Instruments drawn to the special attention of the House
Draft Franchising Schemes (Franchising Authorities) (England) Regulations 2024
Date laid: 9 September 2024
Parliamentary procedure: affirmative
Outside London, bus services are deregulated which means local transport authorities have little control over the services provided by commercial operators. The power to franchise bus services and enable local authorities to decide how they are run is currently only available to Mayoral Combined Authorities, such as Greater Manchester, and Mayoral Combined County Authorities. These Regulations would provide bus franchising powers to all other types of local authority, subject to the Secretary of State’s consent to prepare a franchising assessment. The Regulations are a key element of the Government’s manifesto commitment to give “new powers for local leaders to franchise local bus services”.
The Explanatory Memorandum is short on information about what bus franchising is, how local bus services are currently run, how many local authorities are expected to pursue bus franchising as a result of this instrument, what impact this is expected to have on local bus services and the work underway to reduce cost and other non-legislative barriers to more bus franchising. While the Department for Transport has provided helpful supplementary material which is reflected in this report, the House may wish to seek further clarity on these issues from the Minister.
These Regulations are drawn to the special attention of the House on the ground they are politically or legally important or give rise to issues of public policy likely to be of interest to the House.
Background
1.The Bus Services Act 2017 created bus franchising powers for local transport authorities (LTAs) in England, outside of London. Bus franchising powers were automatically given to Mayoral Combined Authorities (MCAs) and later, Mayoral Combined County Authorities (MCCAs) when they were created.
2.For all other types of LTAs wishing to access bus franchising powers, a two-stage process is required. First, regulations must be made to provide bus franchising powers to the particular category of LTA; and second, the Secretary of State must give their consent to the individual authority to prepare a franchising assessment (a business case for franchising). This instrument would remove the first stage of that process by providing bus franchising powers to all other categories of LTA. The requirement for consent from the Secretary of State is maintained.
Current approach and bus franchising
3.The Explanatory Memorandum (EM) to the Regulations omits any explanation of bus franchising and contains little detail on how bus services are currently run by LTAs and what difference franchising will make. In supplementary material, the Department for Transport (DfT) told us:
“Bus services outside London were deregulated in 1986. Since then, there have been two systems of bus provision–one for London and one for the rest of England. In London, Transport for London [TfL] (accountable to the Mayor) specifies what bus services are to be provided. TfL decides the routes, timetables and fares. The services themselves are operated under contract by private companies through a competitive tendering process. In the rest of the country, a deregulated market operates in which anyone, subject to minimum safety and operating standards, can operate bus services. Bus operators are free to run whatever services they like, the fares they will charge and the vehicles they will use. The LTA role is limited to subsidising socially necessary services that are not commercially viable. This has resulted in an uncoordinated network with a large array of ticketing options. Operators focus on the most profitable journeys, with local transport authorities having to subsidise operators to run journeys and routes that are not commercially viable but they consider socially and economically necessary.
Local Transport Authorities do use an Enhanced Partnership to work collaboratively with their local bus operators to support improvements to the network, but decisions on running the commercial network still rest with the operator.
Under bus franchising, the deregulated bus market is suspended, and bus operators are only able to provide services under contract to the local transport authority. Bus franchising gives local transport authorities decision-making powers over bus routes, timetables and fares. This has the potential to improve transport for users because services can be coordinated and tailored to the needs of local communities.”
Barriers to franchising
4.At present, no local authorities other than MCAs are preparing franchising scheme assessments. The EM explains that this is due to the “uncertainty over the current two-stage process for obtaining consent [which has] acted as a barrier to local authorities seeking these powers”.
5.We enquired as to whether there are any other reasons why other types of LTAs have not yet pursued franchising. The DfT responded that “some LTAs have reported that the upfront cost of franchising is a barrier and that the franchising process, including the pre-assessment and assessment stages, are onerous”. This is because LTAs are expected to cover the cost of franchising in their areas, though the DfT also stated that “the costs, timings and resource requirements of pursuing bus franchising can vary depending on the model chosen”.
6.The DfT told us that it is working with local authorities to develop proposals to make franchising easier and cheaper to deliver, as well as “building its capacity to provide tangible on the ground support to local authorities which wish to use franchising to deliver bus services”. The House may wish to ask the Minister for more detail on these proposals and for an update on the progress that has been made. The House may also wish to press the Minister on the Government’s plans and timetable for wider legislative reform to improve bus services across the country.
Impact
7.It is unclear from the EM how many LTAs are expected to pursue bus franchising as a result of the changes being made, and what impact franchising can have on local bus services. When asked for further information, the DfT provided an example:
“The largest scale example of bus franchising–outside of London–is provided by Greater Manchester. The Bee Network, Greater Manchester’s plan for a modern public transport system, was launched on September 24, 2023. Since franchising, Greater Manchester has already improved reliability, with 12% more franchised buses on time compared to the same period a year earlier, prior to franchising. Greater Manchester has also observed a growth of 5% in passenger numbers in less than a year since the bus franchising going live.”
8.This example provides promising early results. However, the DfT currently does not know how many local authorities will choose to pursue franchising. Further, the Department told us that not all local authorities are equipped to run franchising. As such, the impact of these Regulations remains unclear. The House may wish to press the Minister for further information on how many local authorities are expected to pursue franchising.
Conclusion
9.Bus franchising is an option for local authorities seeking to improve local bus services, and this instrument aims to make that easier for those types of LTA for which the current franchising process is onerous. However, other non-legislative barriers remain, and it is not clear how many LTAs will be able to overcome those in order to pursue bus franchising for their local area.
Draft Immigration and Nationality (Fees) (Amendment) Order 2024
Date laid: 12 September 2024
Parliamentary procedure: affirmative
This Order would be the first step in regularising a current anomaly whereby certain fees in the immigration system have been charged to applicants without the necessary statutory authority to do so. Whilst correcting the error may be the appropriate course of action, the situation gives rise to questions such as: how this position arose; whether past users of these services have paid fees inappropriately; and what steps are now being taken in respect of these previous payments—including consideration of compensation. The sums of public money at stake appear to be large. Moreover, our questions revealed that these fees are still being charged, despite the Home Office knowing them to be unlawful. We find this extraordinary.
To make matters worse, the Explanatory Memorandum (EM) was missing information vital to understanding the instrument; for example, the EM did not: make clear that fees have been, and are being, charged without the necessary authority; acknowledge the implication that past users of these services may have paid fees inappropriately; discuss what the Home Office intended to do about such cases; or divulge that the fees are still being charged.
We asked the Home Office to revise the EM, but the Home Office has so far refused, leaving us to fill in the missing information. This is unacceptable: the EM should provide a balanced and rounded description of the policy, its context, and any issues arising from its implementation. We will be writing to the Minister to request further information and a revision of the EM.
This Order is drawn to the special attention of the House on the ground that the explanatory material laid in support provides insufficient information to gain a clear understanding about the instrument’s policy objective and intended implementation.
Background
10.The immigration rules require an applicant for a visa (and in some other areas of the immigration system) to demonstrate proficiency in the English language at a specified level. This can be achieved in a number of ways, one of which is to use an academic qualification obtained in English awarded by an educational establishment outside the UK. In some such cases, applicants must obtain verification that their qualification meets the required standard. To do so, they must use a service (the “Equivalency and Proficiency Service”) operated by a third-party supplier, Ecctis Limited, on behalf of the Home Office. Ecctis charges applicants a fee for the service.
11.Following a review of the charging arrangements, the Home Office has identified that, because using the service and paying the fee are mandatory, these charges must be provided for by legislation. However, there is currently no such legislative backing. This instrument would correct the situation by providing the power to charge fees for the Equivalency and Proficiency Service.
12.The Order would also set a maximum level for those fees. As is customary in immigration fee legislation, the setting of a fee is a two-stage process: a first instrument is required to provide the power and to set a maximum, and a second instrument sets the actual fee at or below the maximum. This Order would set a maximum fee of £400. The Home Office told us that its intention is to lay the instrument containing the actual charges in “early December”, and that they will be set at their current levels of £140+VAT for English language proficiency and £210+VAT for qualification equivalency assessments.
Clarity of description of the policy rationale
13.In explaining the rationale for the policy change, the Explanatory Memorandum (EM) to the draft Order said that “it has been identified that it is a legal requirement that, for fees to be charged, the fees for these services need to be set within the department’s fees legislation [ … ] We are therefore, required [ … ] to make an amendment which will set a power to charge a fee and the maximum fee that can be charged by the Home Office.”
14.On questioning, the Home Office agreed that it follows that fees to date have been charged by a contractor without a legal power to do so. We put it to the Home Office that the EM was insufficiently clear on this point. The Home Office replied:
“We are content that the current EM provides sufficient background on the purpose of the SI [statutory instrument], which is to take prospective action to regulate the fees, and is clear on the rationale for placing these fees on a statutory footing.”
15.We disagree. As it stands, the EM requires the reader to deduce, from the fact that fees need to be put on a legal footing for the future, that fees have been unlawfully charged to service users in the past. This should not be necessary. We regard a full, clear and open statement of why the instrument has been brought forward as central to understanding the policy change.
Review of charges to date
16.As the EM failed to acknowledge that service users have been inappropriately charged in the past, it also did not address issues such as how this situation arose and what the Home Office intended to do about such cases. Further questioned on the latter point, the Home Office said:
“The changes we are making in this Order and subsequent Regulations to regularise the position for fees has been treated as a priority by the department. We are in the process of considering all options, including restitution schemes and retrospective legislation and are undertaking this work at pace, but cannot at this time give an indication of when this review will be complete or the specific action that is likely to be taken.”
17.It is not unusual for reviews of past public sector errors to be prolonged. The House may wish to press the Minister for their views on likely timescales in this instance and to give a commitment that the results of the review will be made public.
18.When we asked the Home Office for how long these fees have been charged, and how much has been paid over time, the Home Office said:
“Our understanding is that these fees have been charged since 2008. We are undertaking further scoping of how many people have used the service and the amount of income generated but this information is held by a third party supplier, who are under contract by the Home Office to provide this service, and is not available at this time. However, we know that over the last three years, the supplier’s revenue is in the region of £50m.”
19.We trust that the Home Office will be able to access information on users of the service and revenue, regardless of whether it is outsourced. We note that the number of people affected, and sums of money involved, are significant.
Ongoing charging
20.The EM also did not state whether these fees are still being charged at present, given that the Home Office is now aware that they are inappropriate until the legal framework is in place. Asked further on this point, the Home Office responded that it “considers it important that there is consistency in the approach to fees charged prior to appropriate provisions being set in Regulations [ … ] Until such a time as that work is completed, fees will continue to be charged as they are currently.”
21.We are shocked that the Home Office puts more weight on consistency with the past approach–which is known to be unlawful–than on consistency with the law as it stands today. It is also indefensible that this issue was not discussed in the EM: it is clearly relevant to the introduction and operation of the policy.
22.We accept that current cases may be included in any “restitution scheme” or similar mechanism, but, again, this may be some time in the future. The decision to continue charging does not appear to have been made with service users’ interests in mind: given the options of not paying the fee now, or paying and having the prospect of an uncertain reimbursement at an uncertain point in the future, a current user is likely to prefer not to pay now.
Clarity of the Explanatory Memorandum
23.Given the omissions from the EM described above, we asked the Home Office to revise and relay the EM. The Home Office refused, saying that the EM was “sufficient”.
24.Again, we disagree. As stated above, the EM should contain a full, clear and open statement of why the instrument has been brought forward. We welcome the Home Office considering options for those who have paid inappropriately in the past, but we are concerned about the treatment of current users paying fees now. In any case, this is all important contextual information for the instrument that should be in the public domain without us having to ask for and provide it.
Conclusion
25.This draft Order has some similarities to a Ministry of Justice (MoJ) instrument that we reported to the House in July 2023.1 In both cases, it came to light that a government practice was unlawful. As we said at the time, “for a government department to breach the law in this way is an inexcusable error”.
26.In both cases, the original EM was insufficiently clear on the unlawfulness of the current position and on what action was being taken in respect of those affected in the past (and, for this draft Order, ongoing). Again, as we stated at the time, “EMs laid alongside instruments should not mislead the reader or obscure issues with the policy”.
27.The MoJ did, at least, agree to revise its EM to include further information. The MoJ also pledged to keep us updated on the outcome of its review and to make its conclusions public. However, as far as we are aware, more than fourteen months later, that review has not yet been completed. We are concerned that the situation in this draft Order could result in another long-running review, leaving those affected out of pocket and frustrated for a lengthy period.
28.Moreover, this is yet another case where the Home Office seems unaware that the role of an EM is not just to explain the policy change in the narrowest possible terms.2 The EM should provide a balanced and rounded description of the policy, its context, and any issues arising from its implementation.
29.We will be writing to the Minister, Seema Malhotra MP, requesting further details about the breach and what steps the Home Office is now taking, and asking again that the Home Office revises the EM.
Windsor Framework (Retail Movement Scheme: Plant and Animal Health) (Amendment etc.) Regulations 2024 (SI 2024/853)
Date laid: 9 August 2024
Parliamentary procedure: negative
The purpose of this instrument is to expand the list of agri-food goods imported for retail into Great Britian (GB) from the rest of the world that can move to Northern Ireland (NI) under the Northern Ireland Retail Movement Scheme. This is achieved by making changes to the entry requirements for importing these goods into GB, so that the requirements align with the EU-derived entry requirements for importing such goods into NI. The Department for Environment, Food and Rural Affairs (Defra) says that the changes aim to support the effective functioning of the UK internal market.
We have received five submissions which raise concerns about the instrument, including about: the constitutional significance of the changes; the imposition of EU rules on England, Wales and Scotland; the continued existence of a border in the Irish Sea; a lack of consultation on the policy; and the range and origin of products covered by the Regulations. Defra says that the changes respond to demands from industry, and that with regard to the imposition of EU rules, the “UK will always be able to choose how to respond to changes in the EU’s import controls for any of the affected products”.
This instrument is drawn to the special attention of the House on the ground that it is politically or legally important and gives rise to issues of public policy likely to be of interest to the House.
30.These Regulations make changes to the entry requirements for certain plant and animal products which are imported for retail into Great Britain (GB) from outside the UK or the EU (“rest-of-world”), so that they match the EU-derived entry requirements for imports of such products into Northern Ireland (NI).3 According to the Department for Environment, Food and Rural Affairs (Defra), this will expand the list of rest-of-world products that are eligible to move from GB to NI under the Northern Ireland Retail Movement Scheme (NIRMS). NIRMS was introduced under the Windsor Framework to ease the flow of goods from GB to NI by reducing the certification and checking requirements of these goods.
31.The instrument covers a range of products such as fruit, cut herbs/flowers as well as processed poultry meat products from EU-approved plants in China and Thailand. Defra explains that the products have been chosen in response to demands from industry, and that they are commonly used as ingredients or are sold in significant quantities and are therefore critical for maintaining choice for NI consumers.
What the changes will mean in practice
32.The Explanatory Memorandum (EM) states that the instrument “adjusts” the GB entry requirements for the relevant goods, so that they match the EU-derived entry requirements for those goods into NI. Asked for further information on what these adjustments will mean in practice and whether they will lead to additional costs for business importing these goods into GB, Defra explained:
“For processed poultry meat products from Thailand and China, this means they will be subject to the same animal health requirements to enter Great Britain as they are to enter Northern Ireland. Fruit, cut herbs and cut flowers in scope of the SI [statutory instrument], will be subject to the same physical and documentary check rates as they are to enter Northern Ireland. While the majority of products will retain the same rate of checks as they do now to enter Great Britain, identity and physical checks on basil and some cut flowers entering Great Britain will increase. In addition, cut roses from certain countries will require additional attestations of pest freedom. There will be no changes to the phytosanitary certificates required for these products. The costs of these changes to businesses have been assessed to be negligible.”
33.Defra emphasises that the changes made by the instrument were sought by business. We asked the Department whether it had consulted companies which import relevant goods into GB but do not move them on to NI, as these businesses may now have to deal with stricter controls and therefore higher costs, without benefiting from the NIRMS. Defra replied:
“We consulted businesses operating in Great Britain and Northern Ireland to identify priority products. Trade bodies representing retailers in both Great Britain and Northern Ireland were also consulted. The Devolved Governments of Scotland, Wales and Northern Ireland have been involved in the development of this policy.
Businesses will need to familiarise themselves with the new requirements and changes in controls. The De Minimis Assessment identified negligible costs associated with the certification changes to Products of Animal Origin (PoAO) and the changes to frequency of checks on plant products.”
34.The changes made by this instrument will ease the movement of certain goods from GB to NI via the NIRMS. They will also mean that for some of these goods, there will be additional entry requirements when they are imported into GB. We note, however, that Defra expects the costs of these changes to business to be “negligible”.
Concerns raised about the instrument by external submissions
35.We received five submissions which expressed a range of concerns about the instrument. Due to time constraints, we were only able to put the first three submissions we received to the Department. All submissions and Defra’s response have been published in full on our website.4
36.A submission from the Universal Meat Company suggested that there had been no consultation with traders on the exemption list of countries and questioned specifically why EU approved meat plants in China had been included in the instrument but not EU approved plants in Brazil. The Department responded:
“The list of products which has been included in the scope of this legislation was developed with industry stakeholders in the United Kingdom, on the basis of factors such as volumes of trade (and on the impact on supply chains). The Government could, in future, decide to add further products to the list, and we will keep the list under ongoing review to ensure that we are able to reflect and respond to industry feedback. To that end we will continue to engage comprehensively with industry on this matter, as we have done previously with Universal Meats.
It should be noted that Brazilian poultry can be moved under the NIRMS scheme if it has entered an EU BCP [Border Control Post] before entering the UK. Moreover, products can be imported directly into Northern Ireland; and when this is so, as of 30 September the new Tariff Rate Quota solution will enable traders to take advantage of over 13,000 tons of lamb, beef, and poultry worth of UK tariff quotas every year. This reflects Northern Ireland’s integral place in the UK.”
37.A submission from Jim Allister KC MP (Traditional Unionist Voice) criticised a lack of public consultation and also raised concerns about the imposition of EU rules and standards and the continued existence of a border in the Irish Sea. Similarly, a submission by Mr Christopher Howarth criticised the alignment with EU law as a result of this instrument. The submission by Lord Morrow of Clogher Valley (Democratic Unionist Party) argued that the changes were constitutionally significant. It also criticised the imposition of EU law on the UK without the UK Parliament having the power to scrutinise or amend the legislation, and that the instrument neither secured the UK internal market for goods nor the removal of the border in the Irish Sea. The submission by Baroness Hoey of Lylehill and Rathlin raised similar concerns about the imposition of EU law and an international border.
38.In response to the submissions by Mr Allister and Mr Howarth, Defra explained:
“The UK will always be able to choose how to respond to changes in the EU’s import controls for any of the affected products. If the UK and EU regimes diverge, the UK will determine whether to adopt measures in order to match.
This SI delivers on specific commitments set out in the ‘Safeguarding the Union’ Command Paper in January 2024,5 therefore no new policy has been introduced. Furthermore, this safeguards the ability for these goods to move under the simplified arrangements provided under the Northern Ireland Retail Movement Scheme, and thus support trade between Great Britain and Northern Ireland. On this and other aspects of the NIRMS arrangements, there has been extensive engagement with industry and stakeholders in Northern Ireland.”
Conclusion
39.The submissions we received raise a range of concerns which the House may wish to pursue further with the Minister. Regarding the extent of consultation on the policy, the Department told us that the changes respond to demands from industry and that it had engaged with and consulted businesses. It is not our role to adjudicate between what appear to be different views on the extent of consultation that was undertaken. We note, however, that consultation can provide opportunities not only to improve a policy but also to help increase public confidence in the policy. The submissions we have received highlight the importance of consulting widely, especially where legislation deals with a policy area that is contentious and where interested parties have strongly felt views, as in this case of making changes under the Windsor Framework.
1 Administration of Estates Act 1925 (Fixed Net Sum) Order 2023 (SI 2023/758), drawn to the Special Attention of the House in 47th Report (Session 2022–23, HL Paper 236).
2 For other recent examples, see 20th Report (Session 2023–24, HL Paper 94) and 16th Report (Session 2023–24, HL Paper 78).
3 Article 9 of Regulation (EU) 2023/1231 provides a route for non-EU rest-of-world retail goods to become eligible to use the Northern Ireland Retail Movement Scheme to move from Great Britain into Northern Ireland.
4 SLSC, ‘Scrutiny evidence’: https://committees.parliament.uk/committee/255/secondary-legislation-scrutiny-committee/publications/8/scrutiny-evidence/.
5 Northern Ireland Office, Safeguarding the Union (31 January 2024): https://www.gov.uk/government/publications/safeguarding-the-union.