Bus Services Bill [HL]

Baroness Jones of Whitchurch Excerpts

Report: 2nd sitting (Hansard - part one): House of Lords
Monday 24th October 2016 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Transport (Lord Ahmad of Wimbledon) (Con)]

My Lords, the Government have tabled technical amendments which tidy up the Bill and correct drafting references. I will go through them briefly in turn. More information about the purpose of the amendments is provided in the letter I sent when they were first tabled.

Amendment 18 makes it clear that the Bill does not prohibit, for example, an executive from exercising franchising functions on behalf of a mayoral combined authority. It does not enable decisions that the Bill stipulates are mayoral decisions—such as the decision to move to franchising—to be taken by anyone other than the mayor.

Amendments 43 to 46 and 83 to 86 are identical amendments ensuring that certain references in the Bill are to all authorities that are part of a scheme rather than only the authorities that initially made the scheme.

Amendments 75 and 76 ensure consistency by amending the Bill so that certain enhanced partnership provisions refer to both facilities and measures. Amendments 79 and 80 ensure that regulations can be made regarding aspects of appeals that are needed in the context of a transition to an enhanced partnership scheme.

The Government have also tabled amendments correcting references and straightforward drafting errors. These are Amendments 20, 50, 52 to 56, 61, 62, 65, 74, 77, 78, 94 and 96. I beg to move.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I will not detain the House by commenting on the amendments in detail. As the Minister has said, they are largely technical and intended to tidy up the legislation. We accept that they reflect the spirit of the Bill and the terms in which we have been debating the issues so far. I will not rehearse the argument we have already had about why tidying up is still taking place because we have explored that in some detail. At this point in the Bill’s progress, I do not think that that would be helpful and we are therefore content to support the amendments.

Amendment 18 agreed.

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Moved by

[Baroness Jones of Whitchurch]

39: Clause 4, page 19, line 31, at end insert—
“(7A) The scheme must specify whether consideration has been given to the wider social, economic and environmental benefits of the scheme, in accordance with the Public Services (Social Value) Act 2012.”

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[Baroness Jones of Whitchurch]

My Lords, in moving Amendment 39, I shall speak also to Amendment 73. These amendments would require those opting for a bus service under franchise, and those developing enhanced partnership schemes, to apply the principles of the Public Services (Social Value) Act 2012 when determining the type of service to be commissioned.

As we discussed in Committee, the social value Act recognises that public services can play a transformative role in communities. Rather than simply opting for a narrow definition of value, it requires those procuring services to consider the economic, social and environmental benefits of each bid. It allows local authorities to think about public services in a more coherent way, particularly on a combined-service basis, and encourages those bidding for contracts to be more imaginative about the community benefits their service could bring.

Often this can result in better-designed services, with other benefits and efficiencies. In the case of bus services, it could include, for example, a commitment to train and employ a number of long-term unemployed people to work on a contract; or it could include a number of apprenticeships and work experience places for young people; or it could include a commitment to support an existing community bus service, perhaps with some shared facilities; or it could include an environmental plan with targets for green energy and reduced CO₂. Of course these are just examples, but the point of social value in this context would be to encourage bus operators to commit to their own added-value measures without costing any more money.

In a letter on this issue to the noble Baroness, Lady Scott, and in our discussion in Committee, the Minister expressed some sympathy with these aims but argued that it would be better covered in the guidance that accompanies the Bill. However, we were disappointed with this response, because the fact is that the social value Act is simply not being embraced in the way that was intended. We believe that it would benefit from being on the face of the Bill to underline the importance of this approach.

As we mentioned in Committee, the operation of the social value Act was reviewed last year by the noble Lord, Lord Young. He concluded that, where it was used effectively, it resulted in commissioners being much more innovative and delivering much more responsive public services. This is great news. However, the noble Lord, Lord Young, then went on to conclude that the opportunities and advantages were simply not widely enough understood and take-up of the concept was therefore low. This is our opportunity to put this matter right by embedding this approach in the provision of local bus services in the future. However, that will only happen if it sits in the core of the Bill; if it is buried away in guidance notes, as the Government are proposing, it runs the risk of being ignored and misunderstood again in future.

I hope that the Minister will reconsider his position on this and that noble Lords will feel able to support the amendment. I beg to move.

[Baroness Scott of Needham Market]

My Lords, I offer the support of these Benches for the amendment. It would be rather strange if we did not, because the social value Act 2012 was a Private Member’s Bill taken through this House by my noble friend Lord Newby. I raised the question of the use of this Act in Committee, so I am grateful to the Labour Benches for picking this up and transferring it into an amendment.

As we have heard, the social value Act allows public bodies to take a much broader range of issues into account than conventional procurement practices do, so they can think about the environment, community well-being and the local economy. It actually goes one stage further, because the Act makes people think about the considerable financial power of public procurement in an area and is a way of local authorities and local health authorities harnessing their own commissioning power for the benefit of their communities.

As we have heard, the evaluation last year by the noble Lord, Lord Young, was that, while there had been some real success stories, the social value Act was not being used enough and was not sufficiently understood. I have a lot of sympathy with an amendment which puts this on the face of the Bill because it forces commissioning authorities to really think about whether they have given sufficient consideration to this. Overall, it is a way of ensuring that compliance improves.

I was very taken with the conversations I had on this matter with HCT, formerly Hackney Community Transport, which is a social enterprise that provides bus services in a range of areas as diverse as London boroughs and Jersey. It feels very strongly—and made the point to me—that current procurement practices often freeze out smaller businesses. That is a great pity because some of the best bus operators in the country are the small, local ones. It is important to find ways to strengthen this aspect of the Bill and really help local authorities, in their various forms, to make the most of this considerable new power.

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[Lord Ahmad of Wimbledon]

My Lords, I thank all noble Lords who have taken part in this debate. On that final point from the noble Lord, Lord Berkeley, I am sure he will not be surprised to hear that I will look into those comments. However, the Government’s position has been made clear during the course of the Bill. Certainly, on the franchising issue and specifically on mayoral authorities, we believe that they are the preferred model because of their governance issues. On the other issues he raised, I have not seen those comments so it would be inappropriate for me to say any more at this juncture. However, I will read his contribution and come back to him.

The amendments before us concern the Public Services (Social Value) Act 2012. As we all agree, and as I have said repeatedly, we accept the principle that it encourages those who commission public services to talk to their local providers and communities to design better services. The noble Baroness, Lady Scott, first raised this issue at Second Reading and it has been a constant theme throughout the passage of the Bill.

As I have said before, and as noble Lords have acknowledged previously, the 2012 Act already applies to certain procurements by local authorities. In addition, based on our discussions both at Second Reading and in Committee—I hope noble Lords have seen the draft guidance that my department issued recently—we have taken on board the comments and contributions made in the debates on the Bill to ensure that that is reflected appropriately in the guidance. As I am sure noble Lords have seen, it sets out that where the provisions of the Act do not apply because the procurement value falls below relevant thresholds, there is still a need for local authorities to apply the core principles of the Act when procuring services. So not only have we listened but we have acted to strengthen the guidance beyond the original provisions of the Act.

As I said in Committee, we do not believe that we need reference in the Bill to an existing piece of legislation that applies in its own right. However, we accept the principle, and that is why we have strengthened it in the guidance that will accompany the Bill. More broadly, I think that noble Lords are keen to ensure that authorities think about the social, economic and environmental benefits and impacts of schemes. I agree entirely but point out that the Bill already requires authorities to think about these benefits through the franchising and enhanced partnership provisions.

As noble Lords will no doubt recall, as part of their assessment of their proposed franchising schemes, authorities will need to consider value for money, which will include detailed analysis of the social, economic and environmental impacts. Likewise, for enhanced partnerships, the Bill specifies that a scheme can be introduced only where it brings benefits to people using buses or where it reduces congestion, noise or air pollution. Therefore, the Government have listened and, as can be seen from the way we have strengthened the guidance accompanying the Bill, as well as the provisions of the Act relating to the procurement of services, we have specifically considered the social, economic and environmental costs of schemes, and that is well embedded in the Bill.

I hope that noble Lords will be assured by the action we have taken to strengthen and enhance the guidance accompanying the Bill. The existing legislation will be brought to the attention of local authorities and will be referenced in that guidance. We feel that using the guidance is the appropriate way to address this important topic. Again, I thank noble Lords, particularly the noble Baroness, for raising this issue at an early stage in the Bill. I feel that we have made progress and I hope she will feel minded to withdraw the amendment.

[Baroness Jones of Whitchurch]

My Lords, I thank noble Lords who spoke in support of our amendment. I agree very much with the noble Baroness, Lady Scott, about the creative role that smaller companies such as HCT can play. I also very much welcome the comments of the noble Lord, Lord Cameron, about the need to rural-proof and about how amendments of this kind can help that process. I assure him that the particular needs of rural communities have been a common theme throughout our debates, and indeed further amendments have been tabled picking up that theme.

I thank the Minister for recognising in the debate and in the draft guidance the validity of some of the issues that we have been raising. I think that our differences always related to the profile that the social value Act would get if it was buried away in the guidance notes. We still have concerns about that and would still like to look at other ways of raising the profile of the Act within the Bill. In the meantime, there is obviously scope for us to look again at the draft guidance and whether there is anything more we can do around that. However, on the basis that the Minister has gone some way to meet our expectations, I do not intend to push the amendment to a vote.

Amendment 39 withdrawn.

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[Lord Ahmad of Wimbledon]

My Lords, in Committee, a number of noble Lords tabled amendments concerning the information that authorities can require of bus operators in association with either franchising or enhanced partnership proposals. I thank all noble Lords for their discussions on this, both inside and outside the Chamber. My noble friend Lord Attlee made some important points about the purpose for which authorities may use the information they receive. I agree that authorities should be able to use information acquired in connection with a franchising proposal only for that specific purpose and should not be able to use it, for example, to develop or negotiate an enhanced partnership. I am therefore tabling a number of amendments to ensure that any information received by an authority from a local bus operator can be used only in connection with the purpose for which it was requested.

The amendments also make it clear that an authority may disclose the information it receives from operators to any persons carrying out activities on behalf of the authority; for example, an auditor—a subject we covered earlier—or a consultant, or, in the case of enhanced partnerships, any other authority that is party to the proposals. The authority will, of course, need to ensure that any third party acting on its behalf treats the information with due care, and I would expect that to form part of any contract that the authority enters into with a consultant. This will also be made clear in the Bill’s statutory guidance.

In Committee, the noble Lord, Lord Berkeley, made an important point about the need for operators to respond to information requests from local authorities within a reasonable time period. I agree with him and am bringing forward a number of amendments to that effect. In turn, I expect local authorities to work with their local bus operators to determine what is reasonable, and to adjust the time period based on the breadth and depth of the information request.

I know it will please the noble Lord, Lord Kennedy, and the noble Baroness, Lady Jones, when I say that there are a few technical government amendments in this group which tidy up the drafting of the Bill. Amendments 88 and 93 make it clear that a local authority can require information to determine whether to vary or revoke an enhanced partnership plan or scheme, and that a joining authority can also require such information. Amendments 91 and 92 make the drafting more precise. I beg to move.

[Baroness Jones of Whitchurch]

My Lords, again, we do not feel the need to make much comment on these amendments. Apart from the now-routine technical amendments, the remainder are very much in the spirit of requiring bus operators to supply the relevant information to local transport authorities within a specific timeframe. We welcome the improved wording and the explanation given by the Minister today. We are happy to support the amendments.

Amendment 49 agreed.