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Paul Clark: My hon. Friend is absolutely right. Those who have worked and been elected locally are the best people to deal with such matters and to make those judgments on behalf of the people whom they represent.

The hon. Member for Wimbledon also asked about TUPE and the extra costs. The costs would be reflected in the price that the operators bid. The local authorities clearly need to factor any such costs into their assessment of a proposed scheme—they must take them into account when working through the criteria. However, it is important to remember that applying TUPE will also deliver benefits. Having an existing, well-trained work force transferring to the quality contract operator will lead to savings and benefits. It is therefore sensible all round to protect the employees of companies that are not successful, but we should also remember that having such a qualified work force will be beneficial.

Ian Stewart: I am grateful to my hon. Friend for his patience. We are considering issues that are important to our constituents and to us as politicians. The TUPE regulations were originally intended to ensure that unscrupulous employers could not make workers redundant on a Friday and offer them a new contract, with lower terms and conditions, on a Monday. The Bill’s provisions on that matter are good and will hopefully remain when it becomes an Act.

Paul Clark: My hon. Friend is right that those provisions are some of the many good aspects of the Bill. He is also right about the purpose of TUPE.

Let me respond specifically to some of the amendments. Proposed amendment (a) to new clause 14 deals with the detailed workings of the QCS boards. It appears that it would do two things. First, it would place a further obligation on local transport authorities, to be fulfilled when they decide that they are ready to submit their proposals to the QCS board for consideration, to send to the board copies of documents that the authority sent out as part of the consultation or in response to it. Section 125 of the Transport Act 2000 already provides that the authority must publish notice of its proposed scheme at the outset of the consultation, and Government amendment No. 165 would provide that the notice must be copied to the senior traffic commissioner. That notice must describe the proposed scheme and state where a copy of it and the consultation document may be inspected. The purpose of having the notice copied to the senior traffic commissioner is that, when he designates the commissioner who is to chair the relevant QCS board, he can also ensure that that commissioner has access to the local authority’s consultation materials.

Amendment (a) also refers to documents that the local authority sends out during or after the end of the consultation period in reply to written responses from consultees. We consider that the local authority will have a clear interest in ensuring that the QCS board is aware of any such documents, as they are likely to be important in spelling out the local authority’s case for proceeding with its proposed scheme. I am therefore not persuaded that we need to make explicit provision for that, but I would be happy to reflect on the matter further as I develop more detailed proposals for regulations and guidance that will support the quality contracts scheme provisions in the Bill.

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The second effect of amendment (a) to new clause 14 would be to insert another new requirement for local authorities. The amendment would mean that if, having consulted on its scheme and reflected on the consultation responses, the local authority wished to proceed with its proposed scheme, it must send a copy of the consultation document to the QCS board. Again, that is quite unnecessary, because the Government amendments already make provision for the consultation materials to be disseminated to the QCS board via the senior traffic commissioner. The Government amendments also include provisions requiring the authority to supply the board with information about all the responses that it has received and to ensure that the board has before it a copy of the final proposals for the scheme before it begins its deliberations. Our amendments therefore already provide for the board to have all the information that it needs.

Ms Angela C. Smith: My hon. Friend is very generous in giving way. Will he elaborate a little on exactly how widely integrated transport authorities will be expected to consult, in order to lay to rest any concerns that people might have about the quality of consultation on the schemes that is provided for in regulations?

Paul Clark: I thank my hon. Friend for her intervention. There is a clear duty to consult all interested parties on the proposals and schemes being considered. It would be most bizarre if an authority did not use the option to consult, for example, bus operators, bus users and businesses in its local area and to follow that through. Again, however, we believe in allowing local bodies to decide how best to pursue those options in the consultation procedure.

The Opposition’s amendment (b) to new clause 14 relates to the actions that a QCS board may take if it considers that a proposed scheme does not meet the statutory public interest criteria. New clause 14 already makes it clear that in such circumstances the board may make recommendations on the actions that the authority or authorities might take in response to that opinion. New clause 14 is not prescriptive about the recommendations that a QCS board might make.

The Government would normally expect a QCS board to take a constructive approach. Where a board identifies defects in a scheme, the constructive approach would be to offer suggestions to the local authority as to how it might remedy them. It is unlikely that, having invested a great deal of time and effort in developing and consulting on proposals, an authority would submit to a QCS board a proposed scheme that was so defective that it was beyond salvation. If that very unlikely situation were to arise, I suppose it might be appropriate for the QCS board to say so, but there is no need to amend the Bill to empower the QCS board to do so. The provisions in proposed new clause 126AC(2) are already sufficiently broad to cater for that most unlikely outcome.

Norman Baker: I agree with the Minister’s analysis, but does he think it would be helpful for local authorities to avoid any pitfalls by discussing the scheme informally with the QCS board before its submission, or does he think that the two processes should be separated so that there is no prior consultation with the QCS board, informally or otherwise?

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Paul Clark: I thank the hon. Gentleman for his intervention. I have said clearly that those who propose the scheme should use every option to ensure that they consult. As I said in response to an earlier intervention about the time process, local transport authorities will take time to develop a scheme. Depending on a scheme’s complexity—for instance, it could be a city-wide scheme or a more localised scheme—it will obviously take time for it to be ready and presentable. I therefore assume that authorities would use every option to ensure that they have consulted as widely as possible.

6.15 pm

Amendment (c) to new clause 14 relates to the actions that a QCS board might take if it considered that an authority had failed to follow the statutory requirements about notice and consultation. Again, new clause 14 already provides that the board may make recommendations on how the authority might address the apparent failure. In addition, amendment (c) would provide a power for the board to direct the local authority to take particular actions. However, I fear that the amendment rather misses the point of the Government new clauses and amendments that we are debating. The purpose of the changes that we are proposing, following lengthy debate in Committee—again, we listened—is to place decision making in the hands of elected local authorities. In that context, it would be inappropriate for a QCS board to have a power to direct a local authority.

Let me turn to the Opposition amendments to new clause 15. Amendments (a) and (b) seek to amend the grounds on which an appeal may be brought before the Transport Tribunal. I have already explained that under new clause 15 the grounds for appeal would depend on whether the QCS board had, in effect, given the final version of the scheme a clean bill of health. Where the board, which after all will be independent of both central Government and the local authorities, has examined the facts of the case and given that clean bill of health, the Government consider it entirely appropriate for the onward right of appeal to the tribunal to be limited to points of law, as was discussed earlier. That would enable an appeal to be brought on grounds that, for example, the authority had acted unreasonably in deciding to make the scheme, had acted with bias or had fettered its discretion. There would therefore be a clear safeguard in the most unlikely event of a QCS board failing to identify a major flaw in the authority’s proposal.

However, where the final version of the scheme had not received a clean bill of health from the QCS board, an appeal could be brought either on points of law or questions of fact. That would enable a full-case review. The Government consider those proposals to provide an entirely appropriate level of protection, while avoiding unnecessary stages in the process, which after all could delay the implementation of schemes that are manifestly in the public interest.

Norman Baker: The Minister just used the phrase “a full-case review”, but will he be absolutely clear about that? My understanding was that the Transport Tribunal’s role in investigating any appeal where there was a division between the QCS board and a local authority would be limited to matters of disagreement between the two bodies. Is the Minister saying that it would be possible for the Transport Tribunal to reopen the whole case even when the QCS agrees with the local authority?

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Paul Clark: No, that would not be possible where the QCS agreed with the local authority. If the scheme had failed on the five public criteria test, it is likely that issues would arise that cut across a number of those criteria, which would therefore be open to a review through the appeals process. There would be knock-on effects where there was a problem with those public criteria.

Norman Baker: If the point of disagreement between the QCS and the local authority concerned only one criterion, for example, would the Transport Tribunal be limited to considering that one criterion, or would it conduct what the Minister referred to as a full-case review?

Paul Clark: No. My thought was that a cutting across over a number of those criteria would be likely, but if the disagreement was confined to just one, that would be the issue for an appeal. The hon. Gentleman is right in that sense.

Amendments (c) and (d) to new clause 15 would amend the powers of the Transport Tribunal to deal with an appeal. New clause 15 includes a power under which, in certain circumstances, the tribunal could quash the local authority’s decision to make a scheme. But, as with QCS boards, the Government envisage that the tribunal would seek to take a constructive approach by proposing solutions to remedy any defects in a scheme, where such solutions could be identified. That is why new section 127B(5) limits the tribunal’s power to quash a scheme, so that it may be exercised only in situations where the scheme cannot be varied to put things right.

Having spoken at some length on the amendments to new clauses 14 and 15, I now turn back to amendments (a) to (j) to new clause 9, which relate to the proposed “operator of last resort” powers. I should start by reminding the House that the purpose of new clause 9 is to provide a very limited power for local authorities to take action, in a specific emergency situation, to protect the interests of bus passengers—the people at the heart of the Bill. The power would apply only where a quality contract operator was unable to operate the services that it had contracted with the authority to provide. In such a situation, it is possible that the only way to ensure continuity of services to passengers would be for the local authority to step in.

This is absolutely not a generalised power for local authorities to get into the business of running bus services. It is a very tightly limited power, and it includes clear limits on the time period for which an authority may exercise it. The time limits proposed in new clause 9 are intended to ensure sufficient time for the local authority to find a longer-term solution to the unexpected gap in service provision, while ensuring that the local authority cannot exercise those powers over an indefinite period.

A number of hon. Members, including the hon. Member for Lewes (Norman Baker), have asked what would happen after 12 months. As an operator of last resort, we cannot provide services after a 12-month period. I have already said that if a local authority cannot find a contractor to run the services within that 12-month period, it probably never will. At that point, there has to be an alternative way forward. There has to be an incentive for all concerned to deliver services in
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the way that we want, using the various options that are open to them. It would therefore be wrong to extend the 12-month period. If we extended it for another three months, why should we not extend it for another six or beyond? We believe that the provisions for nine months, plus three months, will be able to meet the requirements in all circumstances. If they do not, it is unlikely that an authority will ever find an operator to tender for that service.

Graham Stringer: Obviously, any time limit will be arbitrary. A line has to be drawn somewhere when dealing with my hon. Friend’s basis for having an operator of last resort. Does he not accept, however, that if two major operators—which might or might not be involved in a future quality contract—were involved in a legal dispute, either with each other or with the integrated transport authority, the time taken might extend beyond 12 months? In those circumstances, there might be no incentives for any other bus operator to come into that area.

Paul Clark: There would, of course, be an incentive for the local transport authority, as it would have been charged with providing those services for the bus passengers to whom it was responsible. I have genuinely tried to find out whether there is any belief that this process would be likely to succeed if it went beyond the 12-month period. My conclusion, following the discussions that I have had over the past three weeks, is that it is highly unlikely, and that we should need to find an alternative solution.

Norman Baker: May I suggest a way forward? We all understand that the Minister does not want to give local authorities carte blanche indefinitely. A solution might be to give the traffic commissioner further authority to extend the process beyond the three months. The commissioner, an independent person, might be able to pick up on unforeseen circumstances and say, “Yes, given that there are circumstances that we cannot foresee today, there might be a case for extending this for another month.” That could be the safeguard that the Minister is looking for.

Paul Clark: The hon. Gentleman will be aware that we have already given the traffic commissioner the power relating to the three-month extension, but his suggestion would almost take us into the game of finding a further extension. It is a question of where we draw the line. All the advice that we have received is that the process should be well on the way, if not complete, after nine months. That is why we have allowed three further months to allow for the possibility of it going beyond that time.

Ian Stewart: I think that my hon. Friend has got the drift of this. The rationale that he has put forward has been clearly understood on both sides of the House. However, I am worried about the unknown and unexpected things that could happen at the end of the 12-month period. I have asked him to revisit his thinking on this matter before Report, and I again ask him to do that.

Paul Clark: I understand what my hon. Friend is trying to achieve. However, if I am to revisit the matter before the end of Report, I shall have to move extremely
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quickly to do it before 9 o’clock. I ask hon. Members to accept that we have recognised the issue of the operator of last resort, because we think that that was a powerful argument. That is another instance of our listening to the arguments that were made in Committee and by those who are seeking to deliver these services. We have taken the point on board. I ask all hon. Members to accept that we believe that nine months, plus an option of three months, is the way to ensure that we continue to provide services to the travelling public in the event of an unexpected gap. It should be remembered that this provision applies only in those circumstances.

Rob Marris (Wolverhampton, South-West) (Lab): It might be that I do not understand new clause 9. Will the Minister talk me through the scenario that was adverted to by my hon. Friend the Member for Manchester, Blackley (Graham Stringer), in which an authority issues an invitation to tender within the appropriate time frame but no one tenders? According to new clause 9, this will be covered in subsections (4), (5) and possibly (6) of proposed new section 132D, but I confess that I do not understand what the time frame is to be. If a tender is issued but nobody bids, how long will the emergency, or interim, service keep going?

Paul Clark: This provision is for a time-limited period of nine months, plus three months as a further option, to get the contracts in place. Under the scheme, there is a period of time for the contract that was running, so it would be for the remainder of that period that this would run. That is why I believe that if there were a problem with the tendering, there would also be a wider issue that needed to be dealt with.

Amendments (e) and (f) appear to be getting at a slightly different issue. They seek to insert references to quality partnership schemes into new clause 9. The idea seems to be that, if a quality contract operator were unable to continue operating his services, the local authority might seek to fill that gap with a quality partnership scheme. But such an arrangement is wholly unworkable. The whole point of quality contracts schemes is that bus services falling within them are to be provided under quality contracts. I simply cannot see how the authority could superimpose a quality partnership scheme on top of an existing quality contract scheme. Furthermore, a quality partnership scheme involves the provision of facilities by the local authority, and bus operators wishing to use them must deliver an improved standard of service. I simply cannot see what hon. Members are seeking to achieve through these amendments other than attempting to wreck a sensible set of existing powers.

Amendment No. 5 simply states the obvious. It is a requirement, under clause 19 as drafted, that a proposed scheme bring benefits to people using bus services by improving the quality of the service. Clearly, the requirement must be judged against some other scenario, and the only reasonable and realistic one is to do exactly what the amendment says—to compare the expected benefits of a quality contracts scheme with what would be expected if things carried on without a scheme. Indeed, that is what the guidance will advise. That is not quite
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the same as saying that the effects of the scheme must be compared with the status quo, because in some cases it would be clear that, if no changes were made, services would be cut, passenger numbers would fall and we should be into a downward spiral.

6.30 pm

The effect of amendment No. 6 would be much more substantive than that of amendment No. 5, because a quality contracts scheme could not be made if there were any adverse effects on any bus operator or anybody living or working in the area. I think that anyone who understands the public transport industry or who has had to respond to correspondence from the public about bus or rail services will know that that condition is impossible to meet—or as good as impossible. Virtually any change in the pattern of service routes or timetables, however well planned and however well intended, will inconvenience somebody or other—even if it brings great improvements for the vast majority. That applies just as much to franchised rail services as it does to deregulated bus services, and it is just a fact of life.

Amendment No. 7—another amendment proposed by the hon. Member for Wimbledon—is more perplexing. It appears to remove discretion from the local transport authority about how it would publish a consultation document, but it does not prescribe how it should be done. In the absence of anything further, the local transport authority could do only what it thought fit, having regard, of course, to the statutory guidance. The Government believe that local authorities can be relied on to take a reasonable view to how consultation documents should be published; it is something that they do all the time.

Amendment No. 8 would require the local transport authority to send copies of the consultation document to various specified people or classes of persons. That is over and above the list of statutory consultees specified in the Transport Act 2000. The guidance that we are proposing can supplement the statutory requirements on local authorities, without obliging them to follow it to the letter in every single case. We published this guidance in draft in December, but we will consult on a revised version of the quality contracts scheme volume around the turn of the year, taking into account a number of points made in debates both here and in the other place. The guidance will certainly highlight the need to ensure that bodies representing disabled people are properly consulted.

Rob Marris: Does the Minister view amendment No. 8 as almost a wrecking one, as under (c)(iii), all the consultees have to be

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