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August 09 2017
By Tim Deakin

Tim is the Senior Journalist at routeONE magazine is also the title’s chief test driver, with considerable vehicle knowledge

DfT ends operations of tenders under permit regs

Community transport left in crisis as Stephen Fidler confirms enforcement of EC Regulation 1071/2009

Operating tenders under S19 or S22 permits will no longer be allowed

Community transport is reeling after the Department for Transport’s (DfT) decision to enforce EC Regulation 1071/2009, which prohibits the operation of competitively-tendered work under Section 19 and Section 22 permits.

All operators undertaking tendered work thus require an O-Licence, and their drivers must hold unrestricted driving entitlement along with DCPC cards, contrary to current accepted arrangements.

Head of Buses and Taxi Division Stephen Fidler says that the ruling follows a decision issued by DVSA to an operator using permits to undertake tendered work. Its drivers were paid but not all held DCPC cards or unrestricted licences.

The only derogation that is likely to be applicable to operators using permits is for those that are engaged in work exclusively for non-commercial purposes, or which have a main occupation other than that of a road passenger transport operator.

O-Licenses required

Mr Fidler adds that employing drivers and undertaking contracts won in contestable markets and/or in exchange for fares charged at more than nominal rates cannot be regarded as working exclusively for non-commercial purposes, even if the operator is a charity or another not-for-profit organisation.

Additionally, he says that if an operator undertakes any work not exclusively for non-commercial purposes, then it may not operate any vehicles under a permit.

Operators relying on permits inappropriately will need to bring themselves into compliance, applying for O-Licences and ensuring that drivers hold the relevant qualifications.

A consultation will be held in the autumn concerning the changes required to current guidance and amendments to the Transport Act 1985 to clarify matters for holders and issuers of the permits.

The news has sparked panic at the Community Transport Association (CTA). Chief Executive Bill Freeman has written to Buses Minster Jesse Norman requesting a meeting to discuss how the matter will be handled.

Mr Freeman says that enforcement agencies should “hold off” action against organisations that are in breach of the Regulation until the consultation is complete. He adds that where tenders are operated using the permits, they should be allowed to continue during a ‘handover period’.

“Local authorities should also see whether services… could be run under a grant agreement, where no competitive tendering would be necessary,” he says.

Operators’ relief

The DfT’s decision has been welcomed by the operators that had pressured for enforcement of the Regulation. “Abuse of the permit system has led to this,” says Martin Allen of the Bus and Coach Association (BCA). “The blame lies solely with the CTA and its members that employed transport consultants to manipulate the rules.”

Mr Allen questions Mr Freeman’s request for grant support. “An important recommendation from a decision regarding state aid concerned gifted services without competition. Awarding grants [in those circumstances] would be a breach of EU and domestic competition rules.”

He adds that the BCA will “strongly object” to applications from permit holders for O-Licences on the grounds of fair competition and permit holders having been in receipt of state funds for vehicles.

The CTA advises its members to continue operations as usual for the time being.

Read Mr Fidler’s letter to Section 19 and 22 permit holders and issuers here;

Read Mr Freeman’s letter to Mr Norman here.

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Transport Benevolent Fund