APPENDIX 3: LOCAL TRANSPORT BILL [HL]
— GOVERNMENT AMENDMENTS
Supplementary memorandum by the Department for
Transport
Introduction
1. This memorandum supplements the Memoranda
to the Delegated Powers and Regulatory Reform Committee dated
8th and 29th November 2007 and 9th and 23rd January
2008. It sets out the effects of the amendments tabled by the
Government and on Report in the House of Commons.
2. This memorandum describes two substantive
new provisions for delegated powers and one group of clauses where
existing delegated powers would be extended. It describes a provision
which would ensure that governance orders made under Part 5 of
the Bill would not be subject to the hybrid statutory instrument
procedure. It also describes a group of amendments to clarify
the extent of certain delegated powers already included in the
Bill. The table at Annex A to this Memorandum identifies a number
of more modest amendments to delegated powers already contained
in existing legislation or the Bill. The Department considers
that other amendments to be moved on Report have no delegated
powers implications.
3. References to clause numbers in this memorandum
are to those clauses in the Bill as amended in the House of Lords
and in Public Bill Committee.
PROVISION FOR DELEGATED LEGISLATION
Clauses 1 (traffic areas), 6 (consequential
amendments), 68 (the Public Transport Users' Committee for England)
and 69 (power to confer non-rail functions on the Rail Passengers'
Council
4. These clauses contain various powers for the
Secretary of State, in secondary legislation, to amend, modify,
repeal or revoke any enactment (whenever passed or made) in order
to give full effect to the relevant provisions in the Bill. The
rationale for taking these powers was discussed in detail in the
Department for Transport's Memorandum to the Delegated Powers
and Regulatory Reform Committee dated 8th November[13].
All orders using such powers would be subject to the affirmative
resolution procedure.
5. As the Department starts to move towards the
implementation phase, further thought is being given to the use
of these powers. In particular, some doubt has been expressed
as to whether a power to amend "any enactment (whenever passed
or made)" is wide enough to enable amendments to be made
to the enactment conferring the power (or to any modifications
or amendments to other enactments which that parent act makes).
The Government has therefore tabled amendments to make it explicit
that the power extends not only to enactments made before or after
the enactment within which that power is contained, but also to
that enactment itself.
6. The Department believes that the amendments
are justified. The power in clause 6 of the Bill, for example,
empowers the Secretary of State, by order, to make such provision
as may be considered necessary or expedient for the purposes of
giving full effect to the amendments to the Public Passenger Vehicles
Act 1981 contained in clauses 2 to 5. Of particular relevance
to this memorandum, those clauses amend the current requirement
for there to be a single traffic commissioner appointed for each
traffic area (with jurisdiction only in that traffic area), enabling
the Secretary of State to appoint a pool of traffic commissioners
with jurisdiction across England and Wales.
7. As a consequence, it will be necessary to
amend a large number of references in both primary and secondary
legislation which specify a direct link between a traffic commissioner
and a traffic area[14].
Some of those references will be contained in existing legislation
which has been modified or amended by provisions in this Bill[15].
8. The Department has considered whether it would
be possible now to make the necessary changes to such provisions
in the Bill. However, further work needs to be done to determine
the future structure of the traffic commissioner network, and
thus the appropriate statutory wording to reflect that. The Department
has therefore concluded that it is not feasible or prudent to
make those amendments until the finer detail of the policy has
been developed.
9. A further example is in clause 69, which would
insert new provisions into the Railways Act 2005 ("RA 2005").
The amendment to new section 19A(4) of that Act would make it
explicit that the power to amend, repeal or revoke any enactment
will include a power to do so in respect of the RA 2005 itself.
That is needed because, if the Secretary of State, for example,
decides to change the name of the Rail Passengers' Council to
reflect its new responsibilities, provisions in the RA 2005 will
need, as a consequence, to be amended. Again, no final policy
decision has been taken by the Secretary of State about the future
name of the Committee, so it is not possible to make those changes
now.
10. The Department believes that, given the potential
doubt as to the extent of the powers, and the likelihood that
a small number of consequential amendments will be needed to provisions
in the Bill so as to give full effect to the policies to be enacted
therein, the extent of the power should be made explicit.
Clauses 19 to 38: Quality contracts schemes
11. A quality contracts scheme is a scheme whereby
a local transport authority determines the network of local bus
services to be provided within their area, or part of their area,
and those services are provided by operators under contract (quality
contracts) to the local authority. The effect is to suspend the
de-regulated bus market within that area for a period up to ten
years. Sections 124 to 134 of the Transport Act 2000 ("TA
2000") contain the relevant legislation.
12. Clauses 19 to 38 of the Bill amend those
provisions in the TA 2000. The purpose is to make such schemes
a more realistic option for local authorities. The clauses relevant
to this part of this memorandum replace the existing role of the
Secretary of State in approving schemes in England, and give those
functions instead to an 'approvals board' consisting of a traffic
commissioner and two independent members. In Wales, schemes will
continue to be approved by the Welsh Ministers.
13. In the light of the Parliamentary debates,
in particular at Public Bill Committee, the Government has concluded
that that the Bill should be amended so as to place the final
decision about schemes in England in the hands of the local transport
authority, rather than an independent approvals board. To achieve
this, a substantial group of amendments has been tabled to be
moved on Report. The effect of the amendments would be to change
the functions of approvals boards (to be re-named "QCS boards"),
thus empowering local authorities in England to make schemes without
seeking prior approval. Instead, a QCS board would be constituted
in respect of every proposed scheme to consider the proposals
in the light of responses to the statutory consultation process.
The role of the QCS board would be to give the authority an opinion
and, where appropriate, to make recommendations about whether
the criteria (contained in section 124 of the TA 2000) would be
satisfied by the proposed scheme, and whether the authority had
met the statutory requirements on consultation.
14. There are already two key sets of delegated
powers in these provisions. The first is in new section 126B of
the TA 2000, which confers powers on the Secretary of State to
make rules and regulations with respect to QCS boards. The second
is in section 133 of the TA 2000, which confers general powers
on the appropriate national authority to make regulations about
quality contracts schemes. Both of these provisions are extended
as a result of the amendments tabled. There is also one new stand
alone power.
15. The new power is in new section 126AA(5),
which empowers the Secretary of State to make regulations in connection
with the giving of advice by a QCS board either to local authorities,
or to other persons seeking to make representations about proposed
schemes. The purpose of the power is to enable the Secretary of
State to prescribe the procedure to be followed where advice is
sought, and given, so as to ensure propriety in the giving of
such advice. In particular, regulations would make provision for
such requests and advice, in appropriate circumstances, to be
disclosed to certain persons, or to the public in general. This
provision has precedent in the latest version of the Planning
Bill (currently before Parliament) which makes similar provision
in respect of advice which may be given by the proposed new Infrastructure
Planning Commission.
16. New section 126B (practice and procedure
of boards) would be amended. In the light of the proposed changes
to the functions of QCS boards the powers in new section 126B
would be amended to remove the power for the practices and procedures
of boards to be prescribed in rules. Instead, all secondary legislation
under this provision would be in the form of regulations, and
the powers already in the Bill would be extended. In particular,
the additional provisions flesh out the powers for the Secretary
of State to make regulations about the constitution of boards,
and in respect of their powers and duties. These powers would
be used to prescribe procedural requirements, for example about
the process for the receipt and acknowledgement of requests to
boards, the way in which requests are to be handled, and in connection
with the making of representations to the board in particular
circumstances.
17. The Department is of the opinion that these
new powers are similar in scope to the existing powers in this
new section. It is also of the view that the prescription of detailed
procedural requirements such as these could only be made effectively
following detailed consultation with local authorities, traffic
commissioners, and representatives of the bus industry. It is
also possible that regulations made under these powers might need
to be amended in the future in the light of experience. The Department
is therefore of the view that such provisions are more suited
to secondary, rather than primary, legislation and that the powers
in this section should continue to be subject to the negative
resolution procedure.
18. Section 133 of the TA 2000 would also be
modified further by these amendments. Again, the new provisions
flesh out the existing powers to prescribe the procedure to be
followed at various stages of the quality contracts scheme process
(including when such schemes are varied, continued beyond the
initial period, or revoked) in the light of the changes to the
approvals process. New subsection (3) empowers the appropriate
national authority to modify or exclude the application of provisions
in this Part of the Act in certain circumstances. However, new
subsection (4) safeguards the fundamental requirements which authorities
must satisfy before making a quality contracts scheme so as to
prevent these from being modified or excluded other than through
a further Act of Parliament.
19. The process now being established under this
Part is complex and, as yet, there is not even any experience
of a quality contracts scheme being made under the existing provisions.
In view of this, the Department wishes to retain some flexibility
to modify the application of the procedures should that be deemed
necessary in the light of experience. It is the opinion of the
Department that, as these powers relate to the application of
certain procedural requirements, and either the addition or reduction
of processes where deemed necessary, they are best exercised through
secondary, rather than primary, legislation. There is already
a precedent in the existing section 132(5)(b) of the TA 2000 under
which the appropriate national authority may make regulations
to modify the procedure for the variation or revocation of schemes.
20. The Department proposes that all these powers
should be subject to the negative resolution procedure, which
is consistent with all other powers to make secondary legislation
in relation to quality contracts schemes under Part 2 of the TA
2000. No express provision for Parliamentary scrutiny is necessary
in the amendments themselves as, by virtue of section 160 of the
TA 2000, all instruments made under these new provisions would
be subject to the negative resolution procedure.
21. In view of the complexity of these amendments,
the Department has published a marked-up version of the quality
contracts scheme provisions in the Transport Act 2000, showing
how those provisions would look if the Bill were to be enacted
as amended in the House of Commons. This is available at www.dft.gov.uk/localtransportbill,
and a copy is enclosed with this Memorandum.
Clause 39: Quality contracts: application of
TUPE
22. The effect of clause 39 of the Bill, as amended
on Report in the House of Lords, would be to insert a new section
134B into the TA 2000 to provide that where, as the result of
the coming into force of a quality contract, particular local
bus services cease to be provided by the incumbent operator and
are to be provided instead by a new operator, that situation would
be treated as a "relevant transfer" for the purposes
of the Transfer of Undertakings (Protection of Employment) Regulations
2006 ("TUPE"). The existing provision includes a delegated
power which would empower the Secretary of State to prescribe
in regulations detailed procedural matters about the logistics
of staff transfers.
23. The Government agreed to review this provision
in the light of points raised in Public Bill Committee in two
particular respects. First, in response to concerns that the provision
as drafted would only apply where an incumbent operator continued
to provide local bus services up until the point that the quality
contract came into force. If, for any reason, the operator stopped
providing local bus services in advance of that date, affected
staff would have no TUPE protection. Secondly, concerns were raised
that the clause as drafted would do nothing to provide pension
protection for staff subject to a transfer under this provision.
24. Following further consideration the Government
has concluded that the scope of this provision should be extended,
and has tabled amendments to be moved on Report to address these
concerns. In response to the first, the effect of the amendment
would be to extend the scope of the definition of a "relevant
transfer" for the purposes of this provision to include situations
where the incumbent operator ceases to provide services in
advance of the entry into force of the quality contract, but
only where the local transport authority makes appropriate arrangements
to ensure that those services continue to be provided during the
period between the cessation of the services and the entry into
force of the quality contract.
25. In response to the second point, the amendment
would make two changes. First, it would provide for the appropriate
sections of the Pensions Act 2004 (and regulations made under
one of those sections) to apply to staff that transfer as a result
of new section 134B of the TA 2000. Secondly, and of greater relevance
to this memorandum, it would extend the existing regulation making
power in the new section to enable such regulations to require
local transport authorities, in making a quality contract, to
secure pension protection for employees.
26. The Department has considered whether it
would be appropriate to include full details of the pension protection
on the face of the Bill, but has concluded that that would not
be appropriate. As was highlighted in the debates on this matter
in Public Bill Committee, pension protection issues are complex,
and it is important to ensure that the detailed provisions are
correct and appropriate for all transferring staff. The Department
is therefore of the opinion that, before making the appropriate
legislation, detailed discussions will need to take place in particular
with representatives of local transport authorities, the trades
unions and bus operators. Furthermore, it might also be the case
that the provisions would need to be amended in the future, if
experience dictates that minor adjustments might be necessary.
This would be more easily achieved if the provisions are in secondary,
rather than primary, legislation.
27. However, in the light of concerns raised
during the passage of the Bill about the effect on existing employees,
the Department has decided to include a provision which would
place a duty on the Secretary of State to make regulations to
require authorities to secure a certain level of pension protection
for "transferring original employees" (as defined in
the amendment). The effect would be to place an obligation on
the Secretary of State to make regulations to ensure that those
workers employed by a bus operator at the time a quality contracts
scheme is made would, if they transferred to a new operator as
a result of the making of a quality contract, have pension rights
with the new employer which would be the same, broadly comparable
to or better than those they had with their former employer.
28. This proposal has a close precedent in section
101 of the Local Government Act 2003 ("LGA 2003"). That
section requires the "appropriate person" (the Secretary
of State, in relation to England) to issue directions to best
value authorities dealing with certain matters relating to staff
transfers. These matters include pension arrangements for transferring
staff. Directions given under that section are not subject to
Parliamentary scrutiny.
29. The Department considered whether directions
would be an appropriate mechanism for dealing with pension-related
matters under the new section 134B of the TA 2000, but concluded
that regulations subject to the negative resolution procedure
would be more appropriate in this instance. New section 134B already
contains a power to make regulations prescribing the details of
the TUPE procedure in the context of quality contracts. Therefore
the Department considers that there is merit in adopting a consistent
approach to the various delegated powers to be conferred by new
section 134B of the TA 2000. There are also benefits to users
of the legislation in having all the relevant requirements set
out in the same format. This approach also ensures that the provisions
are subject to Parliamentary scrutiny.
30. No express provision to provide for that
scrutiny is necessary in the amendments themselves. By virtue
of section 160 of the TA 2000, regulations made under new section
134B would automatically be subject to the negative resolution
procedure.
Clause 44: Applications for registration where
quality contracts scheme in force
31. Section 6 of the Transport Act 1985 ("TA
1985") provides that all local bus services must be registered
with the traffic commissioner. However, where a quality contracts
scheme is in force in a particular area, the effect of section
129 of the TA 2000 is to suspend the requirement to register services
and provide that all local bus services, other than those expressly
excluded from the scheme, must be operated under quality contracts.
The effect of clause 44 is to insert a new provision into the
TA 1985 (new section 6B) so as to enable other local services
to be provided in such an area, alongside the quality contracts
scheme, provided the local transport authority has certified that
the service would not have an adverse effect on services provided
under the scheme.
32. An amendment to be tabled on Report will
provide for this procedure to apply not only to applications to
register a local service but also to applications to vary such
registrations. The amendment includes a power to make regulations
to prescribe cases where the procedures would not apply in respect
of applications to vary a registration in the area of a quality
contracts scheme.
33. The Department has decided that it would
be appropriate to have such a power so as to reduce burdens on
authorities and operators where applications for a variation are
made in respect of minor matters. For example, section 6 of the
TA 1985 requires an operator to vary a registration where there
is a change of address, but regulations under that section[16]
provide that no period of notice need be given. The Department
is of the opinion that it would be appropriate to disapply the
procedures contained in new section 6B of the TA 1985 in circumstances
such as a change of address. There may be other circumstances
in which it would be appropriate for the new procedures not to
apply.
34. Section 134 of the TA 1985 provides that
section 60 of the Public Passenger Vehicles Act 1981 ("PPVA
1981") applies as if Part 1 of the TA 1985 were in that Act.
Section 61 of the PPVA 1981 provides that any power conferred
under that Act is exercisable by statutory instrument subject
to the negative resolution procedure. Therefore, regulations made
under new section 6B of the TA 1985 would be subject to the negative
resolution procedure. This is consistent with the power to make
similar regulations under section 6 of the TA 1985, and the Department
believes that this provides an appropriate level of Parliamentary
scrutiny.
Clause 87: Procedure for Governance Orders
35. Clause 87 provides that orders under made
under clauses 73 and 78 to 86 of the Bill (power to establish
a new ITA, and powers to make other changes to the constitution
and powers of ITAs) will be statutory instruments subject to the
affirmative resolution procedure of each House of Parliament.
36. The Government considers that orders using
some of these powers, in particular those transferring functions
between local authorities, might fall within the hybrid statutory
instruments procedure. It has therefore tabled an amendment which
provides that an instrument made under those clauses shall proceed
as if it were not a hybrid instrument.
37. In tabling this amendment the Government
has considered that the provisions in clauses 74 and 76 of the
Bill for authorities to review governance arrangements locally,
together with the requirements in clauses 73 and 78 for the Secretary
of State to consult local representatives before making an order,
enable the necessary local consideration of proposals. It also
considers that the application of the affirmative resolution procedure
already provides each House with the opportunity to fully consider
and debate the provision made by the Order, and that the uncertainty
and delay which could be caused by the need to consider on an
individual basis whether a particular Order was subject to the
hybrid instruments procedure would be detrimental to the timely
and effective use of the powers provided by the Bill.
38. Existing provisions where "dehybridising"
provision has been made in relation to similar powers to make
secondary legislation include:
· the Housing and Regeneration Act 2008
(section 320(15), as respects orders under section 13 designating
areas suitable for development),
· the Local Government and Public Involvement
in Health Act 2007 (section 240(9), as respects orders under sections
7 and 10 which create single-tier local authorities and alter
local authority boundaries),
· the Regional Development Agencies Act
1998 (section 25(9), as respects alterations to the extent of
regions in England).
Department for Transport
October 2008
13 See in particular paragraphs 8 - 13, 27 - 30 and
135 to 143. Back
14
For example, wording such as 'the traffic commissioner for that
traffic area". Back
15
See for example new section 132D(7) of the Transport Act 2000
as would be inserted by amendment xx to be moved on Report. Back
16
See regulation 9 of the Public Services Vehicles (Registration
of Local Services) Regulations 1986 (S/I 1986/1671, amended by
1988/1879, 1989/1064, 1994/3271, 2002/182, 2004/10 and 2004/2250. Back
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