Bus Services (No. 2) Bill [HL]

Lord Woodley Excerpts

Committee stage
Tuesday 28th January 2025 Grand Committee

[Lord Woodley (Lab)]

My Lords, first, I apologise for not being present at Second Reading and not supplying explanatory statements for my many amendments. It was all finalised at short notice, at the last minute. I rise to speak to Amendments 75 and 76 in my name.

[Baroness in Waiting/Government Whip (Baroness Twycross) (Lab)]

My Lords, if the noble Lord could wait until that particular group comes up, that would be appreciated. We are currently on the first group, which deals with Amendment 1 only. The noble Lord’s amendments will come up later in our proceedings.

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[Lord Grayling (Con)]

My Lords, again I rise briefly to follow my noble friend on these matters and to ask the Minister to give some thought to some of them before we get to Report. I want to return to the issue of ideology. I have never taken an ideological approach to this. That is why we have franchising in Manchester; I legislated for it, and I am very pleased that it has worked. I think that the London model, although it is heavily subsidised, has proved to be very good. I am not convinced that it is viable everywhere in the country. I am very pleased that it works in Cornwall, but I am far from convinced that it would work in Surrey.

The issue is this: the Minister is a respected figure in the transport world, but he is part of a Government who are pretty ideological and part of a party that in local government is pretty ideological. Ultimately, ideology should never take precedence over what is right for the consumer or passenger, but sometimes it does. I shall give him a practical example. I do not believe for a second, outwith being a member of a Labour Government, that he would seriously argue that bringing Chiltern Railways into state control, given how well it has performed over the past 25 years, is genuinely going to lead to a quantum better service for passengers. All I am seeking to do in probing him on this is to ask him, perhaps today or perhaps on Report, to address the question of what the safeguards are if ideology treads on the toes of good service for the passenger. If a decision by a local authority or a mayoral combined authority is genuinely going to provide a negative or uncertain impact for the passenger, there should be at least a duty in the Bill for that franchising authority to have regard to quality and not simply exclude the private sector for ideological reasons because it wants to take buses into a municipal bus company or run it in a particular way. Ultimately, the interests of the passenger should always come first. I seek his reassurance. Perhaps he will give some thought ahead of Report to how he is going to ensure that some of the issues that my noble friend has rightly raised are properly reflected in the legislation so that the customer really will always come first.

[Lord Woodley (Lab)]

First, I apologise again for my premature interjection earlier. I was given the wrong running order. I should have checked it; I was stupid. I am going to speak to Amendments 7, 17, 18, 19, and 20, which are in my name, and talk about the potential effects on working men and women who run this fantastic service that we all rely on so much.

Although existing legislation extends service notice periods, they are much shorter than the time required to roll out franchising. There is no doubt about that. I believe that procurement of services takes around nine months, followed by a further nine months for mobilisation. Amendment 7 addresses the risk that unsuccessful or unscrupulous operators could run down services prior to new franchises, affecting service continuity and potentially putting members’ jobs at risk. Therefore, will the Minister commit to assessing whether further regulation is needed to ensure service continuity where local transport authorities pursue franchising?

Feedback from those involved in the rollout of franchising in Manchester, the only area outside London yet to implement franchising, is that early and meaningful engagement with trade unions is vital to its success. The Department for Transport has said that it would “expect” all local authorities to engage with trade unions. However, expectations are not enough. Amendment 17 seeks to learn from the experiences of Manchester and ensure that all local authorities take a consultative approach with the unions and have a joint staff forum in place as recommended. This ensures consistency across the country and best possible outcomes for franchising. Will the Minister commit to publishing a code of practice or guidance for local transport authorities to follow as part of the franchise process?

Finally, my Amendments 18, 19 and 20 would strengthen staff protection in areas where local authorities implement franchising. As the Bill reverses the ban on new local authority bus companies, Amendment 18 seeks to ensure that provisions around the transfer of staff apply. There is a risk that bus operators under franchise contracts will seek to drive down pay and conditions in a race to the bottom or employ new starters on inferior pay and conditions.

Amendment 19 proposes that workers’ terms and conditions will be maintained for the duration of the franchise to prevent the creation of a two-tier workforce by ensuring that new staff are not employed on inferior terms. Although TUPE will apply when services transfer to new operators, these regulations need strengthening so that staff are protected not just at the point of transfer but throughout the franchising process.

Amendment 20 would establish that as soon as a local authority launches its franchising consultation, the full coverage of TUPE will apply. Will the Minister commit to bringing forward the regulations or statutory guidance around protections for staff that Amendments 18, 19 and 20 seek to address?

[Lord Hampton (CB)]

My Lords, I shall speak to my Amendment 61. I was very pleased to hear the Minister say that the Bill is about safety. All my amendments are about safety, but this is the briefest. It is very simple and builds on Amendment 6 tabled by the noble Baroness, Lady Brinton, to make sure that those who make these decisions are qualified to do so. My amendment would simply ensure that franchising authorities responsible for the design have the appropriate IOSH and NEBOSH certificates so that they can judge what is and is not safe.

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Moved by

[Lord Woodley]

9: Clause 11, page 7, line 33, at end insert—
“(a) either—”

[Lord Woodley (Lab)]

My Lords, in moving Amendment 9, I will also speak to Amendment 10 in my name. Although the Bill removes the ban on new local authority bus companies, they will still have to operate within the existing framework and compete with commercial bus operators. Amendments 9 and 10 would allow local authorities to directly award the provision of their local bus services to their company instead.

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[Lord Hendy of Richmond Hill (Lab)]

I will first address Amendments 9 and 10 from my noble friend Lord Woodley. The option of a direct award is designed to support the transition to bus franchising, bringing forward some of the benefits of franchising while delivering service continuity to passengers. Expanding the scope of direct awards to include local authority bus companies under all circumstances would not meet these objectives, which are limited and designed to deliver continuity and would, in the case of his amendments, prevent fair competition with private operators. With respect to my noble friend, these amendments are unnecessary and I would ask him to withdraw Amendment 9 and not press Amendment 10.

I thank the noble Lord, Lord Moylan, and the noble Earl, Lord Effingham, for tabling Amendment 13. It is up to local leaders to determine how to run their bus services best and to assess the effectiveness of the delivery of their franchising contracts. Franchising authorities using direct awards are subject to comprehensive reporting requirements and the Bill does not change this. The additional requirement would create unnecessary additional burdens.

Noble Lords asked whether the clause complies with the Procurement Act 2023. As I said in my letter to all noble Lords, Clause 11 is limited to the direct award of net cost contracts, also called concession contracts, where the operator provides franchise services in return for the fare revenues. These contracts are exempt from the Procurement Act 2023—see paragraphs 21 and 37 of Schedule 2 to that legislation—and instead fall under the Public Service Obligations in Transport Regulations 2023, which the Bill is amending. Therefore, this clause does not impact on the Procurement Act 2023.

On the questions raised about there being more than one operator, this is a transition arrangement in order that the passengers involved, the customers of bus routes, and the operators get more certainty in the transition than might otherwise be the case. Clearly, the provision of direct award can be useful to authorities seeking to move to a franchising model both now and in the future. It also provides flexibility to stagger the full implementation of franchising, for example, tendering competitive franchise contracts at different times. It can be used only for the first franchise contract in an area to support the transition. Direct award contracts will have a maximum duration of five years, and in many cases a shorter duration will be appropriate. Long-term franchising contracts will be competitively tendered in the usual way. For clarity, in areas where there is more than one operator, only the incumbent operator can receive a direct award contract for the same or substantially similar services. It is uniquely placed to provide service continuity to passengers during this transition.

The amendment tabled by the noble Lord, Lord Moylan, and the noble Earl, Lord Effingham, would create unnecessary additional burdens on local and central government to complete the assessment. I therefore ask them not to press their amendment.

[Lord Woodley (Lab)]

I beg leave to withdraw the amendment.

Amendment 9 withdrawn.