Bus Services Bill [HL]

Baroness Scott of Needham Market Excerpts

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

[Lord Judd (Lab)]

My Lords, I did not participate when this group was debated last week. I put forward this amendment because I wanted the opportunity to debate it properly today.

I very much welcome the amendments that the Minister made to Clauses 1, 4 and 9, that will require local transport authorities to consult neighbouring national park authorities when preparing franchising or partnership schemes. I thank him and his officials for so readily listening to the concerns and taking on board the points raised about the importance of national parks authorities being listed as statutory consultees, and putting that in the Bill.

I also very much welcome the amendment the Government tabled to Clause 7, which adds national parks authorities as statutory consultees for advanced ticketing schemes. This should ensure that there is more opportunity to include routes serving national parks in Travelcard and other joint ticketing arrangements. Providing a national parks authority with more opportunity to influence all these schemes will help ensure that the needs of both residents of and visitors to these areas are taken into account, and will contribute to ensuring that these beautiful areas are accessible to everybody and not just those with a private car. They also have the potential to contribute towards combating traffic congestion which threatens to spoil the parks and to undermine their purposes. This is particularly important in light of the Government’s aspirations, as set out in the eight-point plan for national parks, to see more people gain from the health and well-being benefits offered by these inspiring areas.

Overall, it is good to see the progress made to this part of the Bill. However, I still have this further amendment, which relates to ensuring that LTAs consider the impact on NPA policies when assessing proposed franchising schemes. We all know that NPAs are, obviously, not local transport authorities but they have played a key role in delivering bus services in recent years and their core strategies contain relevant policies relating to transport and access which should be taken into account when preparing franchising schemes. For example, the New Forest National Park Authority’s core strategy includes policy on access to promote safer access and more sustainable forms of transport to, from and within the national park, and specifically refers to support for the New Forest Tour bus services.

It is essential that the impact on such policies is considered when assessing proposed franchising schemes. The amendment I propose to Clause 4 should ensure that this happens. I hope that, even at this late stage, the Minister could give this further consideration before we come back to the final stage of the Bill. I am very willing to come and see him if he would like me to do that to discuss it in more depth. I hope he will feel able to meet this point as he has so commendably and readily done on the other points raised previously. I beg to move.

[Baroness Scott of Needham Market (LD)]

My Lords, I wish to support the noble Lord, as I did in Committee. I echo his comments about the Minister’s willingness to meet the concerns that we have raised here. However, there is a big difference between consulting—which could frankly just mean writing to the national park authorities and ignoring what they say—and a genuine process of taking into account the work that they have been doing in their areas, particularly in public transport. I hope that in the spirit of the way the Minister has behaved so far, he will take this extra step.

[Lord Ahmad of Wimbledon]

My Lords, I thank the noble Lord for his amendment and the noble Baroness for her contribution. The amendment would make national park authorities relevant authorities as far as new Section 123B is concerned. As the noble Lord pointed out, this section deals with the business case and primarily concerns the authorities that will be making a franchising scheme with transport powers.

I would like to clarify where we stand on this point and on the question that the noble Lord raised. To be clear—I hope this gives a level of reassurance to the noble Lord—the Bill requires the franchising authority to think about the impacts of bus franchising on neighbouring local transport authorities, and this should ensure that cross-boundary services are carefully considered. Regarding his point and that of the noble Baroness on the business case, the provisions we have already made in the Bill will ensure that any authority looking to proceed down this line will pay due consideration because it is now a statutory requirement. I therefore feel that the Bill has been strengthened to reflect the noble Lord’s concerns.

I am always happy to meet with the noble Lord to further understand elements that he wishes to raise. I think the guidance is playing an important part in this and while we have included national parks specifically when it comes to franchising in terms of the actual statutory consultee, we will also bring notice to appropriate authorities when they are considering the overall proposal in the first place. I hope that with this assurance—and I always welcome meeting with the noble Lord—he will at this juncture be minded to withdraw his amendment.

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Moved by

[Baroness Scott of Needham Market]

28: Clause 4, page 16, line 26, after “an” insert “independent”

[Baroness Scott of Needham Market]

My Lords, Amendment 28 returns to the question of an independent audit of proposals for new franchising schemes. I thank the Minister for meeting me in September to discuss this matter and for his subsequent letter. The purpose of the amendment is to provide the House with an opportunity to look again at the question of an independent audit and for the Minister to elaborate and build on the letter that he sent me.

The issue here is protecting the public against the careless use of local taxpayers’ money. I have always believed in devolution; indeed, I have long thought it was a scandal that our major cities constantly have to go cap-in-hand to government whenever they want to undertake a capital programme. But I am also a great believer in democratic accountability, and there is a real problem in mayoral models in that the very concentration of power in the hands of one individual that makes it such an attractive option to government also runs a significant risk of poor decision-making because it is untested by debates in traditional committees or through effective scrutiny.

The Public Accounts Committee published a report in July in which it said:

“There has been insufficient consideration by central government of local scrutiny arrangements, of accountability to the taxpayer and of the capacity and capability needs of local and central government as a result of devolution”.

The committee went on to talk more about its concerns about capacity issues, particularly financial and technical skills, which have been exacerbated by budget cuts. Providing a requirement for a mayor to give information that proposed new schemes, potentially worth millions of pounds, have been independently audited is an important safeguard. The auditor usually engaged by a local authority may very well have their independence compromised by their wish to hold on to the contract.

Equally importantly in terms of public confidence is that the audit should be seen to be independent. The Public Accounts Committee had this to say:

“Robust and independent scrutiny of the value for money of devolved activities is essential to safeguarding taxpayers’ money, particularly given the abolition of the Audit Commission … Currently, local auditors focus on individual bodies’ financial statements and arrangements for securing value for money, rather than assessing value for money itself”.

In his letter to me, the Minister referred to the guidance on the matter that he had agreed to develop, and I would be grateful to hear more about that today. He referred to the availability of freedom of information as a means of achieving transparency. I wonder whether he can confirm today that such freedom of information requests will not be met with commerciality exemptions. I beg to move.

[Lord Shipley (LD)]

My Lords, I support this amendment, to which my name is attached. My noble friend Lady Scott of Needham Market said that it related to the protection of the public, and I agree entirely with all that she said. I draw the Minister’s attention to the fact that the context is not the same as it was when we debated this matter in Committee, because an amendment was agreed on day one of Report extending franchising powers to all relevant councils and local transport authorities. I supported that in the Lobbies but I have always believed that it must be accompanied by a robust and thorough audit and full scrutiny of any proposal for franchising.

Detailed audit and scrutiny processes exist within mayoral combined authorities because this House wrote into the Cities and Local Government Devolution Act much more comprehensive arrangements for audit and scrutiny than had originally been planned. As my noble friend Lady Scott of Needham Market made clear, it is not as much as we wanted, and many feel that it is not enough—but it is, nevertheless, more than is proposed in the Bill for non-mayoral combined authorities.

I hope that the Minister will give much further consideration to the proposal that there should be full scrutiny and audit of any franchising plan proposed by a council or local transport body which is not a mayoral combined authority. My noble friend Lady Scott received a letter from the Minister dated 5 October which expresses much agreement on the need for the audit process to be credible and open to public scrutiny, and accepts that there must be robust evidence and analysis. Indeed, on page 2 the letter accepts that the process should be independent, and one in which other people will have the right to challenge the report. Clearly the process must be seen to be transparent.

We need an auditor with appropriate professional standing who is clearly independent of the contractor and also has professional knowledge of audit, finance and, crucially, transport. I suggest to the Minister that it will be a rare person indeed who, as auditor to a council or a local transport body, has all those skills. It is my view that a specific appointment should be made.

I accept that this matter could be subject to further discussion during the passage of the Bill and then in the production of guidance—but, now that the House has extended franchising powers to non-mayoral combined authorities, having a robust and independent audit system has become increasingly important.

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[Lord Ahmad of Wimbledon]

Again, I do not think I can give a blanket assurance. The auditor is there to see that due process has been followed, and that decision will be subject to public scrutiny. Any auditor is there to do a job and will do it to professional standards. I hope that, based on the assurances I have given, the noble Baroness is minded to withdraw her amendment.

[Baroness Scott of Needham Market]

I thank noble Lords who have spoken in the debate. Their response suggests that I was right to return to this question, and indeed the Minister’s response would also suggest that I was right to do so. There is widespread agreement that this is a difficult issue. Of course, it is not just about a potential loss of taxpayers’ money if the scheme goes forward. These schemes are extremely expensive even to start developing, so it is essential that local authorities have sound financial advice all the way through about the financial viability—and, given the relationship with the Competition and Markets Authority, about the legal liabilities—before they embark down this route.

On the question of freedom of information, although I understand that each application has to be treated separately, there are exemptions in the legislation for commercial agreements. My nervousness is simply caused by the fact that every time someone asks questions about a potential franchising scheme, they receive a blanket, “No, we can’t talk about that because it is commercially sensitive”. I am not sure that I would put the same reliance on freedom of information as a transparency tool in this case as the Minister does. Nevertheless, I am confident that he has taken the issue seriously and that his officials are working on the guidance and with local authorities and auditors—so I thank him and other noble Lords for that and I beg leave to withdraw the amendment.

Amendment 28 withdrawn.

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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.

[Baroness Randerson]

My Lords, I am very pleased indeed that this duo of amendments has been put down. They link well with Amendment 97, which provides a mechanism for expressing and recognising community value.

I simply add to what has been said already that it is essential that the Government recognise that bus services fulfil a vital social service, especially in rural areas. The knock-on effect of social isolation is far more costly than any subsidy put into bus services. That is why concessionary fares for older people have been so effective. I know that the Government recognise that effectiveness. We should add to that social impact the huge potential contribution of bus services in reducing air pollution, particularly in urban areas. Therefore, it is important that the Minister uses every opportunity in the Bill to emphasise the importance of the social value of bus services in general.