Bus Services Bill (HL Bill 58)

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(a) the date specified under section 123H(2)(c), or

(b) a date specified under section 123H(3)(b),

is to be postponed (or further postponed).

(2) Before making such a decision they must (if possible) consult—

(a) 5persons operating local services who would, in their opinion, be
affected by the decision;

(b) other persons whom, in their opinion, it would be appropriate
to consult.

(3) Within a period of 14 days beginning with the date on which any such
10decision is made they must give notice of the decision—

(a) in such manner as they consider appropriate for drawing it to
the attention of persons in the area to which it relates,

(b) to all persons operating local services who would, in their
opinion, be affected by the decision, and

(c) 15to a traffic commissioner.

(4) The notice must include a statement of the reasons for making the
decision.

123J Effect of local service contracts: registration requirements and
provision of services

(1) 20Where a franchising scheme has been made, subsections (2) and (3)
apply as soon as the effective time of any local service contract to which
the franchising scheme relates is reached, subject to subsection (4).

(2) Sections 6 to 9 of the Transport Act 1985 (registration of local services)
do not have effect in relation to the area to which the franchising
25scheme relates.

(3) No local service may be provided in the area to which the franchising
scheme relates (if there is a stopping place for the service in that area)
unless—

(a) it is provided under a local service contract,

(b) 30it is an interim service (see section 123O), or

(c) it is provided under a service permit (see section 123P).

(4) If the scheme provides for scheme sub-areas, subsections (2) and (3)
apply in relation to each scheme sub-area as soon as the effective time
of any local service contract for the provision of a local service in that
35scheme sub-area is reached, as if references in subsections (2) and (3) to
the area to which the scheme relates were references to the scheme sub-
area.

(5) Subsections (2) and (3) do not apply in relation to—

(a) a local service which is excepted from regulation arising
40because of the proposed scheme by any provision of the scheme
that is made under section 123H(5), or

(b) the use of a vehicle under a permit granted under section 22 of
the Transport Act 1985.

(6) If it appears to a franchising authority that—

(a) 45a person is operating or has operated a local service in
contravention of subsection (3), and

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(b) in operating that local service, the person is failing or has failed
to take all reasonable precautions and to exercise all due
diligence to avoid contravening subsection (3),

the authority must inform a traffic commissioner.

(7) 5The effective time, in relation to a local service contract, is the beginning
of the day on which a local service may first be provided under the
contract (see sections 123K(4) and 123L).

123K Local service contracts

(1) If a franchising scheme covers the whole or part of the combined area
10of two or more franchising authorities, a local service contract for a
local service specified in the scheme is to be entered by the authorities
acting jointly.

(2) A franchising authority or authorities may only enter into a local
service contract with a person who is the holder of either—

(a) 15a PSV operator’s licence, or

(b) a community bus permit.

(3) But subsection (2)(a) does not include a licence to which a condition is
attached under section 26 of the Transport Act 1985 (power of traffic
commissioner to attach conditions to licences) prohibiting the holder
20from using vehicles under the licence to provide local services of all
descriptions or of any description to which the condition relates.

(4) A person may not provide a local service under a local service contract
until—

(a) the expiry of the period that, under the scheme, must expire
25between the making of the contract and the provision of the
local service under the contract (see section 123H(2)(d) and
(3)(c)), or

(b) such later time as may be specified in the contract.

(5) Subsection (4) is subject to section 123L.

(6) 30If—

(a) a franchising authority or authorities enter into a local service
contract, and

(b) the contract is—

(i) the first contract for the provision of a local service
35specified in the scheme that is entered into, or

(ii) for any scheme sub-area, the first contract for the
provision of a local service specified in relation to that
scheme sub-area that is entered into,

they must give notice of the contract to a traffic commissioner.

(7) 40A notice under subsection (6) must be given within a period of 14 days
beginning with the date on which the local service contract in question
is entered into.

123L Exceptions to section 123K

(1) A local service contract may specify as the time when a local service
45may first be provided under the contract a time before the expiry of
such period as is described in section 123K(4)(a), and that service may

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be provided from that time, if the authority or authorities determine
that action is urgently required for the purpose of—

(a) maintaining an existing service,

(b) securing the provision of a service in place of a service which
5has ceased to operate, or

(c) securing the provision of a service to meet any public transport
requirement which has arisen unexpectedly and ought in the
opinion of the authority to be met without delay.

(2) A determination under subsection (1) must be made at or before the
10time that the authority or authorities enter into the contract.

123M Variation of scheme

(1) The franchising authority or authorities operating a franchising scheme
may vary, or acting jointly may vary, the scheme.

(2) If the authority or authorities decide to vary a franchising scheme, the
15authority or authorities must—

(a) publish a notice of the decision, and

(b) give notice of the decision to a traffic commissioner.

(3) The notice of the decision must state the date on which the variations of
the scheme are to have effect.

(4) 20The date must fall after a period of six months beginning with the date
on which notice of the decision is published.

(5) The notice must be published, and notice must be given to a traffic
commissioner, within a period of 14 days beginning with the date on
which the decision was made.

(6) 25If a franchising authority are a mayoral combined authority, the
function of deciding whether to make a proposed variation is a function
of the combined authority exercisable only by the mayor acting on
behalf of the combined authority (including in a case where the
decision is to act jointly to vary a scheme).

(7) 30The references in subsections (1) to (6) to the franchising authority or
authorities in relation to a franchising scheme include a reference to a
franchising authority who are not operating the scheme but would do
so under a proposed variation.

(8) The variation of a franchising scheme is subject to the same procedure
35as the making of a franchising scheme, except that—

(a) the procedure may be modified or excluded in its application to
the variation of a scheme by regulations under section 123U,

(b) sections 123B, 123C, 123D and 123F(2) do not apply, and

(c) section 123G(3) does not apply.

(9) 40If the variation of a franchising scheme would involve adding an area
to the area to which the scheme relates, subsection (8) has effect in
relation to the variation but without subsection (8)(b).

123N Revocation of scheme

(1) The franchising authority or authorities operating a franchising scheme
45may revoke, or acting jointly may revoke, the franchising scheme.

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(2) The authority or authorities may revoke the scheme only if they are
satisfied that—

(a) local services in the area to which the scheme relates are likely
to be better if the scheme did not apply,

(b) 5the continued operation of the scheme is likely to cause
financial difficulties for the authority or any of the authorities,
or

(c) the burdens of continuing with the scheme are likely to
outweigh the benefits of doing so.

(3) 10If the authority or authorities decide to revoke a franchising scheme,
the authority or authorities must—

(a) publish a notice of the decision, and

(b) give notice of the decision to a traffic commissioner.

(4) The notice of the decision must state the date on which the revocation
15is to have effect.

(5) The date of revocation must fall after a period of six months beginning
with the date on which notice of the decision is published.

(6) The notice must be published, and notice must be given to a traffic
commissioner, within a period of 14 days beginning with the date on
20which the decision was made.

(7) If a franchising authority are a mayoral combined authority, the
function of deciding whether to make a proposed revocation is a
function of the combined authority exercisable only by the mayor
acting on behalf of the combined authority (including in a case where
25the decision is to act jointly to revoke a scheme).

(8) The revocation of a franchising scheme is subject to the same procedure
as the making of a franchising scheme, except that—

(a) the procedure may be modified or excluded in its application to
the revocation of a scheme by regulations under section 123U,
30and

(b) section 123G(3) does not apply.

123O Interim services and replacement services

(1) This section applies if—

(a) a franchising authority or authorities have entered into a local
35service contract with another person (“the operator”) about
providing a local service (“the original service”) for a period,
and

(b) the operator fails to provide the original service or ceases to
provide the original service before the end of the period.

(2) 40The authority, or any one of the authorities, may provide a local service
(an “interim service”) in the place of the original service or a part of it.

(3) Subsection (2) has effect notwithstanding any prohibition, restriction or
limitation on the power of the authority to provide local services
contained in any other enactment, apart from the restriction in section
4521 of the Bus Services Act 2016.

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(4) A franchising authority providing an interim service must have a PSV
operator’s licence to which no condition is attached under section 26 of
the Transport Act 1985 (power of traffic commissioner to attach
conditions to licence) prohibiting the authority from using vehicles
5under the licence to provide services of that description.

(5) A franchising authority may not provide an interim service after the
end of the period of six months beginning with the day on which the
authority begins to provide the service, subject to subsection (7).

(6) If—

(a) 10an interim service is provided, and

(b) the authority or authorities decide to enter into a local service
contract with another person for the provision of a local service
(a “replacement service”) that would replace the original service
or a part of it,

15section 123K(4) does not apply in relation to the provision of the
replacement service.

(7) If the authority or authorities enter into a local service contract for the
provision of a replacement service, the authority or the authority
providing the interim service may continue to provide it until the
20replacement service begins to be provided.

(8) An interim service or replacement service need not be identical to the
original service, or the part of the original service, that is replaced by
the interim service or the replacement service (and such a change is not
to be regarded as a variation of the scheme for the purposes of section
25123M).

(9) In this section “enactment” includes an enactment comprised in
subordinate legislation (within the meaning of the Interpretation Act
1978).

123P Service permits

(1) 30This section applies where a franchising scheme covers the whole or
part of the area or combined area of a franchising authority or
authorities.

(2) The authority or authorities, acting jointly, may grant a permit (a
“service permit”) authorising a person to provide a local service in the
35area to which the scheme relates.

123Q Application for service permit

(1) An application for a service permit authorising a person to provide a
particular local service in an area to which a franchising scheme relates
must be made in such manner as the authority or authorities operating
40the scheme may determine.

(2) An application must be accompanied by such information as the
authority or authorities operating the scheme may specify.

(3) If the authority or authorities so require, an application for a service
permit must be accompanied by a fee for processing the application of
45an amount that is determined in accordance with regulations made by
the Secretary of State.

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(4) Regulations under subsection (3) may specify the maximum amount of
the fee.

(5) The authority or authorities must grant the service permit applied for if
they are satisfied that—

(a) 5the proposed service will benefit persons making journeys on
local services in the area to which the scheme relates, and

(b) the proposed service will not have an adverse effect on any local
service that is provided under a local service contract in the area
to which the scheme relates.

(6) 10The authority or authorities may not grant the service permit applied
for if they are not satisfied as to the matters in subsection (5)(a) and (b).

(7) If the authority or authorities do not grant a service permit, they must
give notice of their reasons to the applicant within a period of ten days
beginning with the date on which they decide not to grant the service
15permit.

123R Conditions

(1) A franchising authority or authorities may publish a notice specifying
the conditions, or descriptions of conditions, that they may attach to a
service permit.

(2) 20A franchising authority or authorities may—

(a) withdraw a notice under subsection (1), and

(b) if an earlier notice under subsection (1) is withdrawn, publish
another notice under subsection (1).

(3) A franchising authority or authorities may only specify in a notice
25under subsection (1) conditions that are specified, or are of a
description specified, in regulations made by the Secretary of State.

(4) Regulations under subsection (3) may in particular provide for
conditions requiring holders of service permits to participate in
ticketing arrangements.

(5) 30Before the authority or authorities publish a notice under subsection (1)
(or withdraw such a notice), they must consult—

(a) persons operating local services in the area to which the scheme
relates, and

(b) other persons whom, in their opinion, it would be appropriate
35to consult.

(6) If a notice under subsection (1) is published, the franchising authority
or authorities may attach to—

(a) a service permit granted by them after the notice is published,
or

(b) 40a service permit already granted by them,

conditions, or conditions of a description, specified in the notice.

(7) If a notice under subsection (1) is withdrawn, conditions attached to
service permits granted by the franchising authority or authorities
before it was withdrawn cease to have effect (subject to being attached
45again under subsection (6)(b)).

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(8) If the authority or authorities grant a service permit with conditions,
they must give notice of their reasons for doing so to the applicant
within a period of 14 days beginning with the date on which they grant
the service permit with those conditions.

(9) 5If the authority or authorities attach conditions to a service permit after
it is granted, they must give notice of their reasons for doing so to the
holder of the service permit within a period of 14 days beginning with
the date on which they attach those conditions.

123S Revocation and suspension

(1) 10A franchising authority or authorities may revoke or suspend a service
permit granted by them.

(2) The grounds on which a franchising authority or authorities may
revoke or suspend a service permit are—

(a) that a matter in section 123Q(5)(a) or (b) is not satisfied as
15regards the service to which the service permit relates,

(b) that the holder of the service permit has failed to comply with a
condition attached to the service permit, and

(c) that the public would be endangered if the service continued to
operate.

(3) 20The Secretary of State may by regulations make provision about the
period of notice that must expire before a revocation or suspension
takes effect.

(4) The regulations may, in particular, enable a franchising authority or
authorities to revoke or suspend a service permit with immediate effect
25if the permit is revoked or suspended on the ground mentioned in
subsection (2)(c).

(5) A service permit is of no effect during a period of suspension.

123T Appeals

(1) A person whose application for a service permit is refused may appeal
30against the refusal.

(2) A person who is granted a service permit with conditions may appeal
against the attaching of the conditions or any of them.

(3) A person to whose service permit conditions are attached after the
service permit is granted may appeal against the attaching of the
35conditions or any of them.

(4) A person whose service permit is revoked or suspended may appeal
against the revocation or suspension.

(5) An appeal under subsection (1), (2), (3) or (4) is to be made to a traffic
commissioner.

(6) 40On an appeal under subsection (1), (2), (3) or (4), a traffic commissioner
may—

(a) uphold the decision,

(b) quash the decision, or

(c) substitute a decision for the decision made.

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(7) The Secretary of State may by regulations make provision about
appeals under this section including, in particular, provision—

(a) as to the time within which an appeal to a traffic commissioner
must be brought,

(b) 5enabling a traffic commissioner to hold a hearing,

(c) requiring a traffic commissioner to hold a hearing if requested
by the appellant,

(d) as to the time within which a hearing must be held, and

(e) as to the time within which an appeal must be determined.

(8) 10A person may appeal to the Upper Tribunal against a decision of a
traffic commissioner under subsection (6).

(9) For the purposes of section 13(2) of the Tribunals, Courts and
Enforcement Act 2007 (appeals to Court of Appeal etc against decisions
of the Upper Tribunal) the following persons are to be treated as parties
15to a case—

(a) the person who appealed under subsection (1), (2), (3) or (4),

(b) the franchising authority or authorities whose decision was
appealed, and

(c) a traffic commissioner.

123U 20Regulations about schemes

(1) The Secretary of State may by regulations make further provision with
respect to—

(a) the procedure to be followed when making, varying or
revoking franchising schemes,

(b) 25the local services or classes of local services which are to be, or
may be, excepted from regulation arising because of the
scheme, and

(c) such other incidental matters in connection with franchising
schemes as the Secretary of State thinks fit.

(2) 30The regulations may in particular make provision with respect to—

(a) giving notice of proposed schemes or the proposed variation or
revocation of schemes,

(b) modifications of such proposals,

(c) the form of schemes or variations, and

(d) 35giving notice of schemes which have been made or of the
variation or revocation of schemes.

(3) The Secretary of State may by regulations make further provision with
respect to service permits.

(4) The Secretary of State may also make regulations modifying or
40excluding the application of provisions of this Part, so far as relating to
franchising schemes, in cases where a franchising authority, or two or
more franchising authorities acting jointly—

(a) propose or decide to vary or revoke a scheme under section
123M or 123N, or

(b) 45having varied a scheme under section 123M, propose or decide
to postpone a date on which a local service contract to provide
a local service specified in the scheme may first be entered into.

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123V Transitional provision about schemes

(1) The Secretary of State may by regulations make such transitional
provision as the Secretary of State considers appropriate in connection
with—

(a) 5the making of franchising schemes,

(b) the application of section 123J in relation to an area (effect of
local service contracts: sections 6 to 9 of the Transport Act 1985
and provision of services),

(c) the variation of franchising schemes, and

(d) 10the revocation of franchising schemes.

(2) The regulations may in particular provide that in prescribed
circumstances—

(a) any provision of sections 6 to 9 of the Transport Act 1985
(registration of local services), or of sections 89 to 92 of that Act
15(obligation to invite tenders etc), which would otherwise have
effect is not to have effect or is to have effect with such
modifications as may be prescribed, or

(b) any such provision which would not otherwise have effect is to
have effect or is to have effect with such modifications as may
20be prescribed,

in relation to the whole or any part of the area to which the scheme
relates.

(3) Regulations made by virtue of subsection (2) may in particular provide
for the period in section 6(8)(a) of the Transport Act 1985 to be, for
25applications to vary or cancel the registration of services that have one
or more stopping places in the area to which a franchising scheme
relates, the period specified in a notice issued by the authority or
authorities that made the franchising scheme.

(4) The regulations may impose requirements in relation to notices issued
30as mentioned in subsection (3) that include (but are not limited to)
requirements—

(a) as to the time when the notice may be issued,

(b) as to the publication of the notice,

(c) as to sending a copy of the notice to a traffic commissioner, and

(d) 35as to the period, not exceeding 112 days, that may be specified
in the notice.

(5) Regulations made by virtue of subsection (2) may in particular provide
for cases where local services continue to be provided in an area under
local service contracts after a franchising scheme—

(a) 40is revoked, or

(b) is varied so as no longer to relate to that area.

(6) The regulations may—

(a) prohibit the registration of a service, or a variation of the
registration of a service, under section 6 of the Transport Act
451985 so far as the service, or the service as varied, would be
provided in that area, except in a case where the service, or the
service as varied, would be a service that, under the scheme as
it had effect before it was revoked or varied, could have been
provided in that area under a local service contract, and

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(b) require a traffic commissioner to register a service on an
application by a person who, immediately before the scheme
was revoked or varied, provided the same service under a
service permit.

(7) 5Any regulations made by virtue of subsection (1)(a) are not to have
effect in the case of any franchising scheme as respects any time before
the making of the scheme.

123W Guidance about schemes

(1) The Secretary of State may issue guidance concerning the exercise by
10franchising authorities of their functions under this Part in relation to
franchising schemes.

(2) Franchising authorities must have regard to any such guidance.

123X Local service contracts: application of TUPE

(1) Subsection (3) applies to a situation in which—

(a) 15at the effective time of a local service contract, local services
cease to be provided by a person (the “former operator”) in—

(i) the area to which the relevant franchising scheme
relates, or

(ii) in the case of a franchising scheme which provides for
20scheme sub-areas, the relevant scheme sub-area,

in accordance with section 123J(3), and

(b) at the same time, a person (the “new operator”) begins to
provide local services in that area under that local service
contract.

(2) 25Subsection (3) also applies to a situation in which—

(a) local services which, at the effective time of a local service
contract, a person (the “former operator”) would be required by
section 123J(3) to cease providing in—

(i) the area mentioned in subsection (1)(a)(i), or

(ii) 30the area mentioned in subsection (1)(a)(ii) (as the case
may be),

cease to be provided by the former operator before the effective
time of that local service contract, and

(b) at the same time as those local services cease to be provided by
35the former operator, a person (the “new operator”) begins to
provide local services in that area under an agreement which
the authority or authorities who made the relevant franchising
scheme entered into by reason of the cessation of the local
services referred to in paragraph (a).

(3) 40Any situation to which this subsection applies is to be treated as a
relevant transfer for the purposes of the Transfer of Undertakings
(Protection of Employment) Regulations 2006 (“TUPE”) (whether or
not TUPE would apply apart from this subsection).

(4) For the purposes of TUPE, the organised grouping of employees that is
45subject to the relevant transfer consists of those employees of the
former operator whose employment is principally connected with the