Community Transport and the Department for Transport's proposed consultation Contents

Summary

The Transport Act 1985 and associated guidance set out a relatively light touch regulatory and licensing regime for the provision of community transport (CT). For decades, the regime has provided an effective framework within which not-for-profit organisations can effectively provide community-based local transport services to people who would otherwise suffer isolation, often plugging gaps in commercial provision. Broadly, it still achieves this.

The Department and some community transport organisations (CTOs) have acknowledged that UK legislation and guidance have not kept pace with developments in practice and European Regulations, and some changes have become necessary. In particular, some commercial operators have been concerned about the CT permit system creating unfairness in competition for contestable contracts for many years.

Local authorities and CTOs have acted in good faith, and generally in accordance with the longstanding official guidance. Moreover, many CTOs have acted with the acquiescence and encouragement of successive governments to deliver public sector contracts and become more self-sufficient and “professional” in outlook. They also deliver considerable wider social benefits. A lack of robust data makes it difficult to find evidence of widespread unfair detrimental effects on commercial operators. In some areas, the effects on some operators—particularly small-to-medium-sized, often family-run, businesses—appear to have been substantial but the geographical extent of the problem is uncertain. Proposals to address instances of unfairness should be considered in the forthcoming consultation, but the Department must not use a sledgehammer to crack a nut.

Only when the threat of legal action became imminent did the Department move away from its position of treating “not-for-profit” operators as acting for “non-commercial” purposes under EU Regulations. The Department did not address valid concerns appropriately, and acted too slowly. The Department should consider whether a satisfactory outcome may have been achieved earlier had it tackled relatively localised issues head on several years ago, and learn the lessons for its future regulation of policy areas which are its responsibility.

The Department’s letter of 31 July to all permit issuers, in which it set out the potential implications for the broad CT sector of a licensing investigation into an individual CTO, was well-intentioned but, in the light of its new understanding of the potential effects, some of its content could be deemed ill-judged. In trying to clarify and calm the situation, it achieved the opposite, creating confusion and a level of panic in the CT sector. The uncertainty led to some local authorities halting commissioning processes and, in some cases, unnecessarily beginning the process of withdrawing contracts from CTOs. It also led to Traffic Commissioners suspending the issue of permits.

The need for substantial further clarification is evident in the Department’s note to local authorities of 9 November. It is highly regrettable that it took the Department more than three months to provide a potentially more compatible and workable UK definition of “non-commercial” in the context of CT services. There is still more work to do in fully understanding the implications.

While the Department has been forced to act under the threat of imminent legal action, its consultation should avoid a narrow, legalistic focus on bringing UK guidance and legislation into line with relevant EU Regulations. The consultation must also be used as an opportunity to consider reforms designed not only to achieve compatibility, but also to continue to achieve the key public policy objective of the sector—the provision of high quality, safe and secure local community services for people who might otherwise be left isolated. Protection of these services, the huge majority of which are uncontested, and by definition cannot be provided by commercial operators, is imperative. We welcome the Minister’s commitment to maintain the community transport permit system, and the 9 November proposals to achieve this. Given the current level of paralysis in the CT sector, the Department should launch the consultation, with its scope broadened in line with our recommendations, as soon as practicable.





13 December 2017

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