Question to the Department for Transport:

To ask the Secretary of State for Transport, what plans the Government has to relax section 19 or section 22 licences for charities or community-interest-companies, such as Weardale Community Transport, to enable those organisations to run services for social benefit that enable them to cross subsidise free community services.

The Government understands that community transport operators provide vital services that both encourage growth and reduce isolation by linking people with their communities, helping take them to shops, work, school, and medical appointments.

There are a number of requirements which need to be fulfilled in order to operate under a section 19 or section 22 Community Transport permit. One of the potential exemptions from legislation for ‘not-for-profit’ organisations is that the operator provides transport services for exclusively non-commercial purposes.

A judgment from a Judicial Review made clear that where an operator provides road passenger transport services simply for the purpose of generating surpluses to fund other transport or non-transport activities, the operator does not fall within the exclusively non-commercial purposes exemption.

However, cross-subsidies are not completely precluded. For example, if an operator providing rural bus services is doing so for the sole purpose of social welfare, then the fact that some routes are profitable whilst others are not, does not prevent it from falling within the non-commercial purposes exemption, despite an element of cross-subsidisation between different routes.