals with its introduction and duration, and scope for exclusions. In particular, a QC scheme may not come into operation for at least 21 months after it is made. This is in recognition of the fact that some bus operators currently operating in the area may lose the right to do so, and must be allowed due time to adjust and redeploy assets. A scheme may not last for more than 10 years. If, on review, it is decided to continue QC arrangements, a fresh scheme must be made.

23. If approved, a scheme must be made (if it is to be made) within 6 months of approval. That is to ensure that it cannot be 'left hanging' over the heads of local bus operators indefinitely, since to do so would introduce unnecessary uncertainty. The scheme must include full details of the area affected and must outline the services to be provided and features of the proposed invitations to tender, and the salient dates for introduction and duration.

24. Schemes may provide for exclusions. It might be deemed appropriate, for example, to allow limited exclusions, perhaps at the boundary of the scheme, for existing services which primarily serve routes outside the scheme area. Such exclusions can be subject to conditions, so that the exemption might only apply so long as the services continued at their current frequency or did not stray further into the QC area.

25. The made scheme must be publicised, with notice of making given no more than 14 days after the event, by means of a notice in a local newspaper, and a copy sent to the traffic commissioners, alerting them to the fact that they will no longer have jurisdiction over QC services in terms of bus registration functions. It will be for the local authority, as contracting party, to monitor and ensure compliance with the QC contract conditions.

26. There is power for the Secretary of State, by order, to vary the 21 month minimum period for introducing a QC scheme, should experience suggest the period is either too short or too long.

27. Section 128 provides powers temporarily to postpone a QC scheme, subject to appropriate notification.

28. Section 129 provides that once a QC scheme is in operation, sections 6 to 9 of the Transport Act 1985 cease to have effect in the relevant area and no local service may be provided in that area except in accordance with the QC. However, where a service is excluded from the QC scheme, sections 6 to 9 continue to apply to it and the traffic commissioner may take action for breach of any conditions under which that service is excluded.

29. Section 130 provides for the letting of individual contracts to implement the scheme. Tenders must be sought by general invitation no later than 3 months after the making of the scheme and contracts may last no more than 5 years. Tenders may only be accepted from licensed operators of public service vehicles or persons holding a community bus permit under section 22 of the 1985 Act.

30. Section 131 provides for cases where the normal tender procedure does not apply. Express provision is made for emergencies but the clause may be extended by regulation to cover other cases. Regulations may limit the duration of these emergency contracts so as to ensure that the provisions of clause 110 are not improperly circumvented.

31. Section 132 makes provision for the variation or revocation of a scheme. There is also a power for the Secretary of State to make regulations, allowing the scheme to be revoked before it comes into operation in circumstances set out in the regulations (for example, an unexpected collapse of the tender process).

32. Section 133 allows further provision to be made for QC schemes, by means of regulations, if this proves necessary; but there are no immediate plans to do so.

33. Section 134 allows for regulations to make further provision, if needed, to deal with the transition to and from QCs.

 Summary note of QP and QC scheme process and time scales

ACTIVITY	TIME (statutory periods are in bold)
Quality Partnership Scheme Local authority draws up QP scheme
Authority publishes statutory notices and undertakes consultation	Not specified; assume 3 months minimum for consultation and 1 month minimum for consideration of responses
Authority decides to proceed to make scheme
Authority makes the scheme and publishes statutory notice of made scheme	Publicity must be no later than 14 days after making. Operative date for coming into force must be at least 3 months after date of making or, if later, date of any relevant traffic regulation order; and not before it is reasonably practicable for the authority to provide the facilities, and for operators to provide the specified standards of service. Scheme must last for at least 5 years.
Quality Contract Scheme Local authority draws up QC scheme
Authority publishes statutory notices and undertakes consultation	Not specified; assume 3 months minimum for consultation and 1 month minimum for consideration of responses
Authority decides to proceed and submits scheme to S. of S. for approval
Secretary of State considers and approves	Not specified; assume 3 months
Authority makes the scheme	Must be made within 6 months of approval
Authority publishes statutory notice of made scheme	Must be within 2 weeks of making the scheme
Authority invites tenders	Must be invited within 3 months[1] of making the scheme; tenders may last for up to 5 years.
Scheme comes into operation	Must not be sooner than 21 months[1] from making of scheme
Scheme may last for up to 10 years.
Authority must keep under review the extent to which the QC scheme is complied with

[1] Period may be amended by order.

Buses and Taxis Division 1, October 2001