House of Lords - Explanatory Note
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Clauses 124 to 127: Bus Services: Ticketing Schemes

105. Clauses 124 to 127 empower local transport authorities, alone or jointly, to set up ticketing schemes, whereby operators of local bus services are required to make and implement arrangements to accept each other's tickets or provide integrated ticketing in ways specified in the scheme. "Ticketing scheme" is defined in clause 124(3). In doing so the local transport authorities must be satisfied that this is in the public interest and implements their bus strategy.

106. Many bus operators are already involved in area-wide ticketing. But they cannot at present be compelled to do so by law.

107. Clause 125 imposes a consultation requirement upon an authority intending to introduce such a scheme. Clause 126 provides that an authority may make the scheme as proposed or with modifications (subsection (1)) and may vary a scheme (subsection (5)). It also imposes requirements as to publicity when a decision is taken to make a scheme. Clause 127 imposes a duty on operators to implement the scheme from the date it comes into force (not less than 3 months after making: clause 126(2)). Failure to do so may attract enforcement action by the traffic commissioner under section 26 or 111 of the 1985 Act, by virtue of amendments made to those provisions by paragraphs 10 and 21 of Schedule 10 to the Bill. (See also clause 132(1).)

Clauses 128 to 130: Bus Services: Provision of information

108. Clauses 128 to 130 require local transport authorities, alone or jointly (see clause 130(3)), to determine in accordance with their local transport plan what local bus information (as defined in clause 128(6)) should be made available, and how, and to seek to arrange with operators for its provision. If arrangements cannot be made by agreement, the authority must make the information available or secure that it is made available, and in such a case it is given power to recover reasonable costs from the operators concerned (clause 129).

109. Clause 130 provides that, in exercising their powers, the authority must have regard to economy, efficiency and effectiveness, and must not discriminate against operators.

110. A duty is imposed on operators by clause 129(3) to furnish information to the authority or a third party in such circumstances, to enable the authority to meet its obligations. Failure to do so may attract enforcement action by the traffic commissioner under section 26 or 111 of the 1985 Act, by virtue of amendments made to those provisions by paragraphs 10 and 21 of Schedule 11 to the Bill. (See also clause 132(1).)

Clause 131 and 132: Bus Services: Miscellaneous

111. Clause 131 extends the powers of the traffic commissioners to impose traffic regulation conditions on local bus services under section 7 of the 1985 Act. These powers currently allow the commissioners, at the request of local authorities, to impose restrictions on routes and stopping places in the interests of preventing danger to road users or reducing severe traffic congestion. Under clause 131, a commissioner will also be able to do so for the purpose of reducing or limiting noise or air pollution.

112. Clause 132 empowers local transport authorities to obtain from operators of local services information which they may need in connection with their public transport functions. The information obtainable may be demanded in any reasonable form but is limited to total passenger numbers, total bus mileage and an operator's fare structure for the whole or part of their area (subsections (2) and (3)). There is provision for the protection of commercially sensitive information in subsections (4) to (6).

Clauses 133 to 138: Mandatory Travel Concessions outside Greater London

113. Clauses 133 to 138 give elderly people (as defined in clause 134(1)) the entitlement to a half-fare concession on local bus travel within the area of a "travel concession authority" and during the "relevant time" (expressions also defined in clause 134(1)). Eligibility may be made conditional on the holding of a bus pass for which no charge may be made by the authority issuing it (clause 134(2)).

114. Clause 135 empowers the Secretary of State or the NAW:

  • to extend the eligible categories to other persons eligible to participate in discretionary schemes made under section 93 of the 1985 Act (subsection (7) specifies who they are - principally young, blind or disabled people);

  • to extend the qualifying journeys to those on other public passenger transport services (as defined in section 63(10) of the 1985 Act, a definition applied to this Bill by clause 150(3);

  • to vary the relevant times;

  • to improve the concession to better than half the fare.

115. Clause 133(3) makes provision whereby an elderly person can opt for an alternative to the statutory minimum concession. If an authority has a discretionary scheme under section 93 of the 1985 Act which is more attractive to a particular elderly person, that person may agree not to be entitled to the mandatory concession in order to take up the discretionary concession. For example, a discretionary scheme might offer pensioners tokens which can be used on any mode of transport, an arrangement which would be more attractive to a person who finds travel by bus difficult. He or she could agree not to receive the mandatory concession in order to benefit from the discretionary scheme (if the scheme required this). The period during which such agreements are binding may, along with other matters, be prescribed in regulations.

116. Clause 136 provides that systematic failure by operators to provide the mandatory concession is an offence, attracting a fine not exceeding level 3 on the standard scale (currently £1,000).

117. Clauses 137 and 138 make provision for the reimbursement of operators by local authorities, this being based broadly speaking on the present system under the 1985 Act.

Clause 139: Mandatory Travel Concessions in Greater London

118. Clause 139 makes separate provision, to similar effect, for Greater London, by modifying the provisions in the Greater London Authority Act 1999 which define when the reserve free travel scheme will be triggered. If a half-fare concession is not made available to pensioners on journeys on the London bus network (as defined in section 181(3) of that Act) beginning at specified times, subject to the holding of a travel permit (which must be issued free of charge), the reserve scheme will come into effect. Again the Secretary of State has power to extend eligibility for the concession to other eligible categories of London resident and to improve the concession to better than half the fare (clause 139(7)).

119. Nothing in the Bill requires any change to be made to the present voluntary free scheme agreed between the boroughs and London Transport or to any future free scheme agreed by virtue of the 1999 Act.

Clauses 140(4) and 141 and Schedule 10: Competition provisions

120. Clause 140(4) removes the present constraint, imposed by section 92(1) of the 1985 Act, that in exercising powers to subsidise public passenger transport services under section 9A of the 1968 Act and section 63 of that Act local authorities must behave "so as not to inhibit competition", a provision which requires them to consider whether competition might be inhibited, however slightly. (The duty also applies to London Regional Transport to the extent that it still subsidises such services.) This is replaced with a new duty to have regard to the interests of the public and of operators and, in the case of local transport authorities, modified by the provisions referred to in the next following paragraph.

121. Clause 140 introduces Schedule 10 which contains provisions applying a competition test in relation to the exercise (including the proposed exercise) of three functions of local transport authorities, namely:

  • the making and varying of QP schemes;

  • the making and variation of ticketing schemes ;

  • invitations to tender and acceptance of tenders for subsidised services under the 1985 Act (see paragraph 1 of the Schedule).

122. Paragraph 2 of Schedule 10 specifies that the test is met unless the exercise of a function has, or is likely to have, a significantly adverse effect on competition which cannot be justified in accordance with that paragraph. A scheme or an exercise of service subsidy functions may be justified if its purpose is one of those set out in Paragraph 2(3) and the effect on competition is, or is likely to be, proportionate to the achievement of that purpose.

123. Paragraphs 3 and 4 provide for a relevant authority or operator of local services to apply to the Director General of Fair Trading (the "DGFT") either before or after exercise of the function for a decision on whether it will meet or has met the competition test. Paragraphs 5 to 10 provide for the DGFT to investigate on his own initiative, for example, after a complaint has been received. For the purpose of an investigation he is given powers to obtain information and documents by paragraphs 6 and 7, subject to the provisions as to confidentiality in paragraphs 8 and 9. Any decision made on such an application or following such investigation must be published with reasons (paragraph 11).

124. The DGFT may enforce his decisions by giving to the authority or authorities exercising the function directions in accordance with paragraph 13, including directions to vary or revoke a scheme or to require a tender contract to be entered into with another operator.

125. Paragraph 14 makes it an offence, punishable with a fine up to level 5 on the standard scale (£5,000), to give the DGFT false or misleading information. Paragraph 16 makes provision for the charging of fees by the DGFT in connection with his functions under the Bill.

Clauses 140(2) and (3) and 142 to 146: Financial provisions

126. Clause 140(2) amends the criteria by reference to which local authorities must decide which tender to accept in the case of tenders for additional subsidised public transport services under section 9A of the 1968 Act and section 63 of the 1985 Act (which are mentioned further at paragraph 132 below). It introduces a new 'best value' test by requiring local authorities to have regard to economy, efficiency and effectiveness and also to have regard to the relevant bus strategy, and environmental issues, namely the reduction or limitation of traffic congestion, noise or air pollution.

127. Clause 142 makes new statutory provision for grants to bus operators, including power to make regulations as to the classes of bus services for which grant may be paid, and the method of calculation. If and when introduced, this power will replace the current Fuel Duty Rebate ("FDR") scheme under section 92 of the Finance Act 1965 with a more flexible power enabling grant to be paid by the Secretary of State or the NAW to bus operators on a different basis from the present scheme. Provision could, for example, be made for differential rates of grant to encourage the use of more environmentally friendly fuels or vehicles.

128. Clause 143 makes alternative provision to section 111 of the 1985 Act (traffic commissioners' powers in respect of unreliable or unregistered services) as from the time when FDR is replaced by clause 142. That section presently allows the traffic commissioners to demand repayment of 20% of eligible FDR in the event of an operator being found to have contravened section 6 of the 1985 Act. Under this clause, the traffic commissioners will be able to impose a financial penalty. The maximum penalty is £550 (or such other sum as may be prescribed by order - subsection (3)(b) - multiplied by the number of vehicles the operator is licensed to use under his public service vehicle licence, representing approximately the same level of penalty as the current penalty). There will continue to be a right for operators to appeal to the Transport Tribunal, as now.

129. Clauses 144 and 145 empower the Secretary of State or NAW to make grants to local transport authorities other than PTAs (clause 144) and to PTAs (clause 145) for general local transport purposes. Grants may be paid subject to conditions or not. One effect of these clauses is to put on a permanent statutory basis support for rural local transport in England and Wales which is currently covered by special grant reports approved annually by Parliament under section 88B of the Local Government Finance Act 1988.

130. Clause 146 amends the present power of the traffic commissioner under section 111 of the 1985 Act to impose a penalty on a bus operator, if he fails "to a significant extent" to operate his services as registered under section 6 of the 1985 Act. Currently the commissioner must impose a penalty of 20% of the FDR rebate paid in the previous three months. The amendment will enable a commissioner henceforth to impose a penalty between 1% and 20% and he will no longer need to satisfy himself that the operator has failed "to a significant extent", thus allowing a more flexible, and perhaps more frequent, use of the power. (This amendment only has effect, however, until such time as section 111 is replaced by the provisions of clause 142.)

Clause 148 to 150 and Schedule 11: Supplementary

131. Clauses 148 to 150 make provision for regulations and orders under Part II of the Bill and introduce the minor and consequential amendments in Schedule 11, and provide for definitions.

132. Paragraphs 3 and 11 of Schedule 11 in particular amend section 9A of the 1968 Act and section 63 of the 1985 Act in two respects. First, they remove the obligation imposed on local authorities and PTAs to formulate policies as to what subsidised public transport services are required in their area. This is now replaced by the duties under clauses 98 and 100 to produce local transport plans and bus strategies. The duty in those enactments to secure the provision of services which would not otherwise be provided commercially is retained. In the second place, they replace the duty, also imposed on local authorities by those sections of the 1968 and 1985 Acts, "not to inhibit competition" when exercising powers to promote public passenger transport services by a "best value" duty requiring local authorities to have regard to a combination of economy, efficiency and effectiveness.

133. Paragraphs 5 and 13 of the Schedule remove disabilities imposed (by the Local Government Act 1972 and the 1985 Act) on local councillors who are either unpaid directors or employees of public transport companies preventing them from taking part in or voting on certain matters relating to those companies. They amend that legislation by providing that (in the case of the 1985 Act) councillors who are members of a company's controlling authority or (in the case of the 1972 Act) councillors who are members or any other local transport authority may take part and vote in debates on a local transport plan or bus strategy. (A "public transport company" is defined in section 72(1) of the 1985 Act and is, in brief, a company formed by a local council or PTA to carry on a bus undertaking, as defined in section 66 of that Act, and the company's "controlling authority" is a council or PTA.)

134. Paragraph 7 of the Schedule amends the Road Traffic Regulation Act 1984 as regards the making or revocation of traffic regulation orders in connection with QP schemes, if the Secretary of State or NAW consents.


135. The Road User Charging and Workplace Parking Levy provisions are in three Chapters. These are:

Chapter I - Road User Charging

Chapter II - Workplace Parking Levy

Chapter III - General and Supplementary.


Clauses 151 to 155: Charging schemes

136. Clause 151 enables road user charging schemes to be introduced by:

  • local traffic authorities outside London, acting either singly, or jointly with another local traffic authority or authorities, or with a London traffic authority or authorities (i.e. Transport for London, or London borough councils or the Common Council of the City of London); and

  • by the Secretary of State or the National Assembly for Wales (NAW).

Clause 151 also provides that the registered keeper of a vehicle will be responsible for paying road user charges, but allows the Secretary of State or NAW to specify other persons in certain circumstances through regulations. This would for example provide for the transfer of liability, where a vehicle is subject to a valid higher agreement, to the hirer.

137. Clauses 152 and 153 provide that charging schemes made by local authorities may only apply to roads for which the charging authority or authorities are the traffic authority, and that charging schemes should be introduced only in support of a ocal ransport plan (see paragraphs 83 to 88). Clause 154, which relates to joint local authority - London charging schemes, also provides that charging can occur only on the roads for which the participating authorities are the relevant traffic authorities, and that the scheme must support both the local transport plan(s) of the non-metropolitan authority or authorities, and the London Mayor's statutory transport strategy.

138. Clause 155 sets out the two cases where charging can be introduced on trunk roads by the Secretary of State or the NAW. The first of these is charging on trunk road bridges and tunnels of at least 600m in length. This is to allow for future cases where charging may be an option for making expensive new structures affordable, and for continued tolling on crossings when the current tolling powers are due for renewal. The Government has no plans to introduce charging on existing bridges and tunnelswhich are not already tolled. The second case is where a local traffic authority requests the Secretary of State or the NAW to charge on a stretch of trunk road, in order to complement a local road user charging scheme.

Clauses 156 to 158: Making of charging schemes

139. Clause 156 specifies that a traffic authority or authorities acting jointly, - including local, Transport for London or the Secretary of State or NAW - wanting to introduce a charging scheme must do it by making an order. If an authority wants to change or revoke a scheme, this must also be done by order. Where the Secretary of State or NAW has introduced a charging scheme on a trunk road at the request of a local authority, it cannot be changed or revoked unless the local traffic authority which requested it has been consulted.

140. Clauses 157 and 158 define the role of the two national authorities in relation to local authority orders setting up, changing or revoking charging schemes. Clause 157 requires that all non-London local authority orders must be approved by the Secretary of State or NAW, as appropriate. Where there is a joint scheme between an English and Welsh local authority, there must be approval from both national authorities (see clause 186(1) for definitions of "appropriate national authority"). Where there is a scheme run jointly by an English local authority and a London authority, approval will be needed from the Secretary of State and the Greater London Authority. In all cases, the approving authority can make modifications to the order.

141. Under clause 157(2) the Secretary of State or the NAW will also be able, by regulations, to waive the requirement for his or its consent. This will allow, for example, local authorities to make minor changes to their schemes or suspend charges through more streamlined, simplified procedures, provided certain conditions are met. In the longer term, it may be possible to broaden the scope of the waiver given by regulations. Orders revoking charging schemes do not need the approval of the Secretary of State or NAW.

142. Clause 158 provides for charging authorities to consult and hold inquiries, and for the Secretary of State or the NAW to consult or hold an inquiry on their own schemes, or require additional consultation or an inquiry to be held before granting approval for a local authority scheme. It also sets out the arrangements for the allocation for costs for inquiries.

Clauses 159 to 160: Contents of charging schemes

143. Clause 159 sets out the basic elements which must be included in the order establishing the charging scheme - the roads to be charged, and how the charges are defined, the classes of motor vehicles which will be charged, the levels of charge, and the duration of the scheme. These elements are for the charging authority to determine. Clause 159(3) ensures that charging powers cannot be used purely as a charge on parked vehicles.

Clause 159(5) describes some of the factors by reference to which different charges might be imposed, but this is not an exhaustive list. Clause 159(7) allows the charging scheme to require documents or equipment to be carried in or fitted to a vehicle when it is on a charged road. This gives charging authorities the power to ensure that everyone who enters a scheme must have a permit or electronic payment unit in their vehicle, or have to pay a penalty charge. Clause 160 provides the power for regulations to set exemptions from charges, reduced rates or limits on charges which will apply to all charging schemes. The Secretary of State will be able to set exemptions, reduced rates or charging limits applying to all local authority schemes in England (and has powers to set exemptions in London under the Greater London Authority Act 1999 ("the 1999 Act")). This could be used for an exemption, for example, for emergency vehicles or disabled persons. The NAW also has powers to set exemptions, reduced rates or limits applying to Welsh local charging schemes. Subject to these regulations, clause 160(2) provided that any charging scheme will also be able to set additional exemptions, reductions or limits as the authority wishes, subject to approval.

Clauses 161 to 163: Enforcement of charging schemes

144. Clauses 161 and 162 allow the appropriate national authority and Lord Chancellor powers to make regulations to provide for the fair and effective enforcement of road user charging schemes. This includes arrangements for adjudication. The Bill provides that non-payment of a road user charge will be a civil matter rather than a criminal offence, and outstanding charges will be recoverable as a civil debt. Charges will not apply to vehicles that are not on the road. It is expected that the registered keeper of a vehicle will generally be liable to pay any penalty charges, but that there will be a defence where the vehicle has been stolen. Deliberate tampering with documents or licence plates or any in-vehicle or roadside equipment with intent to avoid payment or being identified as having failed to pay, are more serious cases and will therefore be subject to criminal rather than civil law. Clauses 162 and 163 provide powers for the appropriate national authority to make regulations to allow enforcement actions such as the examination of vehicles and equipment, and immobilisation, removal, storage and disposal of vehicles. Clauses 162 and 163 allow the seizure of evidence and provides for criminal offences where the exercise of enforcement powers are obstructed or immobilisation devices and notices removed without authority.

Clauses 164 to 165: Supplementary

145. Clause 164 allows charging authorities to install and maintain any equipment or buildings in connection with effective operation of a charging scheme. The Secretary of State and NAW will have the power to set the basic specifications for roadside equipment, so that all schemes will be technically interoperable (see clause 186(3)).

146. Clause 165 allows the Secretary of State or the NAW to direct a charging authority to put up traffic signs on their land in relation to a charging scheme; and to direct any authority to put up traffic signs in connection with a trunk road charging scheme.


Clauses 166 to 170

147. Clause 166 defines the concept of licensing schemes, and enables licensing schemes to be introduced by a local traffic authority outside London, either singly or jointly with another local traffic authority or authorities or with a London traffic authority or authorities. A licensing scheme is the mechanism for collecting the workplace parking levy. It will be for local authorities to decide whether or not to bring forward a scheme. Clause 166 also provides that the occupier of a premises will be responsible for paying charges, but allows the Secretary of State or NAW powers to specify other persons in certain circumstances through regulations.

148. The occupier of a premises will be required to apply to a local authority for a licence to park up to a stated maximum number of vehicles ("licensed units") at the premises, and pay the appropriate sum based on the charge per unit. Local authorities will be obliged to issue the licence for the number of units requested - they will not be able to use this mechanism as a means of directly controlling the number of parking places the person provides.

149. Clauses 168 and 169 allow licensing schemes to cover any part of the area of the authority or authorities making the scheme, and require that a scheme must be in support of the relevant local transport plan or plans (see paragraphs 83 to 88), or, in the case of a joint scheme involving a London authority, the transport strategy prepared and published by the Mayor.

150. Clause 170 provides the detailed definition of workplace parking. The definition is designed to include all forms of parking by those attending premises where they will carry out their work. The parking can be at or in the vicinity of the workplace - this is intended to catch, for example, parking at a car park adjacent to the workplace, but to exclude parking at a park and ride site or station car park, where the worker makes a further journey to reach the workplace. It also is designed to include parking provided by arrangement with a third party - for example where an employer has a contract with a nearby car park company to provide a certain number of spaces for its workforce.

Included in the definition is parking by the employer himself, his employees, suppliers, business customers or visitors, and pupils or students at an educational establishment. Suppliers can mean, for example, a photocopier engineer called out to make repairs, or an external consultant providing advice on site. The definition also includes members of organisations such as a recreational club or Chamber of Commerce, but only when they are engaged in the carrying on of any business of the body. Clause 170 also includes a power for the Secretary of State or NAW to change this definition by regulations. This power is designed to allow the prompt closure of any loopholes which the definition may contain. It does not provide for the extension of the scope of the levy beyond workplace parking to, for example, customer leisure or retail parking.

Clauses 171 to 173: Making of licensing schemes

151. Clauses 171 to 173 closely follow clauses 156 to 158 in Chapter I on road user charging, setting out the order-making process for introducing a licensing scheme.

Clauses 174 to 176: Contents of licensing schemes and licences

152. Clause 174 sets out the basic elements which a licensing scheme must contain, and allows for variations in the charges according to different days or times of day, different parts of the licensing area, different classes of motor vehicles or different numbers of licensed units. For example, an authority will be able to choose to apply the levy only to parking during normal office hours on weekdays, to charge different rates for two-wheeled vehicles, or to set a sliding scale so that the charge per vehicle increases or decreases above certain thresholds.

153. Clause 175 follows clause 160 in Chapter I in granting powers to set exemptions, reduced rates or limits on workplace parking charges by regulations.

154. Clause 176 sets out the essential elements that must be included in a licence under a licensing scheme. Licences may not be required for a period of greater than one year.

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