Bus Services Bill [ Lords ] (Second sitting)

Andrew Jones Excerpts

Committee Debate: 2nd sitting : House of Commons
Tuesday 14th March 2017 Public Bill Committees

[The Chair]

I remind the Committee that with this we are discussing Government amendments 7, 17 and 18. I call the Minister to pick up where he left off in his reply to this morning’s debate.

[The Parliamentary Under-Secretary of State for Transport (Andrew Jones)]

If we had been paying more attention, at 24 minutes past 11 I would have said that we were done, that we had had a good debate on the issue and should now proceed to a vote. I think I have said all I need or wish to say on the issue. I hope I have answered colleagues’ questions about the principles of franchising and access to franchising, which will be a feature of our bus market. We have built in to the Bill safeguards of accountability and preparedness of local authorities, as well as protection for small and medium-sized companies.

[Lilian Greenwood (Nottingham South) (Lab)]

Will the Minister give way?

[Andrew Jones]

Yes, go on then.

[Lilian Greenwood]

The Minister is characteristically generous. During the break, I reflected on the points made by my hon. Friend the Member for Houghton and Sunderland South. The Minister has been clear that franchising should be one of the options available, particularly to mayoral authorities, in trying to deliver for passengers. He put passengers at the heart of the matter. Will he take this opportunity to condemn the language used by one of the major operators, who described local authority leaders who were trying to improve passenger services as “a bunch of unreconstructed Stalinists”? Does the Minister agree that that is unhelpful language when referring to local authorities that are seeking to do the best for their constituents?

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[Andrew Jones]

I do not know who said it, the context or to whom they said it. As a general principle, I suggest that constructive engagement and partnership is part of the way forward. People need to find their appropriate personal language that will help that to be achieved.

[Nic Dakin (Scunthorpe) (Lab)]

The Minister has been most generous in taking interventions. It is great to serve under your chairmanship, Mr Owen. Before he took the intervention from my hon. Friend, the Minister said that there is protection for small and medium-sized companies in the Bill. Will that cover companies such as Hornsby Travel, which has celebrated 100 years as a small family business doing excellent work in my constituency and the north Lincolnshire area, and is concerned about the impact of franchising on its capital, stock and drivers?

[Andrew Jones]

That protection would certainly encompass companies such as the hon. Gentleman describes. In many parts of the country there are excellent family-owned businesses that have been serving their communities for a long time with high-quality product and are much liked by their customers. I see them as having a significant role in the bus industry, whichever regulatory model is chosen by local authorities on a local basis. I most certainly do see that as part of the picture. That concludes everything I have to say on Government amendment 5.

Question put, That the amendment be made.

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[Graham Stringer (Blackley and Broughton) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Owen, for what I think is the first time.

I will speak briefly to amendment 19. Punctuality and reliability are extremely important, as my hon. Friend said, in persuading people to continue to use buses and attracting people back on to them. The problem is that on many occasions it is difficult to know why the bus does not turn up or is late. Bus companies blame congestion—which is, no doubt, part of the problem—for affecting their reliability and punctuality, and they ask for more privileged use of public sector road space via bus lanes. I do not completely accept that, because the last time I looked at hard statistics—I would be interested if the Minister had up-to-date statistics—I found that about a third of reliability problems were to do with bus companies not maintaining their vehicles properly, resulting in mechanical breakdowns, and another third were due to drivers not turning up and there being no reserve pool to deal with that. It is obviously in the commercial interests of bus companies, and perhaps, on many occasions, of bus passengers, to have bus lanes, and each case should be considered separately against agreed criteria, but we really need to know why things are going wrong.

This is a slightly historical case, but some years ago the FirstGroup buses in Rochdale were in such poor condition that the wheels fell off while they were going along. The traffic commissioner wrote a report about it and the company was fined. FirstGroup does not therefore have a great record. It is also the case, not just anecdotally —there is some evidence, and even more anecdotal evidence—that when buses are delayed for whichever of those three major reasons, they do not complete the route. They take shortcuts. It would be in the interests of public service if each bus had to carry a GPS, so that under the deregulated system, and more so under a franchised or an enhanced quality partnership, the taxpayers and the local transport authority could know where the buses were at any particular time. I would interested in hearing whether the Minister thinks that all buses being required to carry GPS, and have its information made public, would help our understanding of what is happening to bus services.

[Andrew Jones]

Amendments 19 and 20, tabled by the hon. Members for Cambridge, for Nottingham South and for Scunthorpe, propose that the Bill explicitly state that bus punctuality, journey speeds and the provision of w-fi are standards that an authority could specify as part of a franchise contract. Any authority that chooses to implement franchising will be free to determine which services run in an area and the standards of services, including those important matters. Authorities will have to consider as part of their assessment of the proposed franchising scheme whether the proposals represent value for money and are affordable, taking into account the costs of requiring those standards.

I think we all agree that the provision of wi-fi on buses is an extremely attractive prospect for customers. I entirely agree that where an authority wants to require the provision of wi-fi on services, it should be able to do so, and the Bill allows for that. In terms of bus punctuality and journey speeds, there is nothing in the Bill to prevent an authority from specifying the standards it expects from operators running services under franchise contracts.

I was asked about journey time guidance. We said to the Transport Committee that we would produce guidance on setting journey time targets. We intend to do that, though I recognise, as the hon. Member for Cambridge rightly said, that the guidance is not yet drafted.

The provision of customer information was at the heart of the contribution from the hon. Member for Blackley and Broughton. He is right; customers do not always have access to the level of information that is desirable to let them plan their journeys or be communicated with should there be a problem. The Bill includes clauses on open data, and making information available will hopefully create fantastic new products through which customers can receive that information. The open data powers in clause 18 are sufficiently broad to require real-time information for all buses to be provided. That requires GPS on the buses.

I would like customers outside London to have access to the information that is available to bus customers within London, but the amendments would make provision for something that is already provided for. This is about local decision making, rather than making things mandatory. I assure the hon. Member for Cambridge that the Bill already gives franchising authorities powers to set the standards he seeks, and I hope he will therefore withdraw the amendment.

[Daniel Zeichner]

I suspect we will rehearse some of our previous arguments about whether decisions should be made at the centre or locally. Earlier, we heard about the incredibly prescriptive approach that the Government are taking to allowing local authorities to franchise; now we are told that on this issue, the Government are quite happy to leave it to local authorities to make up their own minds. I suggest there are some inconsistencies here, exactly as we discussed in relation to driving up environmental standards.

The amendment is about ensuring we get the kind of connectivity, and particularly wi-fi connectivity, that we all agree the country needs. That is not just something we would like to have. Sadly, in the modern world, although we are enjoying ourselves as well, we are often working while we travel around. For Britain to prosper in the 21st century, we need connectivity. If we leave it down to local negotiations, the operators will almost inevitably say, “This is going to raise the cost by a little bit,” which will make it harder for the franchising authority to insist upon it. We can stop that happening by specifying the key things we believe are needed. Wi-fi is an essential part of people’s daily lives. The answer is not to leave this down to local negotiations but to insist upon it in the Bill. We will pursue this, not just because it is important for bus infrastructure but because it is part of creating the kind of digital Britain that we will need if we are to prosper in the years to come.

On the points made by my hon. Friend the Member for Blackley and Broughton, I am sure that he has been involved over many years in discussions with bus operators about where the burden of responsibility lies for punctuality. Of course, if we could solve that, we would probably have solved the entire problem with the Bill. It will always be a complex debate. The partnership arrangements are partly about trying to ensure that bus operators can run their services on time. I am in no doubt that bus operators want to do so. Whenever I meet the manager of my local bus company, he is absolutely clear that that is what he wants to do. The arguments, particularly in many of our precious historic cities such as my own, are about dedicated road space. Obviously, operators would love to have that, but there are other competing interests.

We think that punctuality and journey times are key. We think that they are so important to the future of the bus industry that specifying them, not just as an accidental by-product or consequence of schemes but as part of the agreement, is far more likely to concentrate minds locally on ensuring that they are achieved. Punctuality and reliability are key qualities that bus passengers look for. We all know from our own experience that if people cannot rely on the bus to get them somewhere, they will always turn back to their cars. The only way to have modern local transport systems that people use is if they are sure that the transport is reliable enough to get them there and that they will make their connection, so they are not late for work, school or college. Punctuality and journey times are not an added extra; they must be central to the process, which is why I will not withdraw my amendments.

Question put, That the amendment be made.

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[Andrew Jones]

We are discussing a group of amendments that relate to the assessment or the business case that authorities must prepare before they can implement franchising. The Government’s aim is to ensure that authorities fully consider the benefits, impacts and potential risks of franchising before taking the decision on whether to go forward and implement it in practice.

The Bill requires authorities to conduct an assessment of their proposed franchising scheme, which should include comparing it with one or more other courses of action. Amendment 34 aims to ensure that the different courses of action that should be considered as part of that assessment should reflect local conditions. I entirely agree that authorities should compare their franchising proposal against other realistic courses of action—that just seems good practice—and that those realistic courses of action will be different in each case. The Bill does not set out what other courses of action franchising should be compared against; it will be for local authorities to decide what is appropriate. The draft guidance that we are currently consulting on highlights that further by explaining that the authority should consider which courses of action are likely to meet their objectives. I hope, and I assure the hon. Member for Blackley and Broughton, that amendment 34 is not necessary; he may consider withdrawing it.

Amendment 35 proposes removing the requirement of the Secretary of State to issue guidance for authorities to assist with the preparation of their assessments, while amendment 36 proposes adding new requirements to the contents of such guidance. Our intention has always been to assist authorities in preparing robust assessments by providing guidance. The draft business case guidance is 10 pages long, which is much shorter than that for many other schemes or projects. It has actually been developed in discussion with authorities that may use it in future. It is about seeking to help authorities, particularly by reducing their risk of being challenged for not considering other realistic options, which could save time later on—particularly in any kind of legal matters.

I recognise the point about rail franchising, but I think that actually highlights the scale of the decision to go down a franchising route and how these things have to be considered and planned for carefully. On whether local government or national Government are infallible, the hon. Gentleman and I both know that neither is and can throw up a litany of records to demonstrate that. However, this is about having safeguards in place for decision-making criteria; it is not about national control. He highlighted Rail North, but Rail North is a partnership between the Department for Transport and Transport for the North to manage the north’s two rail franchises—Northern and TransPennine. Rail North was involved in designing the programmes and judging the tenders, and is now involved in managing the franchises; it is actually the first time we have moved to a more devolved management of our railways. The team, which is a joint team of the DFT and Rail North, is based in Leeds and will ultimately become part of Transport for the North. That is quite the opposite of the national control that the hon. Member for Blackley and Broughton highlighted—it is about devolution in rail for the first time. When we look at what has happened with rail in the north—the franchises will offer quite a transformation to services and be much more tuned in to their customers—we see the progress that is made by having more local decision making.

The guidance is intended to help authorities through the process and give them some national guidelines with criteria for consideration; we have no intention of making it onerous. This is more about sharing best practice and stopping reinvention when it comes to routes that are new to authorities. Our intention is to assist authorities in making robust assessments, and we are keen to receive views through the consultation about how the guidance can be further improved. I am pleased to be able to reassure hon. Members that our draft guidance recognises that it is for the Mayor or the authority to decide whether to proceed with franchising—it is not a national decision, and central Government should have no further involvement. I can also confirm that it is not our intention to place any unnecessary burdens on a franchising authority through the guidance.

Our approach is based on the standard approach to decision making in government set out in the Treasury’s Green Book. We actually drew the phrase “compelling case for change” from the Green Book. The assessment that a franchising authority is required to develop is based on the principles of the “five case” model for public sector business cases. The draft guidance on the development of that assessment therefore draws on the associated Treasury guidance material on using the five case model, which states:

“The business case in support of a new policy, new strategy, new programme or new project must evidence: That the intervention is supported by a compelling case for change”.

This is not a question of the Government seeking to impose burdens; we are seeking to assist and streamline decision making while keeping it local. That model is an established mechanism that any authority that has ever brought forward plans for a significant transport project should be well used to, and it seems entirely appropriate to follow a similar proven approach for fundamental change to the delivery of bus services, which of course will affect many thousands of passengers every day.

The hon. Member for Blackley and Broughton asked about the number of officials. I can tell him that there are absolutely no plans to increase the number of officials currently working on this area, except in one section: there will be a small increase in the open data team, because significant work is needed to deliver that project. To put that in context, the headcount of the Department overall has fallen by 17% since the 2010 spending review. I hope that, in the light of my comments, the hon. Gentleman feels able to withdraw his amendments, although I recognise that he may wish to press one of them to a vote.

[Graham Stringer]

I thank the Minister for his reply. I will withdraw amendments 34 and 35. I take what he says about amendment 34, although I think it really would enhance the Bill.

I will press amendment 36 to a vote. It would not add to the guidance but prescribe that “the Secretary of State should not go here”. The context of this debate is that bus companies are hostile to these proposals. It is likely that bus companies will end up in court—Nexus has recent experience of that under existing legislation—and it would be helpful to say that the guidance should not be over-burdensome. It would also be helpful—the Minister did not really reply to this point—to say that where schemes have been tried and failed, or bus companies have refused to try them, they will not be reconsidered in some future scheme. I take the Minister’s reassurance that the final decision will be made by the Mayor or the authority. In the light of that, I will press amendment 36, but I beg to ask leave to withdraw amendment 34.

Amendment, by leave, withdrawn.

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[Andrew Jones]

Amendments 21, 25 and 29, tabled by the hon. Members for Cambridge, for Nottingham South and for Scunthorpe, propose to specify the terms and conditions for employees that an authority should include as part of the franchise contracts it enters into with bus operators. It would not be consistent with the rest of the Bill to mandate the basis upon which contracts are procured by local transport authorities or the content of those contracts, as the amendments propose.

The amendments would require local authorities to set out in their contracts that employees hired by the bus operator outside of the TUPE transfer of staff would receive terms and conditions no less favourable than those provided to staff transferred under TUPE. I fully understand the intent behind the amendments. The power to achieve the outcome sought already rests, however, with the franchising authority letting the contracts

The amendments also pose some real practical difficulties. First, employees transferring under TUPE will not all have the same terms and conditions. Some may have been in post for a short period, and others may have been in post longer. There may be different terms and conditions for newer staff. It is not entirely clear which set of terms and conditions the amendments refer to, and I therefore see some difficulties in implementation. In addition, the amendments could place a financial burden on operators and, through them, the local transport authority by requiring them to employ people at something other than the market rate. That could prevent authorities from pursuing franchising schemes.

It is worth noting that the employee protection rights in the Bill replicate those in the Transport Act 2000 for quality contract schemes, introduced by the Labour party. There has been no intention at any point to water down TUPE arrangements. In fact, those were one of the first things we considered when preparing the Bill, and we were committed to ensuring that they were in place right away. I am committed to ensuring that staff affected by franchising are protected. However, I am not sure that it is the job of the Bill to set out the terms and conditions of employment offered to new staff who may join the industry at some point in the future.

On amendment 26, which relates to potential dismissals, I have sympathy with the intention behind the first two subsections concerning redundancies that may be made before or after the introduction of a local service contract. However, employment law already deals with the issue of unfair dismissal of employees. It is simply not appropriate for the Bill to be a vehicle to address such issues, and the Labour party did not include that provision when drafting the existing quality contract scheme legislation. The scenario that the amendment addresses is an unlikely one. I find it hard to imagine that an employer will choose to bear the redundancy costs associated with dismissing an employee if it is able to transfer them to a new operator under TUPE instead.

The hon. Member for Cambridge asked for my opinion on a minimum national salary for bus drivers. That is an interesting idea, but it would very intrusive for a Government to intervene and say that a company has to pay its employees a particular rate. We have done that through the national living wage, to protect some of the more vulnerable workers in our society, but it gets very intrusive indeed into the relationship between a company and its employees if the Government start to direct national minimum wages. It is not the Government’s belief that we should go down that route. I suggest caution would be required in doing so.

I hope that everything I have said confirms the Government’s position and that the hon. Member for Cambridge will feel able to withdraw the amendments.

[Daniel Zeichner]

I appreciate the Minister’s comments about not seeking to water down the previous arrangements, which we accept. Our worry is that these things have never been tested, and we all now expect this situation to occur very quickly in the near future.

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[Daniel Zeichner]

I beg to move amendment 23, in clause 4, page 20, line 11, leave out “six months” and insert “112 days.”

This amendment states that a scheme may not specify a period of less than 112 days for its start date following the notice that the local service contract has been awarded by the franchising authority.

You will be pleased to hear that this is a briefer introductory speech, Mr Owen. Proposed new section 123H(4) of the Transport Act 2000 states that

“A scheme may not specify…a period of less than six months”

for its start date following a notice that the local service contract has been awarded by the franchising authority.

The draft regulations—pages 77 and 78 relate to the deregistration of local services by operators—state that franchising authorities will have the ability to set a notice period of up to 112 days for operators wishing to deregister their services following the publication of a franchising scheme. Our concern is about the gap between the two periods. For 68 days of a six-month period, there is the potential for services to be deregistered, which we believe will cause unnecessary disruption and uncertainty for passengers. It is more of a point of clarification for the Minister. Will he consider revising the period as per our amendment, and if not why not? What advice and guidance would he be able to offer to passengers, franchising authorities and operators?

[Andrew Jones]

Amendment 23 proposes to reduce the time that must elapse between a franchise contract being awarded and it coming into force. This part of the Bill was designed with transition in mind to ensure that operators—those that are incumbent and those that would be incoming, having won the franchise contract—have sufficient time to put any necessary plans into place to deal with either of the two circumstances. Our overall aim is to ensure that all parties are ready to respond in the interests of passengers. I am concerned that reducing the time period to a minimum of 112 days —less than four months—could lead to a hurried transition, which would not necessarily benefit passengers. I recognise that there may be concerns about the behaviour of operators during that transitional period.

The Bill and any associated secondary legislation on which we are currently consulting sets out a number of ways in which authorities can help protect passengers during transition, and measures in the Bill directly address that, including enabling the authority to vary the deregistration and variation notice period that operators must observe before cancelling or changing services, and allowing services to be registered at short notice when they are replacing a service that has ceased to operate. This is about ensuring continuity of provision of service for customers. I recognise the point made by many colleagues in the Committee that people rely on services. This is about ensuring continuity during a transitional period. The Bill strikes the right balance in achieving that, and I therefore hope that the hon. Member for Cambridge feels able to withdraw his amendment.

[Daniel Zeichner]

I thank the Minister for his explanation. I am not sure I am wholly reassured. In some ways, we are moving into unchartered territory, which is why it is important we get this right.

If everybody was working with good intentions—it is almost like I am discussing other things—there would be no problem, but these transitions may not always be entirely as amicable as one might wish. Our concern is that in those circumstances, passengers could be the innocent bystanders stuck at the bus stop and be put at risk, because authorities may not always be able to make this possible if they do not have the resources and access to vehicles, depots and all the rest of it in the meantime.

I hope the Minister and his Department will talk to those who face this very real prospect and ensure that we make it work successfully for everyone involved. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Andrew Jones]

I beg to move amendment 10, in clause 4, page 24, line 41, leave out “21” and insert—

“(Bus companies: limitation of powers of authorities in England)”.

This amendment is consequential on amendment NC1.

[The Chair]

With this it will be convenient to discuss Government new clause 1—Bus companies: limitation of powers of authorities in England—

‘(1) A relevant authority may not, in exercise of any of its powers, form a company for the purpose of providing a local service.

(2) Subsection (1) applies whether the relevant authority is acting alone or with any other person.

(3) In this section—

“company” has the same meaning as in the Companies Acts (see sections 1(1) and 2(1) of the Companies Act 2006);

“form a company” is to be construed in accordance with section 7 of the Companies Act 2006;

“local service” has the same meaning as in the Transport Act 1985 (see section 2 of that Act);

“Passenger Transport Executive”, in relation to an integrated transport area in England or a combined authority area, means the body which is the Executive in relation to that area for the purposes of Part 2 of the Transport Act 1968;

“relevant authority” means—

(a) a county council in England;

(b) a district council in England;

(c) a combined authority established under section 103 of the Local Democracy, Economic Development and Construction Act 2009;

(d) an Integrated Transport Authority for an integrated transport area in England;

(e) a Passenger Transport Executive for—

(i) an integrated transport area in England, or

(ii) a combined authority area.’

This amendment prohibits county and district councils in England, combined and integrated authorities in England and passenger transport executives in England from setting up companies to provide local services.

[Andrew Jones]

New clause 1, which was tabled by the Government, reinstates the original provision of the Bill, which prohibited authorities from establishing companies for the purposes of operating local bus services. Amendments were made in the other place to remove that provision, which forms a key part of our proposals, from the Bill.

The Bill provides a number of new tools for local authorities to improve their local bus services, and it is important that operators and authorities work together to improve services for the benefit of passengers. We want to ensure that passengers benefit from the strengths of both local authority influence over services and the private sector. We have seen great improvements in services across the country due to private sector innovation and investment. It is also true to say that authorities have a lot to offer, with many around the country working collaboratively with their local operators to ensure that communities are well served and that services and ticketing offers are joined up.

The franchising and enhanced partnership tools in the Bill will provide authorities with more influence over bus services than they currently have. Striking the right balance between local authority influence and the role that private sector bus operators can play is important. Our view is that passengers will see the most benefit where the commissioning and provision of bus services are kept separate. That purchaser-provider split is a frequent feature of our public services, and as such we do not think authorities should be able to set up new bus companies.

[Graham Stringer]

I understand the Minister’s argument, but does he not see the case for transport authorities having the power to set up a bus company as a last resort, where private sector companies withdraw from the area?

[Andrew Jones]

The franchising provisions in the Bill detail what powers an authority has should a franchise service fail, as a stopgap measure, to ensure the continuity of service provision for passengers. I recognise the hon. Gentleman’s point about continuity of service, but we are addressing that in the Bill.

[Graham Stringer]

To press the Minister on that, I take the point about continuity of service where, for instance, a bus company goes bankrupt and can no longer provide a service. However, that was not the question I asked. In circumstances where bus companies withdraw from an area as a point of policy because they are completely hostile to the idea of franchising, should transport authorities not be allowed to set up bus companies?

[Andrew Jones]

I suggest that the answer is no. If an area has a service withdrawn simply because of some kind of principled objection by a bus company to a regulatory model, those would be very unusual circumstances, with the company turning down business. In that case, others would, I suggest, snap it up.

[Lilian Greenwood]

If only the situation were as unlikely as the Minister suggests. I invited him earlier to express a view on the remarks made by the chairman of Stagecoach. I will continue his remarks about “unreconstructed Stalinists”. He went on to say:

“The first contract that they put out on my business I’m out of Tyne & Wear completely, and they can buy 500 buses and find four bus depots.”

Is the Minister not saying precisely that Tyne and Wear could not do that? Therefore, it would be subject to the whim of a large private sector operator that knows that it has local authorities over a barrel when it is the large incoming operator.

[Andrew Jones]

The hon. Lady has been drawing on a very interesting set of quotes. The chairman of Stagecoach was obviously having a very lively day and making some lavish comments. If he wished to withdraw from the marketplace, I am sure there would be plenty of competitors saying, “Thanks very much, Brian, we will snap up that little operation.” I still do not think that changes the position. If people withdraw from a marketplace, I would expect others to pile in. That is what the nature of competition should be about.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

I am grateful to my hon. Friend the Member for Nottingham South for raising the outrageous behaviour of Stagecoach over the years in the north-east. Is it not the case in the rail industry that the Government have sometimes had to step in? It has been necessary to ensure that that safeguard is in place. Were an operator to follow through on such threats—who knows whether it was a mere threat or had any intent behind it?—there should be safeguards and protection for the travelling public.

[Andrew Jones]

That is a very interesting point from the hon. Lady. Yes, we do have the opportunity in the rail sector for directly operated railways but that is for a short, interim period. That is what happened with the East Coast franchise, which serves both of our constituencies. We have such a provision in proposed new section 123O in clause 4, which allows for an interim stopgap measure.

Stagecoach obviously has a lot of experience in the world of franchises. It is engaged in the rail sector and operates in London. If the opportunity arises in the north-east—it may or may not choose to go down that route—let us see what the company says. Stagecoach has plenty of experience of franchising, should it wish to bring it to bear.

We have had some talk about the merits of the innovation and investment from private sector operators. I highlight the fact that many existing municipal bus companies, such as Reading Buses and Nottingham City Transport, deliver a high standard of service, and I would expect them to continue doing so. Their ability to do that is not affected by this provision. I remind the Committee that those operators have prospered in a competitive market in which many other municipal bus companies have struggled. Only last month, Thamesdown Transport in Swindon was sold to the private sector after what I understand was a prolonged period of losses.

I have seen the good work done by municipal bus companies. They regularly do extremely well in customer feedback. Our intention is to leave them well alone, doing the very good job that they do, but to make the balance right between public and private, which I think the Bill achieves.

[Huw Merriman (Bexhill and Battle) (Con)]

I recognise that my point is slightly off kilter with the thrust of the Bill. Brighton & Hove bus company is a superb private operator that has taken over the Swindon municipal service the Minister mentioned, and it intends to invest. In my desire to see private as the first option, would there be scope in the Bill to start with a partnership approach but, if that did not work, to cascade down to franchising? I believe the Cornish model shows that the sword of Damocles makes bus companies see sense. If there is to be an absolute fall-back, municipals could well be that fall-back.

[Andrew Jones]

I have no doubt that municipal bus companies have been delivering for their customers. If they had not been doing so, they would have gone out of business. We can also see the customer response to them in various surveys and the national bus awards.

My hon. Friend’s proposal is interesting, but we have provided for cover in the Bill. We have anticipated the situation in the read-across from the rail sector, where interim services—replacement services—are required. It would be within the powers of the franchising authority to commission services.

[Huw Merriman]

To clarify, am I correct in saying that the Government or state takeover scenarios are just for franchising and not for partnerships? If so, there is still a gap. If franchising is not applicable because of the type of authority, only partnerships are available, and it cannot go to municipal because there is a prohibition.

[Andrew Jones]

We have no intention of having authorities setting up bus companies and awarding themselves contracts. The purchaser-provider split is important. Authorities would have the capacity to intervene and directly commission services, but it would be for a short period of time only. They have the capacity to do that already. Our intention is not to have a municipal bus company do that. It would be for a short period of time and authorities would commission from the private sector.

[Chris Green (Bolton West) (Con)]

With people interested in franchising in Greater Manchester, there is an expectation that there will be a number of different providers of bus services. If any one provider failed, other providers could step in, whether they were already in Manchester or were other ones coming in. There would not be the need for Greater Manchester as an authority to be running the bus services.

[Andrew Jones]

My hon. Friend makes an interesting point. I anticipate from my conversations with Transport for Greater Manchester that it will be keen to pursue a franchising model. This will be its call, but I would anticipate not a one-size-fits-all model, but different operators providing services in different parts of his area. If one failed, others could come in. I have certainly been contacted by bus companies that see franchising tenders as a way to enter the UK marketplace. It could prove to be a spur to competition. We have powers in the Bill should there be failure, but those should involve private companies under commission, rather than municipal companies.

Amendment 10 relates to new clause 1. It concerns a cross-reference in the Bill and nothing more.

[Lilian Greenwood]

It is a pleasure to serve under your chairmanship, Mr Owen. I oppose new clause 1, as I am sure the Minister anticipated. I thank him for his recognition of the success of some of the existing municipal operators. Mr Owen, I hope you will indulge me if I explain why this is so important. I represent a constituency with a very successful municipal operator. I do not think the Committee will mind if I remind it that Nottingham City Transport, which is one of the most successful municipal operators in the country, is the only operator to win the UK bus operator of the year title four times. It also won the Route One large operator of the year award in 2016 and the award for customer focus at the European Business Awards in 2015; it had the top national bus driver in 2014 and won the Guide Dogs Award for breaking down barriers in 2014. I could go on, Mr Owen—there are many ways in which it is an exemplary bus operator. As I said on Second Reading, these things are not just being stated by me because I am the local MP—they are backed up by evidence.

When we look at the most recent national bus passenger survey, for 2015, we find that Nottingham City Transport is No. 1 one out of 50 operators for overall satisfaction, with 97% satisfaction. When we look at value for money, it is not No. 1, but it is No. 4 out of 50 operators, with 74% satisfied with its value for money, which is pretty good. On satisfaction with punctuality, again it is No. 1 with 85%, and it is joint second on satisfaction with bus journey times. There is no doubt that it is a really good example of what a good operator should be doing, and not just on those issues that are covered in the passenger survey.

I know we are going to discuss accessibility during the passage of the Bill. The percentage of accessible buses run by Nottingham City Transport’s 330 buses—it is quite a large operation—is 100%. In the other place the provision of audio-visual announcements on buses was raised. Many operators have suggested that it is too costly, but 80% of Nottingham City Transport’s buses already have audio announcement. As has been acknowledged, 100% have free wi-fi. On many levels, that shows what a bus company can do. I found it quite difficult to understand the Minister’s submission, as he acknowledged the value of municipals such as Nottingham City Transport and others—Reading Buses has also been a recent winner of bus operator of the year—which is okay, but why not allow that possibility in other areas?

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[Daniel Zeichner]

Indeed, that point is well made. It has been possible to take back control in that case, and it is working to the benefit of passengers in that area. It seems extraordinary that we should want to close down the options when all the evidence points to the fact that, when transport systems are integrated, it is possible to get a better outcome for everybody.

I am not sure I am allowed to mention European law anymore, but it may be worth noting that, in EU regulation 1370/2007—I am sure Members know it off by heart— article 5.2 allows that:

“any competent local authority, whether or not it is an individual authority or a group of authorities providing integrated public passenger transport services, may decide to provide public passenger transport services itself or to award public service contracts directly to a legally distinct entity over which the competent local authority, or in the case of a group of authorities at least one competent local authority, exercises control similar to that exercised over its own departments.”

In Europe, local authorities are able to award contracts directly to their own company. We simply want new municipals to be able to compete in the process.

As I come to my conclusion I shall quote a further authority. Regarding municipal bus companies, the Institute of Public Policy Research said that

“authorities need to encourage and support the many innovative transport solutions–—such as social enterprises and municipal companies—that have emerged over the years.”

It added that:

“the continued strength of some municipally owned transport schemes…demonstrate that conventional commercial operations are not the only option…Choosing to operate a business without the pressure to deliver profit to shareholders can allow social values to be put at the heart of that business’s activities and deliver considerable benefits for communities.”

Our final problem with the proposal, as touched on by my hon. Friends, is that it seems as if the Department is working without any evidence. I have asked a number of written questions about the plans, and it has been revealed that

“no analysis has been undertaken by the Department for Transport to understand the potential benefits”

of the municipal model for passengers. I was later told that there are no plans to undertake any analysis of those benefits. I asked what evidential basis there is that the commissioning and provision of bus services should be kept separate, and was told:

“Supporting evidence of direct relevance is not available”.

Furthermore, I was told that a ban on municipals was not included in the bus reform workshop discussions because the provisions

“had not yet been drafted when the workshops took place.”

I simply do not understand why the Government persist with this divisive and mean measure when they have absolutely no evidence to back it up. In our view, this is a piece of symbolic, ideological dogma that has no place in an otherwise positive, enabling Bill that is broadly underpinned by consensus. We have every intention of revisiting this issue on Report.

[Andrew Jones]

I covered much of the ground in my earlier comments. I do not view this matter as the cause célèbre of the Bill, because frankly not a single local authority has contacted me to say that it wishes to start a municipal bus company. I do not think that this is at the heart of the Bill at all. Why do we have it? We have it simply because of the points I mentioned earlier—that commissioning and provision separation could easily deter investment from the private sector should this be reversed. What we have sought to do in the Bill is find the right balance and retain the strengths of private bus companies and the involvement from the public sector to find that proper partnership where we most effectively see the industry making progress for customers.

[Lilian Greenwood]

I am mindful of the point my hon. Friend the Member for Cambridge made about evidence. When the Minister says that the existence of municipal bus services or an intention to set up a municipal bus service would prevent investment from the private sector, what evidence is he drawing on? My city has a very successful municipal operator, but that does not prevent investment in the private sector. In fact, we have an extremely effective local private operator and, if anything, the competition with the high-quality municipal has driven up its investment in its services. I therefore ask the Minister to set out what evidence he is drawing on in making those remarks.

[Andrew Jones]

What I said was that it could deter investment. We are talking about projections into the future, and as the future has not yet happened, of course we do not have any evidence for it. I am just looking at what the risks may be.

What we seek to do in the Bill as a whole is to enable bus companies and authorities to work more constructively together on behalf of passengers to deliver better services. I think we have struck the right balance. There is no doubt at all that the municipal companies are, indeed, successful, but we have chosen to highlight a couple that have perhaps been at the high end of success—the Nottingham and Reading companies have quite reasonably had a lot of mentions today. The last company that I visited was the bus company in Reading, and I thought it a very successful and impressive operation, but within a few days of that visit we saw the Thamesdown service sold after many years of making a loss. The idea that it is only municipals that are successful and innovative is not true. Success has come from having the right balance, and that is exactly what we are achieving in the Bill.

On international comparators, I am not an expert on the bus markets of different countries, but I am aware that the successful transformation of our rail services, which was mentioned earlier, has led to ours being the fastest-growing railway in Europe.

Amendment 10 agreed to.

[Daniel Zeichner]

I beg to move amendment 24, in clause 4, page 32, line 47, at end insert—

“123Y Compensation liability

Where a bus operator brings a successful legal challenge for compensation against a relevant franchising authority, central government shall be liable for any financial penalty imposed by the court on the franchising authority.”

This amendment specifies that central Government shall bear the financial risk of legal challenges brought against franchising authorities by bus operators.

The amendment would ensure that central Government bear the risk for financial penalties where a bus operator brings a successful legal challenge for compensation against a relevant franchising authority. We want to protect local franchising authorities from legal action by operators and ensure that they are not prevented from bringing forward good schemes for fear of potential risk.

We heard reference in earlier debates to the attempt in the north-east—many of us would say the heroic attempt—to achieve a quality contract and how difficult that proved to be. When Nexus, the North East combined authority’s transport arm, attempted to introduce a quality contract scheme for Tyne and Wear under existing legislation, the legal decision made by the quality contract scheme board suggested that local authorities could be liable to compensate bus operators for financial losses they might incur as a result of bus re-regulation. The board concluded:

“Legislation enabling franchising should specifically address the issue of proportionality of financial loss of bus operators. It may be that some form of compensation is considered appropriate.”

It went on to suggest that local authorities could have been liable for payments of between £85 million and £226 million if the scheme had gone ahead. At that time, many of us were astonished by that conclusion, but despite the absurdity of it, that was what the board said. It causes real concern for people who may be thinking of bringing forward what I think we all agree could be the kind of schemes that will really improve bus services in our country.

I asked the Minister what assessment his Department had made of the reference in the quality contract scheme board’s report to bus operators being compensated by the Government for future losses that might be incurred as a result of franchising. The Minister responded that the decision related to existing legislation and was unrelated to the Bill. I do not think that that is good enough. It is important that we protect local authorities from that risk. It is not the case that this situation has not been rehearsed—it is out there.

If we believe that franchising will produce better services for passengers, we cannot have a situation in which authorities are worried about bringing schemes forward because they are intimidated by the financial risk. The Government might feel that that is not relevant, in which case they can demonstrate their confidence in the new system by making it clear that the risk does not lie with the local authority.

Some share the view that was expressed by the board in the Nexus case. The Confederation of Passenger Transport has, indeed, said that bus franchising

“would unquestionably amount to indirect expropriation”,

and that the Bill is “anti-enterprise” and

“silent on the issue of compensation.”

I and many others obviously do not agree. As I have said, franchising moves competition from on the road to off the road, with the system of bidding for service contracts.

More than that, any industry that receives almost 50% of its revenue from the public purse cannot be surprised that the public seek a say in how the services they fund are run. The Transport Committee found:

“We accept that the question of whether incumbent operators would suffer a loss from franchising is a complex one. However, franchising does not mean operators already providing bus services in the market cannot compete; it simply means that they must compete for the market rather than for passengers as they do at present. There is no case for compensation for operators in areas where the local transport authority decides to introduce franchising.”

The Opposition need clarity on this issue, because we fear that if the Government do not provide it, good schemes might not be introduced.

[Andrew Jones]

Amendment 24, which was tabled by the hon. Members for Cambridge, for Nottingham South and for Scunthorpe, proposes that central Government assume liability for compensation payable as a result of a successful claim against an authority that has implemented franchising. The Bill is about devolution. It gives authorities the ability to decide which model of bus service provision works best for local passengers. It makes it clear that the decision to implement franchising lies with the Mayor or the authority in question and not with central Government

Local accountability is at the very heart of the Bill. Any Mayor or authority that is not able to stand by and take responsibility for their decision should not implement franchising in the first place. Looking to central Government to solve local problems would undermine the accountability required to make a success of franchising in the longer term. Frankly, it would be out of step with the rest of the Bill for central Government to step in and assume responsibility for a local decision in which they have played absolutely no part. The proposal is very strange, and would mean a complete break between accountability and responsibility.

[Bridget Phillipson]

The Minister will recall that during the process that led to the quality contract scheme decision in Tyne and Wear, the issue was, in part, where responsibility would lie were there to be a legal challenge, not on the grounds of the scheme itself or in respect of whether any compensation would be owed, but concerning where responsibility for the legislation itself would lie. This is Government legislation, so would it not be for the Government to defend, if challenged, its principle and to take on any liabilities that arose from that?

[Andrew Jones]

In developing the legislation, we have taken into account the views in the quality contract board’s comment on compensation. We are confident that the processes in the Bill are fair and give operators sufficient notice to enable them to plan accordingly. I therefore do not think that what the hon. Lady says will apply, but we have clearly been learning from the problems that the north-east, more than any other area, experienced in the quality contract scheme.

[Huw Merriman]

The Transport Committee spoke to authorities that might consider franchising about the risks they would have to bear. Surely this is one. If they decide that it is not a risk worth taking, they will not utilise the power. It is not just a question of asking for a central Government bail-out, but a question of asking for a bail-out from my local taxpayers, who will not have the benefits of franchising. I find the proposal outrageous.

[Andrew Jones]

It is a strange idea to put forward that central Government should be liable for decisions taken in a local council or by an elected Mayor. That break between accountability and responsibility could only lead to bad practice. Any legal challenge by operators against an authority is likely to be based on the way in which the authority has approached the decision-making process. Central Government are not seeking to control that, and we should not be responsible for it. I therefore ask the hon. Member for Cambridge to withdraw the amendment.

[Daniel Zeichner]

I note that the hon. Member for Bexhill and Battle is outraged by the suggestion, but the crux of the point was made by my hon. Friend the Member for Houghton and Sunderland South and it is an important point. It is clear that some in the industry see the concept as an act of expropriation—that is what the industry body has said. The Government are proposing the legislation and we support them, but the danger, as I have said, is that if local authorities fear that they will be subject to the full force of legal challenge, people might be unable to use this good legislation. We will be back to a situation of spending many years talking about doing absolutely nothing, as the hon. Member for Bexhill and Battle said.

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[Daniel Zeichner]

I shall speak to amendments 37 to 39. Amendment 37 would allow the franchising authority at an early stage to obtain pensions information from operators so that it can begin to understand the potential scale and impact in relation to historic and future pension liabilities. Currently, proposed new section 143A(3)(e) says:

“Information about persons employed by the operator in the provision of those local services”.

As such, it is not clear whether pensions information would be included. Will the Minister clarify whether the Bill will enable franchising authorities at an early stage to obtain information about pensions and the pension schemes of individuals employed by the operator? Does he agree that the amendment enhances the provisions by ensuring that franchising authorities have access to this relevant information in preparing their assessments?

Amendment 38 would enhance the Bill, better reflecting draft regulations and guidance. The statutory guidance includes a new obligation for authorities to consider journey speeds and reliability when developing an assessment. In order for authorities to be able to satisfy this additional obligation, an amendment to the Bill will be required so that authorities can request the data from incumbent bus operators. A large amount of the information is held only by operators and is not currently available to authorities. Currently, journey speeds and reliability are not provided for in the list of information that authorities may request from bus operators, meaning that authorities are unable to satisfy this additional consideration. Does the Minister agree that including the measure in the Bill will ensure that the Bill and the accompanying guidance are better aligned?

Amendment 39 reflects the fact that “a reasonable period” is not currently defined. Obtaining the information from operators set out at proposed new section 143A is vital to inform the franchising authority’s assessment. Any delay in providing that information will have a significant impact on the timetable for audit, public consultation and the Mayor’s decision. Does the Minister agree that 56 days is a reasonable period? If not, how does he define “a reasonable period” and will he make that definition clear in the accompanying guidance?

[Andrew Jones]

This group of amendments relates to the information authorities can request from bus operators in connection with their franchising functions. Amendment 33 would require bus operators to provide information to authorities about the services they operate under existing franchises and outside the franchised area. The purpose of clause 5 is to ensure that authorities have the information they need about the services in their area so that they can make an informed decision. I therefore struggle to see the rationale behind requiring them to provide information about services that are unconnected to the scheme they are developing or their area.

[Graham Stringer]

Business case guidance, as I said, specifically requires the franchising authority to consider the impacts of franchising on neighbouring authorities and services and transport in their areas. Surely that is a reason why the bus companies should hand over information about what they are doing in those areas.

[Andrew Jones]

The hon. Gentleman is talking about considering developing schemes and the impact on bus provision in neighbouring areas. It does not necessarily suggest that entirely unconnected areas need to have information about franchises beyond the area directly under consideration. I understand where he is coming from, but the information described in the amendment would not be material to an authority’s assessment. I am not convinced that there is any need for the authority to have access to it. I hope he considers withdrawing the amendment.

Amendments 37 and 37, tabled by the hon. Member for Stalybridge and Hyde (Jonathan Reynolds), propose to add new categories to the list of information that can be requested by an authority—in particular information about an operator’s pension schemes, and about journey speeds and reliability. Clause 5 already allows authorities to request information about people employed by operators. That will include information about their pension arrangements. That is clearly a material consideration and will be included. I am not convinced therefore that amendment 37 is necessary.

I agree that an authority may want to consider information about journey speeds and reliability when conducting its assessment, particularly to understand where there are congestion hotspots. Having said that, I would like to think that any authority with the skills and abilities necessary to implement a franchising model already has a clear view of where congestion problems are in its network. There are other ways that the authority could access that sort of data without placing burdens on operators, such as through existing punctuality and timetable information and roadside monitoring equipment.

We are currently consulting on draft regulations under the clause that set out further categories of information that can be requested by authorities. If a clear case is made through our consultation that journey speed information would be a valuable addition to that secondary legislation, we will certainly be happy to consider it, but I am not convinced today that we should place it on the face of the Bill. I hope I have provided the hon. Member for Cambridge with reassurance that the issue will be addressed and that he will therefore not press amendments 37 and 38 to a vote.

Amendment 39 would require operators to provide the requested information within 56 days rather than at the end of a reasonable period that the authority may specify. We want to ensure that we leave as much flexibility as possible to allow authorities to work with operators on a local level. In some cases, the information requested will be very limited and could be provided in a shorter timescale. We also have to consider the full range of possibilities and give due consideration to smaller operators, which may have more difficulty collating and sharing information when their limited resources are focused on doing the day job and running their existing services.

The Bill will allow authorities to take local circumstances into account and set realistic and appropriate timescales for delivery, without an arbitrary cap. If an operator fails to take all reasonable steps to respond to a request, the Bill requires the franchising authority to report it to the traffic commissioner, who then has the ability to impose sanctions on operators that contravene that requirement, provided that the commissioner agrees with the authority that the operator has not taken all reasonable steps to respond. Given that flexible approach, which I believe will work well in practice, I ask the hon. Member for Cambridge to withdraw amendment 39.

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Question proposed, That the clause stand part of the Bill.

[Andrew Jones]

The clause introduces new provisions for advanced ticketing schemes in England, which improve the existing ticketing powers in the Transport Act 2000 in a number of ways. First, the clause future-proofs the legislation by ensuring that new or future developments in technology can be accommodated within its framework. Secondly, the clause contains new duties for local authorities to consider linkages and compatibility with other multi-operator ticketing schemes. I must emphasise, however, that this is not about price. There is no ability for ticket schemes to set ticket pricing. An advanced ticketing scheme may only be made by local transport authorities in England. The existing ticketing scheme provisions will continue to apply in Wales and to schemes made by an English authority in conjunction with a Welsh one. This part of the Bill has been widely welcomed in our discussions and has not proved at all controversial.

Question put and agreed to.

Clause 7 accordingly ordered to stand part of the Bill.

Clause 8 ordered to stand part of the Bill.

Schedule 3 agreed to.

Clause 9

Enhanced partnership plans and schemes

Amendment made: 11, in clause 9, page 42, leave out lines 15 to 20.—(Andrew Jones.)

This amendment removes a requirement that, under an enhanced partnership scheme, new buses providing local services must meet eligibility requirements contained in the “Low Emission Bus Scheme” (a programme of grants to support the use of low and ultra-low emission vehicles), where the vehicle comes into service after 1 April 2019.

Question proposed, That the clause, as amended, stand part of the Bill.

[Andrew Jones]

The clause will introduce enhanced partnerships in England. They go further than the advanced quality partnership schemes provided for in clause 1, which we discussed this morning. In particular, enhanced partnerships may include a broader range of requirements. They are designed to be easier to apply to a wider geographical area, and provide for the involvement of operators from the outset. They do not require every single objection from operators to be resolved.

The clause provides for enhanced partnership plans and enhanced partnership schemes. The plan provides the context for the partnership and sets out the bus improvement objectives, which are relevant to all parties. Detailed actions to be taken by the authority and bus operators on the ground locally are set out in the associated scheme or schemes. Both the plan and schemes are made by the local transport authority but are developed in partnership with any relevant operators that wish to participate. To ensure that operators remain involved and supportive, the authority can proceed at certain key points only if it has sufficient support for its plans from the relevant operators. The mechanism by which that will be judged will be set out in secondary legislation, on which we are currently consulting.

Under an enhanced partnership, competition remains generally on the road, and services continue to be provided on a commercial basis. All operators in the scheme area, whether a new entrant or an incumbent, must comply with any of the requirements set out by the scheme. Those requirements fall into two broad categories. Operational requirements can include vehicle standards—including emissions standards, as we discussed this morning—branding, payment methods, ticketing structures, the price of multi-operator tickets and information to be provided to passengers. Route requirements address the frequency and timing of particular services.

There is a menu of options so that authorities can work with operators and passenger representatives, among others, to find the best solutions for their area. That is the essence of an enhanced partnership. It is a flexible set of powers that can be adapted to local circumstances. The provisions have been welcomed by passenger groups, bus operators and local transport authorities. I think that these provisions are at the heart of the Bill.

Question put and agreed to.

Clause 9, as amended, accordingly ordered to stand part of the Bill.

Clauses 10 to 13 ordered to stand part of the Bill.

Clause 14

Traffic commissioner functions

[Daniel Zeichner (Cambridge) (Lab)]

I beg to move amendment 30, in clause 14, page 69, line 22, at end insert—

“(5) After section 6I insert—

‘6J Community bus routes

(1) Traffic Commissioners must keep a list of bus routes in their area which are of community value.

(2) For the purpose of this section, a bus route of community value is one that has been designated by the traffic commissioner as furthering the social well-being or social interests of the local community.

(3) Bus routes may only be designated by a traffic commissioner as being of community value in response to a community nomination.

(4) A community nomination must be made by a community group which is based in, or has a strong connection with, an area through which the bus route passes, and on which community the bus route has a direct social impact.

(5) A community group may be, for example—

(a) a local or parish council;

(b) a voluntary or community body with a local connection;

(c) a bus user group;

(d) a group formed for the specific purpose of maintaining the bus route;

(e) a church or other religious group, or

(f) a parent teacher group associated with a particular school or schools.

(6) The traffic commissioner must consider the community nomination, and if—

(a) the nomination is successful, the commissioner must notify the relevant parties of this decision in writing; or

(b) the nomination is unsuccessful, the commissioner must notify the relevant parties of this decision in writing and give reasons why the decision was made.

(7) An operator of a bus route which is designated as being of community value must give a minimum of six months’ notice of an intention to terminate the service, in order for the community to—

(a) work with relevant authorities to find an alternative operator;

(b) set up a community transport group in order to run the service; or

(c) partner with an existing not-for-profit operator to run the route.

(8) The community may apply to the Secretary of State for financial assistance, training or advice during the notice period in order to achieve any of the aims set out in subsection (7).’”

This amendment would give Traffic Commissioners the power to designate bus routes assets of community value.

I apologise, Mr Owen, but this bus is moving rather more quickly than I had anticipated. We are doing very well.

The notion of defining a bus route or a bus service as a community asset may come as something of a surprise to people, as it did when it was first raised with me. However, the more I have thought about it, the more significant it seems it could be. Although much of the discussion today, with our comments about Nottingham, and on Second Reading has been about urban areas, the problems facing buses in rural areas are dear to many people’s hearts. Many of us would agree that the local bus service is a key aspect of everyday life in many parts of the country.

Without rehearsing the figures, which I suspect are familiar to all of us, bus services are disappearing from many parts of the country for a whole range of reasons. As was explained by my hon. Friend the Member for Ashfield, there is quite often a feeling of powerlessness when there is a sudden change to what may be a lifeline—sometimes that is for relatively few people, but it is crucial to them none the less. Whether from urban or rural areas, I suspect all of us, as Members of Parliament, have found ourselves in the difficult situation of responding to local people who come to us and say, “The bus service is going or changing; what can you do to help?” That has been a part of the discussions we have had throughout the day.

I suspect that a discussion about advanced quality partnerships, franchising, net costs, gross costs, contracts and all the rest of it will not greatly reassure many people. They want to know what can be done about their bus service; that is what matters to them. What we suggest is that those means of communication—those routes—are seen as a community asset and put on the same legislative footing as community assets such as pubs, community buildings and land. That is not to say that something can be preserved forever—that is impossible—but the measure would slow down the process, just as we do with a potential pub closure, to give the community the chance to build the capacity and support to put something else in place. I am not sure that the big society is still with us—

[Andrew Jones]

It certainly is.

[Daniel Zeichner]

In which case, this is the big society revisited. I am sure the Minister will be commended for defending it.

The community asset legislation sits comfortably within the Conservative Government’s Localism Act 2011. It rightly recognises that community assets should be protected and given elevated status so that communities can come together and help to save or run things that they judge they cannot do without. The proposition is to establish a new class of assets of community value—bus route assets of community value—based on the route of the bus, as designated and held by the relevant traffic commissioners. It is notable that currently, bus stops can be an asset of community value. Indeed, some have been designated as such, which shows the importance that local communities place on such services.

The amendment would allow communities to come together to apply to the relevant traffic commissioner to designate the service they hold dear as a bus route of community value. The route would then be subject to a six-month moratorium should there be a threat of its being cut, which would allow precious time for the community, as defined by the Localism Act, to work with the relevant authorities to find an alternative operator, set up a community transport group to run the service, or partner with an existing not-for-profit operator. The powers mirror those in the Localism Act, and would change rural passengers’ influence over how bus services are delivered to them.

The nomination would be made by a community based in, or with a strong connection to, an area through which the bus route passes and on which the route has a direct social impact. Community groups could include a local or parish council, a voluntary or community body with a local connection, a bus user group, a group formed for the specific purpose of maintaining the bus route, a church or other religious group, or a parent-teacher group associated with a particular school or schools.

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[Daniel Zeichner]

Yet again, my hon. Friend is absolutely right. This is about trying to find ways of tackling the relentless erosion of services that have been a key part of the fabric of many communities.

Happily, I have been provided with a particularly good example from the constituency of Witney, which I am sure a number of us have had cause to visit in the last year—well, we should have, anyway. I did. I am not sure why, in retrospect—[Laughter.] It was because I was a good friend of the unsuccessful Labour candidate. Anyway, in the face of vital service withdrawals, the local Labour and Co-operative councillors in Witney—I think it was the Labour candidate, in fact—have helped to save local bus services for the community.

The West Oxfordshire Community Transport benefit society was formed, and its people’s bus service has begun to carry passengers. It has managed to maintain timetables, fares and the routes that people in the area rely on, but one thing is different about that new service—it belongs to the community itself and will be run not for profit. As it is a community benefit society, anyone is able to join, which has an additional effect in terms of community development and bringing people together. That is a good example of the types of organisations and communities that would benefit from the amendment.

The amendment would go one step further than the existing Localism Act powers and place a duty on the Secretary of State to provide financial assistance, training and advice to communities working to save routes through the new moratorium period. We think it is an innovative proposal that could be built on by a Government that wished to join the hundreds of communities around the country that will meet today or this week to discuss ways in which they can maintain their area’s bus service.

[Andrew Jones]

Amendment 30 would reinforce the local importance of certain bus services by enabling them to be designated as routes of community value. I am fully aware of the issues that many people experience with bus services that are under threat or have been reduced, and there is no doubt that many local authorities face funding issues and therefore difficult decisions about the services that they wish to subsidise. However, in several areas of the country we are seeing innovative solutions, from the community transport sector stepping in to the provision of more integrated services and the Total Transport pilot schemes that my Department is supporting. It is encouraging to hear the story from Witney. Interestingly, that is not an area that I have been to for quite a long time. I hope that my hon. Friend the Member for Sherwood is not listening. [Laughter.] Well, it was never in doubt, was it?

The amendment would resolve issues relating to the continued provision of services on routes that are deemed to be of community value. I agree that where services are to be cut or their frequency is to be significantly reduced, commercial operators—or, in the case of subsidised services, local authorities—must do all they can to keep people informed, consult them and seek to pass on a service in some form. That is part of the thinking behind clause 19, which provides for greater information to be provided to local authorities when a service is reduced or cancelled.

However, I do not think that it is reasonable or sensible to force operators to continue to operate a service, potentially at significant financial detriment, for six months rather than the 56 days currently required. Doing so could act as a disincentive for operators to trial new services, step in to see whether they can make a service viable or operate services commercially where local authority funding is precarious and can be kept going for only a short time. The unintended consequences could easily outweigh the benefits that the Opposition wish to see. I hope that, in the light of those considerations, the hon. Member for Cambridge feels able to withdraw his amendment.