Supplementary memorandum submitted by
the Community Transport Association
INTRODUCTION OF
MORE APPROPRIATE
REGULATION FOR
COMMUNITY TRANSPORT
OPERATORS
Previous documents from the Community Transport
Association have proposed revisions to S19 and S22 legislation.
This document has been prepared, incorporating
the previous comments in a revised format at the request of the
DfT officer responsible. Several new features have been added
to extend the considerations to a wider number of options.
1. INTRODUCTION
The Review of Voluntary Transport (DETR, 1999
section 5.14 and 5.15) highlighted the inflexibilities of the
current regime and recommended that the minibus permit system
be updated. The CTA believes that the complexities are both confusing
for existing operators and a barrier to the development of new
projects and services, which is adversely affecting the ability
of community transport providers to meet today's needs.
In particular, the Review suggests enabling
the use of paid drivers on S22 Community Bus schemes and opening
up the S19 system for use by a wider fare paying public (where
there is a lack of adequate commercial passenger transport provision).
The report suggests the possibility of a single permit system
for voluntary transport.
There are essentially two very different options
for overhauling the system of S19 and S22 permits:
— Adjustments to the existing two-permit
regime—by amendments to sections 19-23 of the 1985 Act (and
consequent regulations).
— A new unified regime, allowing paid
drivers to be used on non-profit services for the general public.
2. "NEW
PERMIT REGIME"
The Department may have a view of which particular
portion of the legislation would afford the required result in
the most legally effective way, but the net effect of any of the
above changes would be to produce a "new permit regime".
As with any legislation change the issue of
transition from one set of rules to another needs to be considered.
Retaining both section 19 and section 22 in their current form
would enable community transport operators to migrate to the new
permit regime. This may also facilitate certain permit operators
continuing to use the existing rules.
Certain sections in this paper do, however,
suggest more detailed changes to the existing permit rules. These
should be considered as part of the review.
3. PAID DRIVERS
ON MINIBUSES
Section 19 permit holder organisations are allowed
to pay drivers, whereas section 22 permit operators must use volunteers.
The CTA continues to call for the use of paid drivers on section
22 Community Bus schemes and opening up the section 19 permit
operations so that, where appropriate, they can be used by a wider
fare paying public.
Alternatively this requirement could be met
by a new permit regime that would allow the use of paid drivers
on community transport services for the general public.
These revised arrangements would encourage further
local authority investment in CT services, especially in areas
where a commercial tender is unlikely to be cost effective or
sustainable.
For this to happen, it would be important that
any new regulations would still allow paid CT drivers who passed
their first driving test before 1997 to drive such services without
needing PCV entitlement. Drivers who passed their test after January
1997 will require PCV licences in order to undertake any paid
work. It may be useful to specify a minimum level of driver assessment
and training as provided under the CTA UK-wide MiDAS scheme.
4. CARS AND
MPVS
The current situation where CTs have to operate
cars and MPVs under "car sharing legislation" (section
1(4) of the Public Passenger Vehicles Act) leads to confusion
and misunderstanding. Issues include the variation in fares so
that the total fares paid by passengers do not exceed the costs
for individual journeys and the fares paid by passengers cannot
be used to support the wages of drivers.
Allowing permits to be applied to small vehicles
(less than nine seats) would resolve this issue. A PSV "O"
licence operator is allowed to use their operator's disk on smaller
vehicles and although there have been specific difficulties with
this arrangement, it has proved to be a viable option.
This would allow group transport projects to
develop the use of smaller vehicles, especially but not exclusively
in rural areas.
This type of vehicle is increasingly likely
to be used for demand responsive transport schemes, due to the
January 1997 driving licence change that is causing more difficulties
in recruiting or training qualified drivers with a PCV driving
licence.
5. BUSES WITH
MORE THAN
16 PASSENGERS
Existing section 22 legislation does not allow
vehicles with more than 16 passenger seats to be operated. The
new permit regime should also allow larger vehicles (more than
16 passengers) to be operated. It is accepted that drivers of
larger buses would require full D entitlement.
6. NOT-FOR-PROFIT
OPERATIONS
It is a fundamental issue for community transport
operators that they are not attempting to make a profit in terms
of their overall operations. This is confirmed by having no shareholders
and no mechanism to use any surplus funds for anything other than
the core services that they exist to provide.
Nevertheless, in running an undertaking that
needs to secure expensive assets (minibuses) and have sufficient
funds to deal with unexpected outcomes (breakdowns, employer obligations,
etc) a reserve of funds is essential.
Previous legislation has attempted to enshrine
not-for-profit into legal phases and this has caused difficulties
that now need to be addressed. Some specific difficulties are
listed in paragraph 7 below. New wording is needed to define community
transport as "a not-for-profit organisation" separating
such operators from those operating with a view to profit.
7. INCIDENTAL
TO PROFIT
Current section 19 legislation uses the phrase
"Incidentally to an activity which is itself carried on with
a view to profit". This phrase is too generalised. It prevents
sensible arrangements on sponsorship and other partnerships with
the private sector.
One area of difficulty is in working with commercial
care homes, nurseries, after school care and children's activity
centres. The CTA believes that it should be possible for community
transport operators to provide transport for the clients of such
businesses providing there is no deliberate arrangement to increase
the profitability of the businesses concerned. Currently the clients
are eligible to use CT services whilst the businesses are not.
This change should allow invoicing directly to the businesses
instead of to their clients.
The current arrangement also restricts the ability
of supermarkets, commercial sport facility operators, and other
organisations from funding transport to their establishments because
they would, theoretically, make additional profits from doing
so. This restriction needs to be relaxed to enable commercial
facility owners to fund the transport for people with limited
mobility, who cannot access mainstream public transport, for any
reason, to travel to these facilities. If this change of regulation
is thought likely to raise objections from commercial transport
operators, it is suggested that the test of legality of any commercial
funding should be that the transport service is provide on a not-for-profit
basis.
Although other restrictions apply (OFT) to working
with other commercial operators, mechanisms exist to allow community
transport to provide feeder services, etc. to mainstream transport
services. This is an obvious use of community transport but a
very limited number of examples have occurred, even though a section
19 permit would allow services to isolated communities. The phrase
in section 19 also restricts such co-operation and changing it
would send a clear message that such co-operation is to be encouraged.
Ideally, the restriction should simply be not-for-profit
bodies. The phrase in section 22 "without a view to profit,
either on the part of that body or anybody else" is more
appropriate than the current S19 prohibition on operating "incidentally"
to a profit-making activity if any restriction needs to remain.
8. SERVICES FOR
THE GENERAL
PUBLIC—NON-REGISTERED
SERVICES
CT operators could provide non-registered services
for the general public, such as services taking people to work,
to training, and access to health. This should also allow demand-responsive,
but non-registered services in areas where—and at times
when—there is no public transport service.
9. SERVICES FOR
THE GENERAL
PUBLIC—REGISTERED
SERVICES
CT operators should be able to provide registered
services (as section 22) for transport authorities. The new permit
regime should allow routes to be registered and tenders to be
submitted for supported services.
10. LEGAL SANCTION
FOR BROKERAGE
ARRANGEMENTS
Section 19 rules and the new permit regime should
specifically allow the issue of "umbrella group" permits
so that a CT group could manage the logistics of vehicle operations,
any affiliated group could then operate under the same permit.
Community transport groups are currently managing
this issue by affiliating other community groups as part of membership
scheme, then using the—"class A members of your organisation"—in
the section 19 permit legislation to provide transport for other
community groups. This is unsatisfactory and causes confusion.
Vehicle sharing is widely recognised as a cost
effective way of making best use of the expensive assets in the
voluntary sector—minibuses.
11. SCOPE AND
APPLICABILITY OF
NEW PERMIT
REGIME
The scope of any changes in legislation should
be restricted to not-for-profit organisations. Such status should
include:
— Registered Charities in England and
Wales (including the new CIC proposed bodies).
— Bodies registered with Inland Revenue
as charities in Scotland and Northern Ireland (Including the new
proposals for charity registration in both countries).
— Wholly owned subsidiaries of the
above who have a legal document specifying that any profits would
be gift aided to the parent body.
— Industrial and Provident Societies.
A central register of such bodies should be
maintained with a process designed to check the validity of each
application and deal with appeals from any source concerning the
validity of a particular organisation. This could be included
with other record keeping proposed below. The Community Transport
Association, which is currently funded by the DfT, could provide
this service to both Westminster and devolved administrations.
12. RELATIONSHIP
WITH COMMERCIAL
SECTOR
In general, the type of services that could
be operated by community transport would not clash with commercial
bus companies' desire for profit making. When and if it does,
the conflict should be dealt with as follows.
— Where the service results from funding
provided by a public body, the community transport operator should
show that the costs associated with the service are fully recouped
from the funding provided. The funder should be given guidelines
to make this assessment. These can be provided by the CTA in consultation
with the commercial operator's trade organisation (CPT). Guidelines
from the Charity Commissioners make it clear that charities should
not use charitable money to subsidise services for local or national
governments.
— Where the service is provided by
the community transport organisation by using funds that have
provided a surplus from other activities, there should be no requirement
to show a cost breakdown. The only options open to the commercial
operator should be to inform the community transport operator
that they are prepared to run the service at a lower cost.
— Where the service is provided as
a direct result of a financial contribution from a non-public
body, this shall be treated as a contractual relationship that
can only be changed at the appropriate time by the commercial
company offering to complete the work at a lower cost.
13. SECTION 19
PERMITS AND
CONTRACTS
Considerable confusion exists concerning when
section 19 operators can bid for home-to-school and social services
local authority contracts. The UK is divided into two camps with
local authorities taking opposing decisions in adjacent counties.
The UK government may have little power to influence
local government contract conditions, but a simple process is
required to enable community transport organisations to challenge
contract conditions which unfairly penalise the voluntary sector
and are not consistent with the requirements on councils to obtain
best value, particularly when best value is considered against
the overall requirements within councils, joining together the
various departmental needs. For example it may be "best value"
for a council to allocate home-to-school work and regeneration
work to the same CT operator even though, taken in isolation,
one of the contracts could be more expensive than a competitor.
It should be made clear that section 19 permit
holders, and holders of whatever new permit regime is introduced
can tender for local authority contracts.
14. SECTION 19
PERMITS—PURPOSE
OF JOURNEY
Legislation effectively restricts the purpose
of journeys on a section 19 minibus—Education, Religion,
Social Welfare and Recreation. The 2002 Advice note extended the
criteria to include people who cannot use public transport and
do not have access to a car. This is only one aspect of social
exclusion, which is defined as what can happen when people or
areas suffer from a combination of linked problems such as unemployment,
poor skills, low incomes, poor housing, high crime environments,
bad health and family breakdown. A clearer position would be to
include "social exclusion" as a further legitimate purpose
within the context of section 19 if this permit system is to remain.
15. COMPETENCE
OF STAFF
WORKING FOR
APPLICANT BODY
UNDER NEW
PERMIT REGIME
The requirement for a Certificate of Professional
Competence would be inappropriate for the new permit regime. The
cost of obtaining this certificate (over £600 in some cases)
is a barrier to the CT sector providing public services.
The need for operator's staff to have sufficient
understanding of legislation and to know where additional information
can be found is still valid.
CTA proposes that a new, more appropriate qualification
should be developed, in conjunction with GoSkills, the Sector
Skills Council for the passenger transport industry, for community
transport operators.
It is suggested that any documentary output
from the DfT should mention this development without placing any
time limit on its implementation.
16. NEW REGIME
PERMITS ISSUING
PROCESS
The current situation where Section 19 permits
are issued by numerous bodies creates a lack of focus on quality,
safety and legality of operations.
In Northern Ireland, the Community Transport
Association issues the equivalent to the section 19 permit and
it is suggested that this should apply to the rest of Great Britain.
The cost of issuing new regime permits should
be kept to a minimum. However, standards within the sector need
to be maintained and it is proposed that new regime permits should
be time limited. Five years would be a compromise between the
"cost minimisation" and "standards keeping"
criteria. The licence should involve a single fee for the five-year
duration, with each disc priced to cover administrative costs
only.
17. MAINTENANCE
REQUIREMENTS
This aspect of the current section 19 permit
causes the biggest number of issues with the commercial sector
operators. They claim that, although the recommendations for maintenance
processes are similar, they have the added enforcement mechanism
of the VOSA inspectors.
CTA recommends that community transport operators
should undertake regular safety inspections in accordance with
the VOSA's Guide to Maintaining Roadworthiness and require a statement
that this will be done before any permit is issued. However, we
are aware that other section 19 permit issuing bodies do not require
such an undertaking.
It is proposed to address this issue with a
self-declaration audit system. Operators involved should be required
to forward to the permit issuing body (CTA), an annual audit sheet,
which demonstrates that they are complying with the recommendations
on maintenance, safety inspections and other related matters.
This could also include a defect reporting system, daily driver
inspections, MOTs and Insurance. The sheet would require an affidavit
style signature to ensure that operators met the requirements.
CTA would be able to influence companies involved
in insuring minibuses by offering an open record of those operators
who had not completed the required audit form.
Operators involved in civil cases that questioned
their duty of care would also be able to obtain from CTA a statement
confirming that audit requirements had been met. This would be
an additional incentive to complete the process correctly.
The experience of community transport operators
in dealing with VOSA staff suggests that inspectors and their
supervisors require additional training in community transport
legislation, etc.
18. FINANCIAL
STANDING
This is used in the current PSV operator legislation
as a rudimentary measure of the operator's ability to maintain
vehicles.
It is not appropriate to the community transport
sector for several reasons.
Most not-for-profit organisations normally run
on the very minimum of reserves. Several funders penalise community
transport operators for having surplus funds because the level
of the surplus is deducted from future funding grants. It is known
that several small operators show compliance with this piece of
legislation by obtaining bank overdraft facilities. This does
not achieve the objective of the legislation because the bank's
money is available but is unlikely to be drawn down because of
the high interest payments that would then apply.
If some form of financial standing is required
for the new permit regime, CTA could provide guidance on obtaining
such a bank loan arrangement. The end result being that all community
transport operators have to pay simple cost element to cover the
arrangement fee.
24 May 2006
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