Part II Local transport

Financial and competition provisions

152 Agreements providing for service subsidies.

(1)

Part V of the M1Transport Act 1985 (expenditure on public passenger transport services) is amended as follows.

(2)

In section 89 (obligation to invite tenders for subsidised services), for subsections (7) and (8) substitute—

“(7)

An authority issuing an invitation to tender under this section shall, in determining whether to accept a tender submitted in response to the invitation or which (if any) of several such tenders to accept, have regard in particular to—

(a)

a combination of economy, efficiency and effectiveness;

(b)

the implementation of the policies set out in the appropriate bus strategy; and

(c)

the reduction or limitation of traffic congestion, noise or air pollution.

(8)

In subsection (7)(b) above “the appropriate bus strategy” means—

(a)

in the case of a local transport authority (within the meaning of section 108(4) of the Transport Act 2000), their bus strategy;

(b)

in the case of a district council which is not such an authority, the bus strategy of the council for the county in which the district is situated; and

(c)

in the case of a Passenger Transport Executive for a passenger transport area, the bus strategy made jointly by the Passenger Transport Authority for the area and the councils for the metropolitan districts comprised in the area.”

(3)

In section 90(3) (duty of authority to publish reasons for considering that payment of subsidies to secure service in accordance with accepted tender is conducive to achieving most effective and economic application of funds), for the words from “is conducive” to the end substitute “ accords with section 89(7) of this Act. ”

(4)

In section 92(1) (authorities subsidising public passenger transport services not to inhibit competition between persons providing or seeking to provide such services in their area), for the words from “so conduct” to the end substitute “ have regard to the interests of the public and of persons providing public passenger transport services in their area. ”

F1153Competition test: functions and agreements relating to buses

(1)

Schedule 10 contains provision applying competition tests in relation to—

(a)

the exercise of functions relating to quality partnership schemes, ticketing schemes and subsidised local services,

(b)

voluntary partnership agreements and certain other agreements, decisions and practices relating to bus services.

(2)

A voluntary partnership agreement is any voluntary agreement under which—

(a)

a local transport authority, or two or more local transport authorities, undertake to provide particular facilities, or to do anything else for the purpose of bringing benefits to persons using local services, within the whole or part of their area, or combined area, and

(b)

one or more operators of local services undertake to provide services of a particular standard.

(3)

In subsection (2)—

“facilities” means—

(a)

facilities provided at specific locations along routes served, or proposed to be served, by local services within the area to which the agreement relates, or

(b)

facilities which are ancillary to such facilities;

“standard”, in the case of any services, includes—

(a)

any requirements which the vehicles being used to provide the services must meet,

(b)

any requirements as to frequency or timing of the services,

(c)

any requirements as to the maximum fares that may be charged for particular journeys, or for journeys of particular descriptions, on services to which the agreement applies;

“voluntary agreement” means an agreement made otherwise than under sections 114 to 123 (quality partnership schemes).

154 Grants to bus service operators.

(1)

The Secretary of State with the approval of the Treasury (as respects England) or the National Assembly for Wales (as respects Wales) may make grants to operators of eligible bus services towards their costs in operating those services.

(2)

The Secretary of State with the approval of the Treasury (as respects England) or the National Assembly for Wales (as respects Wales) may make provision by regulations as to the method of calculation of grants.

(3)

Subject to the provisions of any such regulations, grants under this section shall be of such amount and subject to such conditions (including conditions requiring their repayment in specified circumstances) as may be determined by—

(a)

the Secretary of State with the approval of the Treasury (as respects England), or

(b)

the National Assembly for Wales (as respects Wales).

(4)

A determination under subsection (3) may be made either generally or in relation to particular cases or classes of case.

(5)

In this section “eligible bus services” means bus services of a class (or using vehicles of a class) prescribed by regulations made by the Secretary of State (as respects England) or the National Assembly for Wales (as respects Wales).

(6)

Section 92 of the M2Finance Act 1965 (grants towards duty charged on bus fuel) and section 111 of the M3Transport Act 1985 (unregistered and unreliable local services: reduction of fuel duty grant) cease to have effect.

155F2Sanctions

(1)

Where F3a traffic commissioner is satisfied that the operator of a local service has, without reasonable excuse—

(a)

failed to operate a local service registered under section 6 of the M4Transport Act 1985,

F4(aa)

failed to comply with the requirements of regulations made under section 6(9)(i), (j) or (k) of that Act,

(b)

operated a local service in contravention of that section or section 118(4) or 129(1)(b) of this Act,

F5(ba)

failed to comply with a requirement imposed by virtue of section 134B(7)(c) of this Act, or

(c)

failed to comply with section 138 or 140(3) of this Act,

he may F6make one or more orders under subsection (1A).

F7(1A)

The orders are—

(a)

an order that the operator pay a penalty of such amount as is determined in accordance with subsection (3);

(b)

an order that the operator expend such sum of money as is determined in accordance with subsection (3) in the manner mentioned in subsection (1B);

(c)

an order that the operator provide compensation (see subsection (1C)) to passengers of such description as is specified in the order;

(d)

an order of such other description as the Secretary of State (as respects England) or the Welsh Ministers (as respects Wales) may by order prescribe for the purposes of this paragraph.

(1B)

An order under subsection (1A)(b) may require the operator to expend money on or towards—

(a)

the provision of specified local services or specified facilities to be used in connection with such services;

(b)

specified improvements in such services or facilities.

In this subsection “specified” means specified in the order.

(1C)

Compensation under subsection (1A)(c)—

(a)

may take the form of payments of money, or

(b)

may take such other form (including the provision of free travel or travel at a reduced price) as is specified in the order;

and shall be of such amount, or equivalent in value to such amount, as is determined in accordance with subsection (3).

F8(2)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)

F9The amount mentioned in subsections (1A)(a) and (b) and (1C) is such amount as the traffic commissioner thinks fit in all the circumstances of the case, but must not exceed —

(a)

£550, or

(b)

such other amount as the Secretary of State (as respects England) or the National Assembly for Wales (as respects Wales) may by order specify,

multiplied by the total number of vehicles which the operator is licensed to use under all the PSV operator’s licences held by him.

F10(4)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)

After F11making an order under subsection (1A) , the traffic commissioner must at once give notice in writing to—

(a)

the Secretary of State (as respects England) or the National Assembly for Wales (as respects Wales), and

(b)

the operator.

(6)

The operator may appeal to the F12Upper Tribunal against F13the making of the order.

F14(6A)

If the operator fails to comply with an order under subsection (1A)(b), (c) or (d), the traffic commissioner may order the operator to pay a penalty of such amount as is determined in accordance with subsection (6B).

(6B)

That amount is such amount as the traffic commissioner thinks fit in all the circumstances of the case, but must not exceed 110% of the maximum amount which may be ordered in accordance with subsection (3).

F15(7)

An amount ordered to be paid under subsection (1A)(a) or (6A) is—

(a)

payable to the Secretary of State (as respects England) or the Welsh Ministers (as respects Wales), and

(b)

recoverable as a civil debt.

F16(8)

Other provisions that may need to be considered include the following provisions of the Transport Act 1985—

(a)

sections 26 and 27 (attachment of conditions to PSV operator's licence),

(b)

sections 27A and 27B (additional powers of traffic commissioner where services are not operated as registered etc).

F17156 Non-metropolitan transport grants.

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157F18Grants to Integrated Transport AuthoritiesF19and combined authorities

(1)

The Secretary of State may, with the approval of the Treasury, make grants to F20the Integrated Transport Authority for an integrated transport area in England for the purpose of enabling the Authority, or the Passenger Transport Executive for the area, to carry out any of their functions.

F21(1A)

The Secretary of State may, with the approval of the Treasury, make grants to a combined authority for the purpose of enabling the authority to carry out any of their functions.

(2)

Grants under this section shall be of such amount and subject to such conditions (including conditions requiring their repayment in specified circumstances) as the Secretary of State may, with the approval of the Treasury, determine.

(3)

A determination under subsection (2) may be made either generally or in relation to particular cases or classes of case.

158 Repayment of grants towards bus fuel duty.

(1)

Section 111 of the M5Transport Act 1985 (unregistered and unreliable local services: requirement to repay twenty per cent. of bus fuel duty grants) is amended as follows (until it ceases to have effect as a result of section 154(6)).

(2)

For subsections (2) to (4) substitute—

“(2)

If any amount has been paid to the operator by way of grant under section 92 of the M6Finance Act 1965 (grants towards duty charged on bus fuel) in respect of any services operated during the period of three months ending with the day on which the determination under subsection (1) above is made, there is due from the operator—

(a)

to the Secretary of State (as respects England); or

(b)

to the National Assembly for Wales (as respects Wales),

such percentage of that amount as the traffic commissioner thinks fit in all the circumstances of the case.

(3)

The percentage determined shall be at least one per cent. but not more than twenty per cent.

(4)

A traffic commissioner who makes a determination under this section shall at once give notice in writing to—

(a)

the Secretary of State (as respects England) or the National Assembly for Wales (as respects Wales); and

(b)

the operator;

and the operator may appeal to the Transport Tribunal against the determination.”

(3)

In subsection (5), omit—

(a)

“to the Secretary of State”, and

(b)

the words from “and any amount” to the end.

159 Abolition of financial plans of Passenger Transport Executives.

Sections 3 to 5 of the M7Transport Act 1983 (duty of Passenger Transport Executives to prepare three-year financial plans and determination of revenue grants) shall cease to have effect.