Bus Services (No. 2) Bill [ Lords ] (Third sitting)
(Limited Text - Ministerial Extracts only)
Read Full debateThe Committee divided: - Ayes: 2 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 2 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 2 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 10 - Question accordingly negatived.
The Chair
I remind the Committee that with this we are discussing the following:
Amendment 47, in clause 7, page 3, line 26, leave out “may” and insert “must”.
Amendment 48, in clause 7, page 3, line 27, leave out from “there” to end of line 34 and insert—
“is a benefit to persons making journeys on the proposed service.”
Amendment 49, in clause 7, page 3, line 36, leave out “may” and insert “must”.
Amendment 50, in clause 7, page 3, line 37, leave out from “that” to “will” and insert—
“the proposed service has benefits to the economy of the area to which the scheme relates, or to persons living in that area,”.
Government amendments 4 and 5.
Clause stand part.
Clauses 8 and 9 stand part.
The Parliamentary Under-Secretary of State for Transport (Simon Lightwood)
It is a pleasure to serve with you in the Chair, Sir Desmond.
The Bill recognises that commercial operators can play a key role in providing commercial services that complement franchising schemes and add value to the overall bus offer for local transport users. That includes cross-boundary services, which provide crucial links between communities. That is why we are legislating to introduce new tests that franchising authorities can use in determining whether to grant service permits. The tests allow authorities to consider a much wider range of benefits that services proposed by commercial operators could provide. The new tests will also allow authorities to tolerate some adverse effects to franchised services if they are outweighed by the benefits. Overall, franchising authorities will have greater scope to grant service permits and harness the additionality of the market in delivering great bus networks.
The amendments tabled by the hon. Member for Broadland and Fakenham would, however, undo many of the improvements we are making, and undermine the service permit regime as well as local transport authorities’ ability to franchise. The amendments would largely remove franchising authorities’ ability to even consider whether a commercial service would have an adverse effect on franchised services, while compelling them to grant service permits in the vast majority of cases. In practice, that would mean that commercial services could compete directly with franchised services, undermining the service finances and goals, and ultimately making franchising unworkable.
In direct response to the hon. Member’s comments, the Bill gives greater scope for authorities to grant these additional services. However, as he acknowledged, it cannot be a free-for-all, which is what the amendment would in effect cause. We understand that in Greater Manchester the vast majority of service permits have been granted under the existing test, and the Bill’s measure will allow franchising authorities even more flexibility to grant service permits with applications from operators or in the interest of passengers and local people.
Addressing the claim of the hon. Member for Isle of Wight East that franchising is unattractive to smaller rural local transport authorities, the Bill aims to give local leaders greater flexibility to determine how best to plan and deliver bus services to meet the needs of local transport users. There is no one-size-fits-all approach. Consideration has been given to rural modes of franchising, and there are plans to pilot models better suited to rural areas, as I have touched on in the past.
While it is for local transport authorities to decide the best option to manage their services, franchising can be an attractive option in a rural setting. It can be used to support a fully integrated network, combining core franchise routes with commercial services operating under a service permit awarded by the authority, ensuring strong branch connections to main corridors.
Simon Lightwood
I am going to try and make some progress. We have spent a significant amount of time on this.
The hon. Member for Broadland and Fakenham once again raised Manchester’s experience with bus franchising. He again quoted figures on the cost of franchising in Manchester. On the first day of the Committee I explained that the figures referred to the level of investment being made to improve Greater Manchester’s bus network. The adoption of franchising in Greater Manchester has resulted in little additional cost, and evidence to date shows that the model is more efficient and effective at delivering value for money.
Another franchising model in Jersey encourages both operators and local transport authorities to reinvest into the bus network. The operator keeps fare revenue, and profits that go over a certain set limit are shared between the LTA and the operator. Money is then reinvested by the LTA to improve services. The model adds flexibility and actually supports innovation and draws on the experience of the operator. This model has been tested in other areas through our franchising pilot programme.
The Bill makes some limited changes to the role of traffic commissioners in England, including changing the default position for the registration of services operating under the service permits within a franchised area. The traffic commissioner will also have powers to act against operators who breach the Bill’s mandatory training requirements; we will come on to that later in the Committee’s debates.
The presence of traffic commissioners across the regions and countries of Great Britain means that they are well placed to make decisions about the operation of bus services in different places. The responsibility of traffic commissioners extends beyond buses. To mention just a couple, it includes the licensing of operators of heavy goods vehicles and other service vehicles, and the granting of vocational licences. These responsibilities clearly extend beyond the Bill’s purpose; this Bill is not the place for a wider debate on the role of traffic commissioners.
I reiterate that passengers are at the very centre of this Government’s bus reform agenda. This is about delivering better buses, and people taking the bus more because they offer better connections and are reliable, safe, affordable and integrated into the transport network. Given that, I would ask the hon. Member for Broadland and Fakenham not to press his amendments.
Government amendments 4 and 5, tabled in my name, are intended to provide clarity on the type of services considered “cross-boundary” under clause 7. This means that any service that has at least one stop in an area with a franchising scheme, and at least one stop outside of the franchised area, will be considered a cross-boundary service. This change is logical, simplifies matters for franchising authorities and operators, and will ensure that the benefits of cross-boundary services to multiple communities can be considered, regardless of where the service starts and ends.
Clause 7 gives local authorities greater flexibility in how they access service permit applications from operators. These permits allow bus operators to run services into, or within, a franchised area on a commercial basis, rather than as a franchised service. The Bill introduces new tests that local authorities can use when deciding whether to approve a service permit. These tests allow them to consider a wider range of factors, such as whether the proposed service would benefit passengers outside the franchised area in the case of cross-boundary services.
It is important that franchising authorities are able to benefit from the opportunities that the commercial sector can provide in franchising areas, including for cross-border services, which are those serving a franchising area and nearby areas. These services are important, as the bus journeys that passengers want to make are not necessarily defined by scheme boundaries. This measure aims to give franchising authorities greater flexibility to provide better overall outcomes for passengers.
Clause 8 reapplies the requirement for bus services operating under a service permit in a franchised area to register their routes and timetables with the traffic commissioner. For cross-boundary services, the section of the route outside the franchised area already needs to be registered. The Bill clarifies that the part inside the franchised area also needs to be registered. This keeps the requirements consistent and easier for bus operators to follow.
In addition to the registration requirements, cross-boundary services and any services operated, under permit, wholly within the franchised area, such as sightseeing tours, must also still comply with the conditions of their service permit. This lets franchising authorities maintain control through existing regulations. However, the Bill also gives franchising authorities the power to exempt certain services from registration inside the franchised area if they would prefer to manage them solely through the service permit. Overall, these changes provide clearer rules for operators and authorities, and greater flexibility for authorities, helping to improve service delivery for passengers.
Clause 9 automatically exempts temporary rail and tram replacement services from the requirement to obtain a service permit when operating within a franchised area. As I am sure Members will understand, these services often need to be introduced quickly and to adapt to changing circumstances, so flexibility is essential. By removing the permit requirement, this measure reduces administrative burdens and saves both operators and franchising authorities the time and costs associated with applying for and issuing permits.
Jerome Mayhew (Broadland and Fakenham) (Con)
It is jolly nice to see you in the Chair, Sir Desmond. As I spoke to the amendment before lunch, it falls to me now only to press it to a vote.
Question put, That the amendment be made.
The Chair
As amendments 49 and 50 are almost identical to the previous amendments, my discretion is not to proceed to a vote.
Amendments made: 4, in clause 7, page 4, line 10, leave out “but” and insert “and”.
This amendment and Amendment 5 widen the category of services that are capable of being cross-boundary services.
Amendment 5, in clause 7, page 4, line 11, leave out
“begins or ends, or begins and ends,”
and insert
“has one or more stopping places”.—(Simon Lightwood.)
This amendment and Amendment 4 widen the category of services that are capable of being cross-boundary services.
Clause 7, as amended, ordered to stand part of the Bill.
Clauses 8 and 9 ordered to stand part of the Bill.
Clause 10
Report on assessment of proposed scheme
Simon Lightwood
I will start with amendment 57, tabled by the hon. Members for Wimbledon and for North Norfolk, which would require the Secretary of State to assess the adequacy of central Government funding to support the provision of bus services under franchised schemes. Under the Transport Act 2000, franchising authorities are already required to undertake a rigorous assessment to determine whether bus franchising is feasible, affordable, and deliverable in their area. The franchising assessment and the independent assurance report must then be published alongside the franchising consultation, ensuring transparency regarding the local transport authority’s decision. That comprehensive planning and assurance process significantly reduces the likelihood of needing central Government oversight and intervention, making the amendment unnecessary.
The hon. Member for Wimbledon asked for an update on my Department’s engagement with relevant stakeholders to identify approved persons. Bodies in the accountancy sector could include the Chartered Institute of Public Finance and Accountancy, the Association of Chartered Certified Accountants and the Chartered Institute of Management Accountants. To identify who else may qualify as an approved person, the Department intends to hold discussions with other stakeholders, including the Chartered Institute of Logistics and Transport, the Chartered Institution of Highways and Transportation and industry bodies such as the Confederation of Passenger Transport.
My Department will also look at whether those with senior and extensive experience in either the bus sector or local government could provide assurance. Guidance will be provided to franchising authorities, setting out considerations to be taken into account when selecting an independent approved person. The reason why the clause is subject to future regulations is that qualifications will change over time, so it is right to have the flexibility to respond to those changes.
The core principle underpinning the Bill is that decisions should be made at the most appropriate level, specifically by devolving to local transport authorities the power to manage bus services within their area. The amendment would undermine the intention of the Bill. For those reasons, I hope that the hon. Member for Wimbledon will withdraw it.
Amendment 59, also tabled by the hon. Members for Wimbledon and for North Norfolk, is a probing amendment on whether the Secretary of State intends to issue the criteria for the approved person role within three months of Royal Assent. The Department intends to introduce secondary legislation defining “approved person” alongside updated bus franchising guidance to facilitate implementation of the new measures. That work cannot be completed within three months of Royal Assent, as it requires thorough engagement with the sector and the progression of a statutory instrument. The existing legislation will remain in force until secondary legislation is delivered; I hope that gives some reassurance. The Bill gives franchising authorities significant flexibility to specify services in ways that are tuned to the needs of local bus users. More detail on how franchising authorities can use that flexibility will be set out in guidance.
The purpose of clause 10 is to broaden the pool of persons able to conduct assurance reports of proposed franchising schemes. Under current legislation, authorities that have developed an assessment of a proposed franchising scheme must obtain an independent assurance report that looks at whether the assessment has been developed with robust financial and economic information and whether the analysis is sufficient. However, the requirement that the report be conducted by an “auditor” has meant that very few people are willing and able to carry out that assurance.
The clause seeks to remove the bottleneck and make the franchising process quicker and less costly and, by enabling expertise to be brought in from the wider industry, increase the quality of the independent review. It will also give a franchising authority more flexibility to decide when to appoint an independent assessor, allowing the assessor to provide informal feedback to the authority much earlier in the assessment process, potentially saving both time and money. The Department intends to set out further qualifications and experience in secondary legislation, which will enable a greater number of professionals to undertake assurance and remove the bottleneck that currently exists.
Clause 11 requires franchising authorities to consult disabled bus users, prospective users or representative organisations before making a franchising scheme.
Dr Allison Gardner (Stoke-on-Trent South) (Lab)
I am really heartened by clause 11 and I welcome it. I am sure the Minister agrees that consulting people who live with disabilities is vital for any future public transport service. Even with the best of intent, one cannot plan accessible services without understanding the lived experience of disabled users and the associated infrastructure.
Simon Lightwood
I completely agree.
The clause is intended to ensure that local transport authorities understand the perspective of disabled people and make franchising schemes that are better informed by the priorities of disabled passengers and take account of their needs more effectively. The clause sits alongside the schedule, which will introduce similar consultation requirements when authorities vary existing franchising schemes.
Government new clause 4 first corrects an issue in the Transport Act 2000. The Act currently states that when preparing a franchising assessment, authorities must consider the local transport plans of any neighbouring Scottish councils, which is unnecessary because Scottish councils do not have local transport plans. The new clause addresses the matter, while maintaining a requirement for franchising authorities to consider bus-related policies adopted by councils in Scotland. It will also require franchising authorities to consider whether a proposed franchising scheme would support the implementation of bus-related policies adopted by neighbouring Scottish transport partnerships, and require franchising authorities to consult Welsh Ministers and Scottish transport partnerships, where appropriate, as part of a consultation on establishing a franchising scheme. Finally, the new clause makes a technical change to define the term “council in Scotland” for the purposes of part 2 of the Transport Act 2000.
The Chair
With this it will be convenient to discuss the following:
Government amendments 7 to 16.
The schedule.
Simon Lightwood
Clause 12, alongside the schedule to the Bill, sets out new, bespoke variation procedures for authorities to follow when they wish to make changes to a franchising scheme. The procedures are clear and simple, to address the difficulties that franchising authorities have faced in interpreting existing legislation. They are also streamlined to enable franchising authorities to make minor changes in a more nimble way, balancing appropriate levels of consultation and transparency. This measure will reduce costs and timescales for franchising authorities in meeting the needs of local bus users.
Government amendments 7 to 10 to the schedule relate to the procedure for varying franchising schemes. Amendments 7 to 9 would have the effect of confirming that the requirements to consider the local transport plans of neighbouring authorities apply only where an authority is required to have such a plan. Scottish authorities are not required to have local transport plans. The amendments, however, clarify that a franchising authority must consider whether expanding the area of their franchising scheme would support the implementation of any other bus-related plans and policies adopted by Scottish councils. Amendment 10 will ensure that franchising authorities consider Scottish transport partnerships’ transport policies when assessing a variation to a franchising scheme, where relevant.
Government amendments 11 to 16 also amend the schedule and will require franchising authorities to consult with Welsh Ministers and Scottish transport partnerships before varying a franchising scheme that would affect them. In the case of Wales, that is in addition to the requirement already in the Bill for Welsh local transport authorities to be consulted, where relevant. It is also appropriate to consult Welsh Ministers in the light of the Welsh Government’s Bus Services (Wales) Bill, which is before the Senedd. The amendments future-proof the Bill, given the Welsh Government’s ambitions to franchise their entire bus network.
The schedule sets out the detailed procedures for varying an existing franchising scheme. There are separate procedures for variations to extend the geographical area of a scheme, reduce the area of a scheme, and other types of variation. There are three parts to the schedule, setting out the specifics of the different procedures, depending on whether a variation is expanding or reducing a scheme.
Jerome Mayhew
Clause 12 amends the Transport Act 2000 to set out the new process for varying a franchise scheme. In particular, subsection (2)(b) removes the minimum notice period of six months before a variation can come into effect. I will not seek to divide the Committee on this, but what assessment has been undertaken of the impact of a reduced notification period on service providers? What confidence can the Minister give current service providers that the impact will be minimised? What was the original rationale for the six-month delay, and what has changed to remove the need?
Government amendments 7 to 10 are sensible clarifications to ensure that the requirement to consider policies under section 108(1)(a) of the Transport Act applies only where such policies are mandatory. I fully agree with them. Government amendments 11 to 16 tidy up the requirement for consultation with the devolved Administrations in Wales and Scotland, where a proposed franchising scheme under amendments 11 and 12, or a variation of an existing scheme under amendments 13 to 16, would affect the devolved area. Again, that is a sensible clarification that needs no further elaboration.
Simon Lightwood
I have already explained our position.
Question put and agreed to.
Clause 12 accordingly ordered to stand part of the Bill.
Schedule
Procedure for varying franchising scheme
Amendments made: 7, in the schedule, page 44, line 29, leave out
“by neighbouring relevant local authorities of”.
This amendment, together with Amendment 8 and Amendment 9, ensures that the requirement to consider policies under section 108(1)(a) of the Transport Act 2000 applies only where authorities are required to have such policies.
Amendment 8, in the schedule, page 44, line 30, before “those” insert
“by neighbouring local transport authorities of”.
See the statement for Amendment 7.
Amendment 9, in the schedule, page 44, line 31, before “other” insert
“by neighbouring relevant local authorities of”.
See the statement for Amendment 7.
Amendment 10, in the schedule, page 45, line 14, at end insert—
“(ba) a Transport Partnership created under the Transport (Scotland) Act 2005,”.
This amendment requires a franchising authority to consider the policies of a neighbouring Scottish Transport Partnership when assessing a proposed variation of a franchising scheme.
Amendment 11, in the schedule, page 46, line 39, at end insert—
“(ea) the Welsh Ministers if, in the opinion of the authority or authorities, any part of Wales would be affected by the proposed variation,”.
This amendment requires consultation with the Welsh Ministers before a franchising authority varies a franchising scheme where the variation would affect any part of Wales.
Amendment 12, in the schedule, page 47, line 13, at end insert—
“(ea) a Transport Partnership created under the Transport (Scotland) Act 2005,”.
This amendment requires consultation with a Scottish Transport Partnership before a franchising authority varies a franchising scheme where the variation would affect any part of the Partnership’s area.
Amendment 13, in the schedule, page 49, line 22, at end insert—
“(ea) the Welsh Ministers if, in the opinion of the authority or authorities, any part of Wales would be affected by the proposed variation,”.
This amendment requires consultation with the Welsh Ministers before an authority varies a franchising scheme where the variation would affect any part of Wales.
Amendment 14, in the schedule, page 49, line 38, at end insert—
“(ea) a Transport Partnership created under the Transport (Scotland) Act 2005,”.
This amendment requires consultation with a Scottish Transport Partnership before a franchising authority varies a franchising scheme area where the variation would affect any part of the Partnership’s area.
Amendment 15, in the schedule, page 51, line 11, at end insert—
“(ai) the Welsh Ministers if, in the opinion of the authority or authorities, any part of Wales would be affected by the proposed variation;”.
This amendment requires consultation with the Welsh Ministers before an authority varies a franchising scheme where the variation would affect any part of Wales.
Amendment 16, in the schedule, page 51, line 39, at end insert—
“(ea) a Transport Partnership created under the Transport (Scotland) Act 2005,”.—(Simon Lightwood.)
This amendment requires consultation with a Scottish Transport Partnership before a franchising authority varies a franchising scheme where the variation would affect any part of the Partnership’s area.
Schedule, as amended, agreed to.
Clause 13
Direct award of contracts to incumbent operators
Siân Berry (Brighton Pavilion) (Green)
I beg to move amendment 34, in clause 13, page 8, line 5, after “operators” insert—
“or local government bus companies”.
This amendment, along with Amendments 35, 36 and 37, would mean that franchising authorities may directly award public services contracts to local government bus companies.
Jerome Mayhew
That was absolutely not clear from the drafting, and I do not feel able to support such opaque drafting. It would not be right to slip in five words and change the whole meaning of the clause. Perhaps it would be better to draft a new clause; I suspect the hon. Lady has time to do so before the end of the Bill’s consideration.
Simon Lightwood
I thank the hon. Member for Brighton Pavilion for tabling amendments 34 to 37, but the Bill already enables the direct award of franchising contracts to local authority bus companies.
Clause 13 allows for the direct award of franchising contracts to incumbent operators under specific conditions that are set out in the Public Service Obligations in Transport Regulations 2023. It would reduce transitional risks for local government authorities and operators when moving to a franchised network. It applies equally to private operators and LABCos. If a LABCo is an incumbent operator, it could absolutely be directly awarded a franchised contract under the clause, as could a private operator, if that was desired by the franchising authority. Clause 13, therefore, already allows franchising authorities to direct awards to LABCos.
Amendment 35 would allow a franchising authority to direct awards to a LABCo that is not an incumbent operator. For good reasons, clause 13 includes a restriction on direct awards to incumbent operators—that is, that any operator providing local services in an area immediately before a franchising scheme is made has been doing so for at least the three months prior. Those reasons include providing a stable and controlled contractual environment for staff and assets during a transition, while providing continuity of services to passengers. It also means that operators are established in, and familiar with, the area. That greater operational knowledge will help to drive more effective long-term procurement of competitive franchise contracts through data collection and sharing.
Those benefits are most likely to be achieved by franchising authorities working in areas with operators that have an established and reliable presence in the network and with whom they have established effective working relationships. I therefore hope the hon. Member for Brighton Pavilion will withdraw her amendment. Clause 13 already provides most of the powers she seeks, and keeping the incumbent element is an important part of ensuring some of the core benefits of the measure.
Siân Berry
I very much appreciate that my amendments would do different things from clause 13, and I also appreciate that the Public Service Obligations in Transport Regulations 2023 provide the ability to make a direct award to an internal operator at other times. However, I worry that if we do not make sure that we have that ability in primary legislation—I cannot find it elsewhere in the Bill—there is a risk that private companies will issue legal challenges against direct awards. That is the key thing that I would like the Government to address, potentially in a different clause.
Simon Lightwood
I simply do not feel that that is necessary. The way in which it is set out is clear enough.
I thank my hon. Friend the Member for Middlesbrough and Thornaby East for tabling amendment 72. Clause 13 allows for the direct award of initial franchising contracts to incumbent operators under specific conditions that are set out in the Public Service Obligations in Transport Regulations 2023. In doing so, we aim to reduce transitional risks for local transport authorities and operators when moving to a franchised network.
Clause 13 applies equally to private operators and LABCos. If a LABCo is an incumbent operator, it could be directly awarded a franchised contract under the clause. For good reasons, clause 13 includes a restriction on direct awards to incumbent operators only—that is, that any operator providing local services in an area immediately before a franchising scheme is made has been doing so for at least the three months prior. Those reasons include providing a stable, controlled, contractual environment for the transition of staff, as I have mentioned.
Clause 13 enables franchising authorities to directly award the first franchising contracts to incumbent operators. That is not about shutting out competition; it is about providing a stable, controlled environment to manage the transition to a franchising model. Long-term franchise contracts will be competitively tendered in the usual way.
Franchising authorities may wish to use the direct award measure to help to manage the transfer of staff and assets, gather data to inform future franchise contracts, and provide flexibility to stagger the tendering of competitive franchise contracts at different times. It may also help to support small and medium-sized enterprise operators to gain experience in a franchising model.
Direct award can be used only under specific conditions. For example, direct award contracts have a maximum duration of five years and are only for net cost contracts. In many cases, a shorter duration will be appropriate. Further, only the incumbent can receive a direct award contract for the same or substantially similar services.
Jerome Mayhew
I rise to speak briefly in support of Liberal Democrat amendment 66, which inserts a requirement for local transport authorities to review the adequacy of the existing network of local services—through proposed new subsection (4B)(a)—and the requirement to identify any gaps in provision, through proposed new subsection (4B)(b). Proposed new subsection (4B)(c) states that what further action the local transport authority intends to take to address the gaps identified must be set out.
Proposed new subsection (4C) would require the authority to publish both the assessment and the resulting plan after the relevant consultation. It is clearly a good idea to identify the scale of opportunity in the local area as well as what is already available. Such good information would inform good future decisions, so I have no hesitation in supporting the amendment.
Amendment 64, which was also tabled by the Liberal Democrats, would require the Secretary of State to provide Parliament with a statement every six months with information on socially necessary services across a county and the number of whole routes cancelled, as well as frequency and days of the week. I am not supportive of it. Although I understand the rationale behind the amendment, and it would be interesting to have that information on a regular basis, it would be truly onerous to require the Secretary of State to provide that every six months for services right across the country. As with all things, when we are trying to design effective government, we have to balance benefit and cost. In my respectful view, such a requirement tips into being simply too onerous.
Assessments are, by their nature, local or regional, and I do not understand the practical utility of national reporting when the people who really need to know the information are in the local transport authority that would be providing the information in the first place. I therefore confirm my support for amendment 66 and my opposition to amendment 64.
Simon Lightwood
I thank the hon. Members for Wimbledon, for North Norfolk and for Chesham and Amersham (Sarah Green) for tabling a series of amendments to the clause. Amendment 66 would ensure that local transport authorities review their current local bus network to identify any gaps. I agree with hon. Members that it is important for local transport authorities to understand and know their networks. However, the desired effect of the amendment is already covered by the Transport Act 2000, which places a requirement on an authority to meet the needs of people living or working in their area. The local transport plan, which must be prepared by a local transport authority, is an important document that establishes the transport needs of local communities. Indeed, the existing measures in the Bill go even further than the 2000 Act by ensuring that members of the enhanced partnership work together to identify key socially necessary services, and to develop a robust plan in case any changes are proposed to them.
I turn to amendment 64. The Department already publishes large amounts of bus data through both the Bus Open Data Service and bus statistics on gov.uk. The Bill provides for even more data collection under clause 24, which specifically ensures that data collected by the traffic commissioner is shared with the Secretary of State. I therefore believe that the amendment is unnecessary. We already deliver a large amount of information to the public that can help them to understand all services operating in their area—not just socially necessary services—and may include many of the details listed in the amendment.
Siân Berry
I beg to move amendment 39, in clause 14, page 9, line 32, after “activities,” insert—
“(iv) health care services, or
(v) schools and other educational institutes,”.
This amendment would include services which enable people to access health or educational services in the definition of ‘socially necessary local services’.
Mr Kohler
The Liberal Democrats strongly support amendment 39, which was tabled by the hon. Member for Brighton Pavilion. As has been said, it is remarkably similar to, if not the same as, an amendment that we tabled in the House of Lords. It rightly proposes to expand the definition of “socially necessary local service” to include routes that serve healthcare facilities. I recognise the argument that the existing definition already covers them, but we think it is important to explicitly include hospitals, GPs and clinics. Accessing healthcare is a social necessity that should be explicitly recognised in law.
The same is true of education. From conversations with my hon. Friends the Members for Westmorland and Lonsdale (Tim Farron), for Esher and Walton (Monica Harding) and for North East Hampshire (Alex Brewer), to name a few, I know that there are growing concerns about school and college bus routes being cut, leaving students unable to travel independently to their places of learning.
The Government may argue that such services are already included under the definition but, if that is the case, why not make that explicit? Clarifying it in statute would only strengthen the Bill and provide clearer guidance for local authorities.
Simon Lightwood
Amendment 39 is not necessary as this issue has already been addressed during debates on the Bill in the other place. At the time, my noble Friend the Minister for Rail made a statement on the Floor of the House to the effect that the definition of a socially necessary local service encapsulates access to healthcare and schools as “essential goods and services”. I hope that that reassures the hon. Member for Brighton Pavilion about the Government’s intention. That being said, the Government will produce official guidance for local authorities on the issue of socially necessary local services. That guidance will refer to healthcare services and educational institutions as constituting “essential goods and services”.
Amendment 38 would expand the definition of socially necessary local services to include services that have been abolished in the past 15 years. In addressing it, we should consider the practical issues. A service that has been cancelled in the past 15 years may no longer meet the current needs of the community, which change over time. Furthermore, it is possible that previous services may have been folded into newer and more relevant bus routes. For those reasons, the amendment might not yield the expected beneficial outcomes.
That is by no means a prohibition or limitation on the powers of local transport authorities, however. As local transport authorities continually evaluate the needs of their communities, they still retain the power to consider implementing services along former routes, if they believe that doing so would address the needs of their communities. The amendment is therefore not necessary, so I ask the hon. Member for Brighton Pavilion not to press it.
Siân Berry
On a point of clarification, clause 14 adds proposed new subsection (15)(b) to section 138A of the Transport Act. The measure is quite specific that a current service is envisaged—it refers to a service “if cancelled”. Amendment 38 would respond to that by making sure that recently cancelled services were covered. Such services might have been taken away because operators anticipated the risk that they would be defined as “socially necessary”. Can the Minister reassure us on that point?
Simon Lightwood
I did not give way, but I appreciate the hon. Member’s additional comments.
Simon Lightwood
It is fine. I do not believe that the amendments are necessary.
Steff Aquarone
Amendment 54 is a really important protection for the safe and necessary services that I described. The shadow Minister’s points perhaps highlight the issue of funding more generally in bus franchising and enhanced partnerships.
The amendment would ensure that steps are taken within six months of identifying a route as socially necessary to ensure that the route actually runs. It would also enable the Government to provide them with support and funding to ensure that the route is available, if the financial burden on the local authority is deemed too great. This is another useful protection for the socially necessary services to ensure that they are not another victim of the funding crisis in local government. I have already made clear how important these services are and why we have to ensure that they are protected.
Looking at the perilous financial position of our county council in Norfolk, I fear that there could come a point where that spectacular fiscal mismanagement means that they cannot afford to keep these services going. In that instance, I do not think that my constituents should be the ones who are punished. The Government should step in to protect their access to all the services and opportunities that a socially necessary service provides.
To conclude, I am pleased that the importance of bus services has been truly recognised in law. I am supportive of the sentiment and much of the drafting of the clause. However, if we accept the importance of these routes, we should not make a half-baked attempt to protect them. We should ensure that all important services are considered when deciding on socially necessary routes, and that there are strong protections for both these services and our communities that they serve.
Simon Lightwood
Amendment 54 seeks to establish a process for local transport authorities to implement a socially necessary service where no operator has decided to do so. However, I believe it is unnecessary, because legislation already exists to address that issue. Under section 63(1) of the Transport Act 1985 and section 9A of the Transport Act 1968, local authorities are already under a duty to secure public passenger transport services that they consider appropriate to meet the requirements of the area, and which would not otherwise be met. Clause 14 also sets out that enhanced partnership schemes must include a requirement to investigate alternatives that can be provided if a socially necessary service is cancelled or varied in such a way as to have a materially adverse effect on the ability of passengers to access necessary goods and services.
The amendment also places an obligation on local authorities to fund specific bus services. However, as I set out before, how local authorities choose to spend their funding is a matter for them. I reflect on previous comments from the Liberal Democrats about being all for devolution, but also liking to stipulate exactly how to do it from the national centre. Local authorities are best placed to make decisions on how and where to prioritise their local bus grant. Restricting the range of choices for how an LTA does so would go against the spirit of the Bill, and it is our aim to give more control to local leaders. I have outlined why I believe that the amendment is not needed, and I ask the hon. Member for North Norfolk to withdraw it.
Steff Aquarone
I am a little disappointed that the Minister did not address the shadow Minister’s accusation of passing the financial buck directly to Government in his response. The measure is fundamentally about funding to protect services. If the Minister is relying on sections in previous Acts of Parliament, the interpretation of those sections is not a given without specific reference, which the Bill does not make. I do not share the Minister’s confidence that those obligations will be upheld.
Simon Lightwood
I think it is sad that the hon. Gentleman does not share my confidence in local areas being able to shape their services.
I now turn to amendment 74, which is the final non-Government amendment tabled to clause 14. It seeks to ensure that there is a Government-backed scheme that will guarantee that all socially necessary local services continue to operate. As I am sure I have mentioned before, this Government have reaffirmed our commitment to bus services in the recent spending review by confirming around £900 million each year from 2026-27 to maintain and improve vital bus services. Allocations for that fund will be made through the bus funding formula, which already takes account of local need. The Department is also committed to review the current formula and ensure that it is allocated as fairly as possible. That will take place in due course.
Simon Lightwood
Again, it is local areas that are best placed to use the resources given to them. We do not have a magic money tree. I know that the Liberal Democrats have a supply of those, but unfortunately we do not. The Department is also committed to reviewing the formula and ensuring that the money is allocated as fairly as possible. That will take place in due course. Once the allocations are made, it is then for local transport authorities to prioritise their funding according to the needs of their communities. It is right that they make those decisions and Government should not be asked to intervene. I therefore ask the hon. Members to seek to withdraw this amendment.
Question put, That the amendment be made.
Simon Lightwood
I beg to move amendment 6, in clause 14, page 10, line 27, leave out subsections (5) and (6).
This amendment removes the requirement for the Secretary of State to carry out an assessment of the impact of ending the £2 bus fare cap and of the level of employer’s national insurance contributions.
Simon Lightwood
Subsections (5) and (6) of clause 14 were inserted by non-Government amendments in the Lords. This amendment seeks to remove those subsections. Clause 14(5) places a statutory duty on the Secretary of State to undertake an assessment of the implications of ending the £2 national fare cap on passengers’ ability to access socially necessary local services, as proposed in the Bill. Assessing the impact of the withdrawal of the previous fare cap on specific routes would be pointless while the current cap is in place. At the spending review, the Government took the decision to extend that cap to March 2027. Moreover, in February 2025, the Department published an evaluation of the first 10 months of the £2 fare cap. That showed that the cap delivered low value for money. Work is already under way to undertake a review of the £3 bus fare cap. Therefore, a legislative requirement for further evaluative work is duplicative and unnecessary. That subsection is also impractical. Socially necessary local services are a new measure introduced by this Bill; they were, therefore, not in place at the time of the £2 bus fare cap and could not, therefore, have any measurable effect on it. It will also take some time for local transport authorities to identify socially necessary local services.
Clause 14(6) places a statutory duty on the Secretary of State to undertake an assessment of how the level of employee’s national insurance contributions may impact on the provision of socially necessary bus services. That includes an assessment of how transport services for children with special educational needs and disabilities are affected. That subsection cuts across existing work of the Department for Education, which has committed to reform the special educational needs and disabilities system. It is also impractical because it is seeking to review three months after Royal Assent. Socially necessary local services are likely to take some time to be identified and agreed, making that assessment premature. I have explained why the Government are seeking to remove both subsections. Having explained why the Government are seeking to remove subsections (5) and (6), I turn to the remainder of clause 14.
Clause 14 introduces requirements in relation to socially necessary local services in areas with enhanced partnerships. Enhanced partnerships are statutory partnerships where local transport authorities and bus operators agree on binding goals to improve bus services in their area. This measure will require local transport authorities to identify the services that they consider socially necessary local services as defined in the Bill, and include them as a list in the enhanced partnership plan. Enhanced partnership schemes will need to specify requirements that apply when the operator of a socially necessary local service proposes to cancel or vary the registration of a service in such a way as is likely to have a material adverse effect on the ability of passengers to access essential goods and services, economic opportunities or social activities. Schemes must also require local transport authorities to consider whether any alternative arrangements may be made to mitigate the effects of cancellation or variation.
This will not require additional funding. In practical terms, local transport authorities and bus operators will be incorporating the measure into their established processes. Once the legislation has passed, we will be working with stakeholders to implement the measure. Local transport authorities must vary their enhanced partnership plans and schemes to comply with clause 14 within one year of its coming into force. We will be publishing guidance in due course to help local transport authorities and bus operators with the implementation of the measure.
Luke Myer (Middlesbrough South and East Cleveland) (Lab)
I support clause 14 and the Government’s proposed measures. Good decisions depend on good information, and in the East Cleveland part of my constituency we have seen far too many decisions made in a black hole of information, which has seen many routes disappear over many years. I now have many villages left in isolation.
It has fallen to local campaigners to step up and make the case that such routes are socially necessary, including through protests, rallies and so on, to try to save them. That is exactly what happened in the case of the Stagecoach 1 and 2 in my constituency, which was created as a result of a sustained campaign. However, that route is not sufficient, because it misses out certain villages and does not go down the high street in Brotton, for example. It also misses out several residents, of which one example is a lady called Norma Templeman who I promised I would mention in the House. She lives in North Skelton and is 87 years old. She said a few months ago:
“You have no idea how isolated this makes us golden oldies feel.”
I would never use such language to refer to her, because I think she is full of energy, even if she is 87. It should not fall to an 87-year-old lady to campaign to save and extend routes like the Stagecoach 1 and 2, or the demand-responsive transport service that she benefits from, which, again, runs out of money every few months, and there has to be a sustained campaign to try to save it. The entire model is inefficient.
I hope that the mayor in our region will seek to use the powers in the Bill and introduce a franchising model. So far, he is resistant to do that, so I ask for some clarity from the Minister on devolution—which we covered in the previous debate—with reference to clause 14. The principles set out in the various pieces of legislation on combined authorities, particularly the Local Democracy, Economic Development and Construction Act 2009, set out that the role of a combined authority is to act as it says on the tin: to be a combination of the local constituent member councils and their leaders. We have an odd situation in Teesside wherein the councils and their leaders want to have a franchising system but the mayor is resistant to doing so.
In the House on 14 May, I asked a Minister from the Ministry of Housing, Communities and Local Government whether the Government accept the principle of subsidiarity, wherein power should sit in the lowest possible tier of government and local communities should have the strongest say. The Minister accepted that principle in his response. He said that devolution should not just be
“a shift of power from Whitehall and Westminster to a regional or sub-regional body that is far away from communities and the local authority.”—[Official Report, 14 May 2025; Vol. 767, c. 135WH.]
He said the transfer of power is a good, but it is not the “whole job”, and communities should be able to “take control for themselves”. I hope that that is also the case when it comes to these powers. We should not have a mayor sitting above the community—above even the local authorities, which make up the LTA—and not using the powers and the funding that this Government are giving him to act.
For Norma’s sake, and the many Normas in all my communities and communities across the country, I support the clause and the Bill.