Bus Services Bill [HL]

Lord Kennedy of Southwark Excerpts

Monday 4th July 2016 Lords Chamber

Moved by

[Lord Kennedy of Southwark]

34: Clause 4, page 15, line 43, at end insert—
“(g) the extent to which not-for-profit bus operators can be integrated into a proposed scheme in order to contribute to the long term sustainability of the scheme.”

[Lord Kennedy of Southwark (Lab)]

My Lords, Amendment 34 is proposed by me and my noble friend Lady Jones of Whitchurch. It would require the franchising authority or authorities to give consideration when drawing up a scheme to how the not-for-profit sector could be involved, the purpose being to contribute to the long-term sustainability of the franchising scheme, which, one hopes, will give local people a better bus service than they enjoy at present. The not-for-profit sector is thriving in a variety of areas. Expanding this model in the delivery of bus services is one way to contribute to ending the decline in bus services and routes that we have seen over many years, especially outside London, and which has been the subject of discussion during consideration of this Bill. It can complement other providers and deliver on a smaller scale bus routes that really benefit local communities and that can boost the local economy, connecting people with jobs, shops, schools and other services that they may not have had access to in recent years. Our amendment would require any assessment to include such proposals.

I hope that the noble Lord, Lord Ahmad of Wimbledon, does not have “resist” in his notes against this amendment. He has been very responsive today and in our previous day in Committee, and I hope he continues in that vein. Perhaps he will say to us that the amendment is not necessary, or suggest that it might be included in guidance. Of course, it could be in guidance, but as I hope he can see, that would not have the weight of its being clearly in the Bill.

We all want to see better bus services, and this Bill is a very positive step forward, but we need to go a little further to strengthen the proposals in some areas, as this amendment would certainly do. It would make it easier for different models of service to come into play and give a better bus service for all. I beg to move.

[Earl Attlee (Con)]

My Lords, not-for-profit bus services, or community transport, cover a wide spectrum of services, including those operated by charities. I am the first to praise the extraordinary work the sector does for people who need a lot of support in their daily lives—drivers who walk users to their door to make sure they have not lost their keys and then carry their shopping into the hall are local heroes. The sector can also plug a few gaps in services for the general public where there are not enough passengers to make a route a commercial proposition and the hard-pushed local authority does not have sufficient resources to fund a standard bus service.

However, I urge my noble friend the Minister to resist the amendment. Community transport services are not subject to the same regulatory regime as local bus services. Their drivers are not subject to the same stringent training regime as those driving registered services, nor do they need to satisfy many of the other compliance requirements set down by the traffic commissioner.

Services operated under Section 19 of the Transport Act 1985—it is mainly this type of service we are talking about with this amendment—are exempt from many safety and fair competition rules so long as they are not provided to the general public. So how on earth can they contribute to the success or otherwise of a franchise?

The whole issue of services operated under Section 19 and indeed Section 22, permits has been a bone of contention for many years with the EU. If community transport operators were required to enter the local bus market and operate under the same rules as operators of registered services, it would be a different matter, but they are not. There is no level playing field and, at the moment, community transport operators are able to operate more cheaply but without the regulatory safeguards in place for other operators. I therefore urge my noble friend to resist the amendment as gently as he can.

--- Later in debate ---

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

My Lords, I thank the noble Lord, Lord Kennedy, for his amendment, which would require franchising authorities to consider, as part of the assessment of their proposed franchising scheme, the extent to which not-for-profit bus operators can be integrated into a franchising scheme to contribute to its sustainability. Let me say at the outset that I sympathise with the aims of his amendment. I recognise the good services that community bus service operators and other not-for-profit bus operators deliver to our communities across the country and know that they often provide flexible and bespoke services which act as a lifeline to many. The intervention from the noble Baroness, Lady Scott, underlined that element.

The Bill recognises the important role that community transport operators play in providing local public transport. Provisions have been included in the Bill to ensure that services operated under community bus permits will not be affected by the introduction of franchising or enhanced partnerships. This will enable them to continue to run their services unaffected by these schemes. I hope noble Lords will agree that these provisions are sensible and that they will help ensure that community bus providers can continue to deliver their valuable services to our local communities.

Even with these protective provisions in the Bill, I recognise the valid point the noble Lord, Lord Kennedy, raises, and agree that authorities looking to improve local bus services should consider how services provided by community transport operators can be best integrated to deliver a better overall network of services for passengers.

Let me assure noble Lords that the Bill does not preclude authorities, as they develop their franchising or enhanced partnership proposals, working with community transport and not-for-profit operators to determine how they can best be integrated into the wider network of services, but I agree with the noble Lord that this approach should be encouraged. I am, therefore, of the view that these issues are best covered through further guidance that will be published to complement the provisions of the Bill. I hope the assurances I have given in this contribution enable the noble Lord to withdraw his amendment.

[Lord Kennedy of Southwark]

Will the Minister say a little more about why he thinks that this should be in guidance? He says that authorities can do this, and that is all well and good. Why then is it not going to be in the Bill? Why should it be in guidance? My worry is that guidance is not legislation. Guidance is forgotten over time, things get moved on and revised, and all of a sudden it is not there and gets forgotten about. Why is guidance better than the Bill?

[Lord Ahmad of Wimbledon]

My Lords, I have already said that there are provisions within the Bill that protect that element of community transport and not-for-profit operators. While the noble Lord feels that the guidance is not sufficient, it forms part and parcel of the guidance in support of the Bill, on which these new proposals go forward.

--- Later in debate ---

[Lord Kennedy of Southwark]

I am not sure the Minister answered the point I was making there. I am thinking of organisations such as Hackney Community Transport. If it wants want to provide services elsewhere in the country, like it currently does for TfL, why should that not be in the Bill, rather than in guidance?

[Lord Ahmad of Wimbledon]

I do not think I can add any more. If the noble Lord feels that the strength of what the Government are presenting does not meet what he is suggesting, I suggest we discuss this issue. At the moment, we are minded that existing provisions within the Bill, with the assurance of including such provisions in the guidance, provide the necessary safeguards alluded to by the noble Lord. I hope, with this assurance and the continuing discussions we are having on various aspects of the Bill, that he will be minded to withdraw his amendment.

[Lord Kennedy of Southwark]

I thank the Minister for that contribution. I will take up his kind offer to have a discussion outside the House. He has been very generous with his contribution today and with his time. I appreciate that very much. I thank all noble Lords who have spoken in this short debate. I do not agree with the remarks of the noble Earl, Lord Attlee, as I want to see the not-for-profit sector being able to provide bus services, as elsewhere. I thank the noble Baronesses, Lady Randerson and Lady Scott, for their support. The noble Baroness, Lady Randerson, was spot on in speaking about the needs of rural areas and the widest range of schemes available to deliver those services. As she said, Hackney Community Transport delivers services for TfL, so why cannot it, or other providers in the not-for-profit sector, deliver bus routes elsewhere, in urban or rural areas? This Bill is about improving bus services and my amendment helps in that respect, improving the Bill further and giving further options for the provision of bus services. I will leave it there and look forward to talking it over outside the Chamber, but I may well bring the amendment back on Report. I beg leave to withdraw the amendment.

Amendment 34 withdrawn.

--- Later in debate ---

[Baroness Randerson]

My Lords, I say in response to the noble Lord, Lord Snape, that of course the arguments he makes about less reputable companies fortify my argument that a lot of these things need to be set out in the Bill, so that we can ensure that only the more reputable companies—those that observe those aspects important to passengers and indeed to our environment—are able to win a franchise.

I say in response to the noble Earl, Lord Attlee, that I cannot understand why bus companies should be immune to the usual rules of business in this country. Increasingly local government services are run through commercial companies in various forms. Many commercial organisations are involved in the provision of a range of local authority services right down, for example, to care for children, the elderly and so on. Local authorities franchise services or commission them and from time to time they will change the companies they are working with; someone loses the contract. There are well-known procedures throughout our public life which account for that to happen, thus enabling a service to be handed over from one organisation to another. I cannot see why bus companies should be exempt from that general run of business.

[Lord Kennedy of Southwark]

My Lords, Amendment 35, which has been proposed by the noble Earl, Lord Attlee, is not one that I can support today. As we have heard, the amendment puts a requirement into the Bill that would require the taking into account of any compensation payable to bus operators whose businesses are wholly or partly expropriated by the scheme. I do not think that there are any plans in the Bill to expropriate anyone’s business. The franchising model will work on similar terms to those which presently operate in London, where private bus operators happily deliver services on routes laid down by TfL. They make profits and the service works well.

I agree with the comments made by the noble Baroness, Lady Randerson, who asked why the bus industry cannot be aligned with the rest of the public sector in terms of contracts being tendered for and then won or lost. People move on and things change. That works in the whole of the rest of the public sector and is certainly the case in local government; I have said before that I am a councillor in Lewisham. I am sure that the noble Lord, Lord Ahmad, will advise the Committee, but I think I am correct in saying that the Government do not anticipate any compensation being required if a franchising authority follows the process as set out in the Bill. For me, the Bill is about improving bus services for passengers and increasing the number of bus journeys being taken by people, thus halting the decline in bus routes and journeys over recent years, and that should be embraced by bus operators. Indeed, they may find that they actually make more money if they increase their routes and more people use them.

I look forward to the Minister’s response and I hope that he will allay the concerns raised by the noble Earl and thus demonstrate to the Committee that the amendment is not necessary.

[Lord Ahmad of Wimbledon]

My Lords, I thank my noble friend Lord Attlee for his amendment, which would require franchising authorities to consider as part of the assessment of their franchising scheme whether it will be,

“more efficient, effective and economic than any other option, taking into account any compensation payable to bus operators whose businesses would be wholly or partially expropriated by the scheme”.

I recognise my noble friend’s desire to ensure that impacts on bus operators are fully considered as franchising schemes are developed. The Bill already addresses many of his concerns, and it may be useful at this point to provide a fuller explanation of proposed new Section 123B, which requires franchising authorities to conduct an assessment of their proposed franchising scheme. I fully acknowledge that moving to a model of franchising is a big decision that will impact on bus operators in the area. That is why the Bill requires authorities that are considering franchising to conduct a thorough assessment of their proposed scheme, including comparing their proposals with other options, which could include partnership proposals and the status quo.

The Bill also requires franchising authorities to think about the effects of the proposed scheme and whether it represents value for money. This will include, of course, consideration of the impacts of the proposal on passengers and bus operators, together with any wider impacts. I hope my noble friend agrees that the provisions in the Bill will require authorities to think carefully about their franchising proposals, compare them to other options and then take a well-reasoned and well-evidenced decision.

I turn to the issue of compensation payable to bus operators that my noble friend referred to. I fully recognise the years of hard work that many bus operators have put into growing and operating their businesses and their concerns about the future. As I have said, the Bill requires authorities to consider both the benefits that franchising could bring for local people, as well as the potential impacts, including those on bus operators. If franchising authorities follow the processes set out in the Bill, local bus operators will have plenty of notice that a franchising scheme is being considered, will be aware of a decision to introduce franchising, and will have more than six months’ notice that services are to be provided under local service contracts. This will enable operators to take any action they think appropriate and to plan ahead in the light of the decision to make a franchising scheme. Incumbent operators will, of course, be able to bid for contracts in any area that decides to move to franchising, and I should reflect that those operators’ knowledge of the local area and local customers is likely to stand them in good stead. In addition, the Bill does not provide franchising authorities with the power to take over the property of any bus operator if a scheme is made—a point made in an earlier debate.

In summary, I am therefore of the view that the Bill already addresses many of my noble friend’s concerns regarding the assessment of the franchising scheme and the need to compare it with other options. He raised the issue of compensation being available to those who do not win contracts, and referred to other schemes, not just franchising. While he makes a valid point, I note that authorities have been able to introduce quality contracts since 2000. This potential risk and impact on bus operators has been around for a significant period. I hope that he has been assured and reassured by some of my comments on the existing provisions in the Bill. I disagree that consideration of compensation should form part of franchising assessments—a point made by other noble Lords—but I hope that this debate has assured him that the Bill includes a thorough and comprehensive assessment process, and that he can withdraw the amendment.

[Lord Kennedy of Southwark]

Can the Minister say more about something I find hard to understand about the amendment? I am a councillor in a London borough and services are tendered for all the time, whether in relation to road repairs, street lighting, refuse collection and so on. People bid for contracts, win them and lose them. If they lose them, the new company takes them on and we do not have debates about paying companies compensation because they have lost their contract. They bid for a price, the council assesses it and a number of factors and makes what it believes is the best decision. I do not see why we are having this dispute or debate. If a company loses a bus route, I do not see why it should be paid compensation. It must have tendered for that route but has lost out in the process to another company that has been deemed to offer better value for money. This is a strange debate.

[Lord Ahmad of Wimbledon]

My noble friend tabled an amendment and it is right that we have a discussion in Committee. I hope that through the provisions in the Bill that I have highlighted—for example, the requirement to give ample notice—his fears are allayed as regards compensating a business franchise that goes out of operation. The Bill contains proper provisions in relation to, for example, giving notice. The noble Lord, Lord Kennedy, and I are on the same page on this.

--- Later in debate ---

[Viscount Younger of Leckie (Con)]

My Lords, I will speak to a group of amendments to Clause 4 and Schedule 2. Amendments 54 to 64 and Amendment 75 relate to the period which must expire before services can be provided under local service contracts. The Bill as introduced provides that at least six months must expire between a contract being awarded and provision of the relevant service, with the aim of providing a suitable period of transition for bus operators. These amendments do not change the policy but merely tidy up the Bill to ensure that this provision is clear.

Amendment 65 makes it clear that where a franchising scheme is varied to add an area which relates to another local authority, that authority must play an active part in the variation processes. This corrects the drafting of the Bill but does not change the policy intention. It has always been the Government’s intention that authorities that will have a franchising scheme covering the whole or part of their combined area should play a part in making or varying the scheme.

Amendment 76 amends the Local Transport Act 2008 to remove provisions relating to quality contract schemes for areas in England which were inserted into the Transport Act 2000. My noble friend Lord Ahmad wrote to noble Lords on 16 June providing notice of the government amendments he would be bringing forward in Committee. That note provides a fuller explanation of the precise changes to the Bill. My noble friend and I are of course happy to discuss these amendments further with colleagues if there are any concerns. I beg to move Amendment 54.

[Lord Kennedy of Southwark]

My Lords, I have no problem with the amendment but I want some further clarification. As I said in our previous discussion on our first day in Committee, we have a whole raft of government amendments and I do not understand why this issue was not sorted out before the Bill came to your Lordships’ House. Yes, the amendment adds the word “minimum”—Amendment 55 is similar—but these are tidying-up amendments and we are at the start of the Bill, not the end. It has been nowhere other than with the department and in this House. I am sure that the noble Lord listens to what all noble Lords say in this House, but it seems that a bit more work should have been done with Ministers before the Bill ever appeared here. Why we are getting these Bills so early, and why was this issue not sorted out before the Bill arrived here?

[Viscount Younger of Leckie]

That is a very reasonable comment. My noble friend Lord Ahmad was asked a similar question during consideration of a previous amendment, and I recall his answer. I will give the same answer, which I hope will be accepted: this Bill has been work in progress. A lot of the time, Bills are not absolutely perfect when they are presented. I will be quite open and honest in saying that it is simply a tidying-up process. I hope the noble Lord will accept that explanation.

[Lord Kennedy of Southwark]

I accept that it is a tidying-up exercise, but my point is that I am surprised that this could not have been sorted out in advance, given that, as we have heard, this Bill has been a long time coming and in preparation in the department. These are not major issues that have been found during our debates: it is just a question of missing words, for example. I could go through the whole raft of government amendments—none is anything major. So I do not understand why we are finding within a matter of days that odd words and phrases that should have been included in the first place are missing from a Bill that, we are told, has been months in preparation, and was due last year.

[Viscount Younger of Leckie]

I am not sure that my follow-up is going to give any further clarity. I simply point out that the Bill as introduced was not sufficiently clear on these points, and these amendments help to bring clarity. It is more fine-tuning and tweaking than anything particularly major.

[Lord Kennedy of Southwark]

That is fine. I will not pursue the point further, but for the Minister to come to the Dispatch Box and say that the Bill was not sufficiently clear, when it has been at least months in preparation, is not the best way to introduce legislation. I will leave it there.

Amendment 54 agreed.

--- Later in debate ---

[Earl Attlee]

My Lords, I am sure that these are sensible and valuable amendments for the Committee to consider. However, they are “Supplementary to the Second Marshalled List”. That means that they must have been tabled on Friday, which means that there is no time for officials to consider a response for the Minister and no time for the Minister to consider the advice of officials. It is a little bit rich for the Opposition Front Bench to tease the Ministers for tabling their late government amendments when it tabled its amendments on Friday.

[Lord Kennedy of Southwark]

The point I was making was the government amendments that were tabled seemed to be making little drafting corrections, inserting odd words. For a Bill that has been in the planning for nearly a year, that seems to me to be remiss.

[Lord Judd (Lab)]

My Lords, late or not, one has to look at the potential and the value of the particular amendment. I am greatly cheered by this amendment. It seems to me that we are in danger of totally losing sight of the ideal of community and the rest. A well co-ordinated, integrated bus service can play a tremendous part in furthering community activity. We just compound the problem of our individualistic society in which community is breaking down because people resort to their cars, go and do their shopping, go back home and watch the television, put on their computer or whatever it is. The fact is that, if we are to have a life worth living, we have got to have community. The bus can potentially be central to that community. I applaud the amendment.

--- Later in debate ---

[Lord Ahmad of Wimbledon]

As long as it was lovely, that is the important point to bear in mind. I thank all noble Lords, particularly the noble Baroness, Lady Jones, and the noble Lord, Lord Berkeley, for tabling their amendments, and acknowledge the noble Baroness, Lady Scott, for bringing this issue to the fore. The amendments aim to ensure that authorities think about the wider social, economic and environmental benefits of establishing a franchising or enhanced partnership scheme and remind authorities of their obligations relating to educational and socially necessary bus services.

Amendments 58A and 99ZA, tabled by the noble Baroness, refer to the Public Services (Social Value) Act 2012, which the noble Baroness, Lady Scott of Needham Market, mentioned in a previous Committee debate. As I have already indicated, and as the noble Baroness has acknowledged, I have written to her on this matter. My understanding is that the Public Services (Social Value) Act 2012 requires authorities which commission certain public services to think about matters relating to securing wider social, economic and environmental benefits in the context of procurement.

I believe that it would be useful to use the guidance that will accompany the Bus Services Bill to remind local authorities of the duty that the Public Services (Social Value) Act 2012 places on them in certain circumstances and to give some guidance on the approach to be taken in relation to procurement activities not covered by the Act. I assure noble Lords that, on the contribution of the noble Baroness, I immediately set the ball in motion. Work is in hand in the Department for Transport to consider how best we achieve this and it is getting some accolades. The noble Lord, Lord Whitty, is not in his place, but it is becoming a fast favourite of the noble Lord.

I also agree that any authority looking to establish a franchising scheme or an enhanced partnership scheme should think carefully about the wider social, economic and environmental benefits that such a scheme could bring. The Bill includes requirements for authorities looking to establish a franchising scheme or an enhanced partnership to think about whether the proposed scheme would contribute to the achievement of relevant policies and to consider the impacts of such a scheme. I hope this has reassured noble Lords that the social, environmental and economic issues will be considered as schemes are developed and that references will be made quite specifically in the guidance that accompanies the Bill to ensure authorities are aware of their obligations under the Public Services (Social Values) Act 2012.

Amendments 58B and 99B, tabled by the noble Lord, Lord Berkeley, relate to educational and socially necessary services. Authorities have certain duties to consider whether to provide socially necessary services, and they also have certain duties with respect to providing home-to-school transport. I agree entirely that authorities should consider these obligations as they develop franchising or enhanced partnership schemes as co-ordinated commissioning of public transport for the whole area can lead to real efficiencies. This is one of the core principles of total transport, and I support it wholeheartedly.

The obligations on local authorities with respect to socially necessary and home-to-school services remain in place regardless of whether franchising, enhanced partnerships, or any other model is employed and I do not think it is necessary to restate these requirements in the Bill. I do however recognise that we can continue to do more to ensure that authorities are reminded of their obligations through the guidance that I have mentioned already.

The other issue raised by the noble Lord’s amendment is that of an authority subsidising certain services which would not otherwise be provided. Authorities already have the ability to do this, and the Bill does not change that. I fully expect that authorities will subsidise certain services in a franchised model for example and confirm that this will be possible under any of the new models proposed through the Bill. The noble Lord, Lord Berkeley, talked about ferries. There is nothing to stop local authorities working with local operators to integrate ferries locally. Merseytravel’s multi-operator ticket already does this. It is unlikely that including a reference to ferries and the 2012 Act in this Bill would fall within the permitted scope, but I will consider the point and will write to the noble Lord if I am not correct in this respect. I hope that the assurances I have given have gone some way to addressing the issues that noble Lords have raised and that the noble Baroness will withdraw the amendment.

[Lord Kennedy of Southwark]

I know the Minister is trying to be very helpful today and we are very grateful to him for that. He has asked my noble friend Lady Jones of Whitchurch to withdraw the amendment. Is he saying that he is going to go away and think about this? I am not clear whether he said that. The amendment that my noble friend moved is important. I am not quite clear what he is saying in asking her to withdraw the amendment.

[Lord Ahmad of Wimbledon]

In the interests of time, if the noble Baroness, Lady Scott, does not mind I shall share the letter I wrote to her with all noble Lords. That should have been done as a matter of course. It will perhaps highlight the Government’s position, but to be clear, the Government are considering the provisions raised in the amendment, but within the guidance which will be in support of the Bill.

[Lord Kennedy of Southwark]

I think I got the letter, but I am afraid I not have actually read it yet. It arrived this morning in my email inbox. I just wanted to be clear what the Minister meant.

[Lord Berkeley]

On that point, has the Minister told the Committee when the guidance might be published in draft form? Will we be able to see it before Report, for example?

[Lord Kennedy of Southwark]

Apparently I did not get the letter after all. I certainly got a letter from the Minister this morning, but it may not be the one that we are talking about.

[Lord Ahmad of Wimbledon]

As I have reflected on before, while we are in the holy month of Ramadan, noble Lords should be thankful that they are not getting emails from me because they would be arriving at about 3 am. If I am writing them, I hope noble Lords are reading them. I will of course confirm when the guidance is due to be published, but I hope I have provided clarity and that the noble Baroness will withdraw her amendment.