Issues relating to the licensing of taxis and private hire vehicles

Written evidence from Reigate & Banstead Borough Council (TPH 43)

Summary

The Local Government (Miscellaneous Provisions) Act 1976 (hereon 'the 1976 Act') gives Local Authorities the ability to licence the operators of private hire vehicles. We believe the wording of the 1976 Act is open to interpretation as to whether Local Authorities can licence operators outside of their own boundaries. Whilst this Authority has taken the view that we will not licence outside of our boundary, an Authority two districts distant has licensed a premises within our district to operate private hire vehicles and drivers licensed by that Council. The concern is that the operator licensed by this remote Licensing Authority has bypassed locally set conditions and policies, set with local considerations in mind. The operator also has a large number of private hire vehicles and drivers that are licensed by this same remote authority, and these vehicles and drivers are similarly not the subject of locally set licensing conditions and policies.

Furthermore, in licensing premises remotely it is possible that the Local Authority concerned may be disadvantaged in any enforcement action it may need to take, particularly considering that it will not be able to prosecute for offences that occur outside its own boundary. By licensing remotely the Licensing Authority concerned, as well as those operators, drivers and vehicle proprietors it licences remotely, may obtain a financial advantage with respect to the fees for licensing. If the above principles are followed there would appear to be no restriction on local authorities agreeing to licence operator’s vehicles and drivers anywhere in the UK. Operators may then choose to apply to the authority that has less restrictive trade entry conditions and minimal fees to the detriment of both the local authority and travelling public

We believe Private hire operators outside of London should be able to subcontract bookings to other licensed operators outside their own district, as London operators currently can. This current disadvantage to operators outside London is due to the two areas being subject to two different Acts.

District councils licensing operators of private hire vehicles outside their own district

1. Reigate & Banstead Borough Council in Surrey is two districts distant from a district that for this report will be referred to as District X . In the borough of Reigate & Banstead an operator trading from premises in Horley has been licensed to operate private hire vehicles by both Reigate & Banstead B.C. and District X. Private hire licensing at District X is dealt with from offices which by road are approximately 47 miles away from Horley.

2. The 1976 Act allows for differences of opinion as to whether a Local Authority can, or should, licence outside their boundary, and these arguments are available as background papers [paragraphs 9 to 12]. However, there is no case law on this subject so differences of opinion remain. Case law on related subjects though appears to give support to the view that the proper interpretation of the 1976 Act is to provide each Authority the ability to exercise full control over private hire operators in its area [available as background papers, paragraph numbers 13 to 17 below]. This is not possible if one authority grants an operators licence in another authority’s area.

3. Reigate & Banstead Borough Council borders Greater London to the North, and has Gatwick airport situated to its South. District X does not border London, but borders the English Channel to the South. Each authority will have independently set their licensing policy to reflect the needs of local residents, taking into account local factors. The concern is that the operator in question, by being licensed by this remote Licensing Authority, has bypassed the locally set conditions of the district in which it operates. The operator subsequently operates a large number of private hire vehicles and drivers that are licensed by this same remote authority, and these vehicles and drivers are similarly not the subject of locally set licensing conditions and policies.

4. In licensing the Horley premises remotely there are concerns that District X may be disadvantaged in any enforcement action they may need to take, in that they may not be able to prosecute for offences that occur under the 1976 Act outside its own boundary. There are also concerns that an incident could occur which would require investigation, and that the current situation could result in confusion as to which licensing authority would take responsibility.

5. Concerns have also been expressed by locally licensed private hire drivers that District X may not be able to afford the same level of monitoring and enforcement of the drivers and vehicles they have licensed operating outside their own district given the significant distances involved. Local information received suggests that the operator in question operates most of his vehicles outside of the District X area; however this licensing authority has not been able to confirm this.

6. It should be noted that at one point the operator in Horley was licensed at the same premises by four separate licensing authorities, and operated private hire vehicles licensed by each of these authorities. Whilst this allowed the operator a number of advantages, it undermined this Council's ability to regulate private hire work in our own district. Drivers and vehicle proprietors were getting licensed with whichever authority was convenient to them, and this resulted in vehicles and drivers being required to meet a variety of different standards in order to be licensed, and then being subject to a variety of conditions once the licence was granted. Whilst the situation has now improved, with the respective premises only being the subject of two private hire operator licences, it remains our view that the current situation is problematic.

7. Reigate & Banstead Borough Council licences a holiday operator that provides private hires vehicles nationally as part of their holiday package. All the vehicles and drivers they use are licensed by our authority, even though they may be used in remote areas. Case law has shown this to be a proper licensing arrangement, though we are aware that it could appear that the concerns we express above relating to enforcement being conducted at a distance may equally apply to this operator. However, the distinction in our view is that case law has shown the arrangement with respect to the holiday operator to be clearly lawful, and the holiday operator has its head office based entirely within our district, and that we are therefore best situated to consider any problems that may arise with respect to that operator. Whilst offences relating to the driver and vehicles may have to be dealt with by other district councils on an individual basis, any systematic concerns relating to the running of the business would be directed to us alone, and there would be no confusion as to who would be the authority responsible for ensuring compliance with legislative requirements.

To allow private hire operators outside of London to subcontract bookings to licensed operators outside their own licensing district.

8. Operators of private hire vehicles based in London that are licensed under the Private Hire Vehicles (London) Act 1998, are, by virtue of section 5.1.(b) of that Act, able to subcontract bookings to operators licensed under the Local Government (Miscellaneous Provisions) Act 1976 (which covers areas of England other than London). However, under the provisions of the 1976 Act, licensed operators based outside London are unable to sub-contract bookings to operators other than those licensed by the same Local Authority which they are licensed by. This would appear inconsistent, and places those operators licensed outside London at a disadvantage. Provided that accurate records were kept by both operators involved of any subcontracted work it can not be seen what the public safety argument would be that for keeping the restriction within the 1976 Act.

Background papers

The Arguments for and against councils licensing operators outside their own district.

9. The arguments for a Local Authority licensing operators outside of their own district are in two main parts. Firstly, section 57(2)(b)(ii) of the 1976 Act provides that a district council may require applicants for an operator's licence to submit information including 'the address or addresses whether within the area of the Council or not from which he intends to carry on business in connection with private hire vehicles...'. This wording is often cited as showing that it was the intention of Parliament that districts could licence operators outside their own boundaries. Secondly, section 55 of the 1976 Act provides that a district council shall on receipt of an application for a private hire licence give that person an operator's licence unless they are not satisfied that the applicant is not a fit and proper person to hold such a licence. It is thereby argued that the geographical location of the premises from which vehicles are to be operated is not a ground to refuse a licence, as the grounds for refusal must relate to the fitness and propriety of the operator alone.

10. Counter to the above views it could be argued that section 57 of the 1976 Act serves only to allow councils to ask for the information they will require so that they may make an informed decision, in the context of its licensing policy, as to whether the licence should be granted. This could include requesting information that might lead to the application being refused, including whether the applicant intends to have premises licensed outside the district council's boundaries. Section 55 of the 1976 Act does, in using the word 'shall', appear to place the onus on the district council to grant the licence where they are satisfied that the applicant is fit and proper. However, it would clearly be nonsensical for a district council to licence a remote premises for which they would have no realistic ability of testing compliance with the legislation intended to protect the travelling public.

11. It would therefore follow that a district council must have the discretion to refuse to licence an operator outside their district where they could not be satisfied that the grant of such a licence might not be adverse to the safety of the travelling public, which the framework of the 1976 Act was designed to protect. Furthermore, Section 80(2) of the 1976 Act provides that 'In this Part of this Act references to a licence, in connection with a controlled district, are references to a licence issued by the council whose area consists of or includes that district, and "licensed" shall be construed accordingly.' This implies that an Authority may only issue a licence inside its own district.

12. Section 80(2) of the 1976 Act would also indicate that a district council would not be able to prosecute for an offence under that Act in a district other than its own. If this was the case then it would be of significant detriment to private hire licensing to grant a licence to which many of the provisions of the 1976 Act would not apply (e.g. section 46).

Case law that appears to support to the view that the proper interpretation of the Act is to provide each authority the ability to exercise full control over private hire operation in its area.

13. The case of Kingston Upon Hull City Council v Wilson (1995) Times 25 July (QBD) held that the licence issued is address specific and the holder of the licence may only operate vehicles from the address specified on the licence.

14. Windsor and Maidenhead Royal Borough Council v Khan [1994] RTR 87 considered if an offence was committed of operating without a licence if advertisements were placed in telephone directories which circulated not only within, but outside the area of the local authority in which the person was to operate.

In his judgement MCCULLOUGH J stated:

"The reality of the matter in relation to that booking was this: the defendant made provision for the acceptance of bookings for his private hire vehicles. He did so by maintaining an office in which, it is to be presumed, he kept a book in which orders were entered and by reference to which orders were executed. That office was in Slough, not Maidenhead. The evidence about Mr Wood's booking and the journey of A576 KLT to High Street, Maidenhead, to collect him and take him back to Slough was of no assistance to the prosecution…

…The considerations to which I have already referred make clear that, in its definition of the word ‘ operate’ , Parliament was not referring to places which invitations might reach, but to places where provision is made for the invitation of bookings. Put an advertisement in a local newspaper in one part of England and it may be read in almost any other part of the country. The defendant made provision for the invitation of bookings at his office in Slough. What he did by advertising in the directories circulating in the area where he conducted his business, and in adjacent areas, was to inform the public that he had made such provision. His provision was nevertheless made in Slough, not in Maidenhead, nor in any of the other areas in which those directories circulate. That conclusion is not, in my judgment, affected by the fact that the directories circulated in a much wider area, or that the defendant named towns other than Slough, such as Maidenhead, in his advertisement. If Mr Harrison's submissions were right, it would mean that the defendant was operating not just A576 KLT, which is named in this summons, but every one of his private hire vehicles 24 hours a day, seven days a week in Maidenhead, even on days when none of his vehicles ever went anywhere near Maidenhead. That would be nonsensical."

15. The case of Dittah v Birmingham City Council and Choudry v Birmingham City Council [1993] RTR 356 (QBD) held that the licences in relation to operators, vehicles and drivers must all be issued by the same local authority, namely the authority within whose area the vehicles will operate.

KENNEDY J states "So, as it seems to me, it is quite clear that no one can, in a controlled district such as Birmingham, operate (i.e. in the course of business make provision for the invitation or acceptance of bookings) a private hire vehicle without having a current operator's licence issued by Birmingham City Council."

A letter from the Department of Transport to district secretary of Bromsgrove District Council in 25 June 1992 was placed before the Court which stated 'In our view applying section 80(2) to sections 46(1)(d) and (e) has the effect that an operator requires a licence from the area in which he intends to operate and may operate only in that area vehicles and drivers licensed by the same district. This has the practical effect that an operator licensed in area A may only use vehicles and drivers licensed in area A but these vehicles and drivers will by virtue of section 75(2) exemption be able to go anywhere in the course of the hiring.' KENNEDY LJ agreed that this was "…an accurate statement of the law..."

The above supports the view that an operator must hold an operators licence from authority in whose area he operates. As per Windsor and Maidenhead Royal Borough Council v Khan this is the authority where his base is located, bookings made, and vehicles dispatched from.

16. The case of Shanks v North Tyneside MBC [2001] LLR 776, QBD concerned an operator who had a private hire operator licence from both Newcastle Upon Tyne and North Tyneside Council. The vehicles operated were fitted with tracking devices and the operator sent which ever vehicle was closes regardless of whether it and driver was licensed by Newcastle or North Tyneside.

The case held that whenever any operator acts by making provision for the invitation or acceptance of bookings for a private hire vehicle, he must use vehicles and drivers licensed by his licensing authority. He is perfectly entitled to do that by way of subcontract; but he cannot obtain the use of vehicles or drivers licensed by another authority in order to carry out the booking which he has, as an operator, made provision for by way of invitation or acceptance.

In his Judgement LATHAM LJ stated

"[22] Not only do I consider that it has not been shown that the decision of Dittah was per incuriam and, therefore, a case which we can revisit, but I have come to the firm conclusion that it was correctly decided. The provisions of s 80(2) as applied to s 46(1)(e), in my judgment, brook of no other answer but that the operator granted the licence under s 55 can only operate vehicles and drivers licensed by the licensing authority which granted it its operator's licence. One way of testing whether or not that particular construction is correct is to consider the consequences of the construction contended for by Miss Booth. One of the consequences would be that if one applied her logic to s 46(1)(d) and (e), the only conclusion that one could come to would be that an operator could operate in any district provided he had obtained a licence authorising him to operate in one district.

[23] That would, in my judgment, drive a coach and horses through what appears to me to be a central principle of this legislation, which is that the authorities responsible for granting licences should have the ability to exercise full control over the operation of private hire vehicles within their area.

[24] I consider therefore that there are good policy reasons for ensuring that there is a unified system of control in relation to private hire vehicles operating within the area of any given authority. That ensures consistency of policy in relation to the provision of private hire vehicles and their drivers. It enables the authority to ensure that it is able to exercise such control as it is entitled to exercise over all the vehicles and drivers being operated to provide private hire services within its area. That seems to me to be a central purpose of the statutory provisions."

This case also supports the view that that an operator must hold an operators licence from authority in whose area he operates in order to exercise full control in their respective areas.

17. The case of Newcastle City Council, R (on the application of) v Berwick-Upon-Tweed Borough Council & Ors, Court of Appeal - Administrative Court, November 05, 2008, [2008] EWHC 2369 (Admin) whilst not directly related to the matter in hand held that "a licensing authority may in the proper exercise of its discretion under the said section 37 refuse to grant a licence in respect of a hackney carriage that is not intended to be used to ply for hire within its area and/or is intended to be used (either entirely or predominantly) for private hire remotely from the area of that authority." It could be argued that this upholds the view expressed in the above cases that an each authority should be able to exercise full control over private hire operations in its area.

December 2010