Accessible Caring Transport’s charity operations are ‘non-commercial’, rules TC
Accessible Caring Transport (ACT)’s operations are non-commercial, Traffic Commissioner (TC) Nick Jones has ruled, as he renewed four Section 19 (S19) permits and two Section 22 (S22) permits for nine-16-seat vehicles.
However, he refused to renew a S19 permit for an eight-seat vehicle held by the Rhondda Cynon Taf-based charity, holding that such vehicles should be operated under a private hire licence, which made it difficult to see how it could then be exclusively non-commercial.
‘Without view to profit’
The TC said that TCs make up but a fraction of the total number of issuing bodies and could not make general policy in respect of the decision-making process.
TCs had put in place administrative processes in an endeavour to ensure that permit cases referred to TCs were dealt with consistently and in as efficient a manner as possible, pending action following the recent consultation on legal changes and pending resolution of any legal challenge.
TCs could only apply the law as made, subject to any interpretation by the higher courts. He was aware that there was ongoing litigation, which might result in the High Court providing a binding statement on the law.
The criteria for section 19 and 22 permits were different. Most notable were the requirements that the vehicle was not being used for the carriage of members of the general public, nor with a view to profit nor incidentally to an activity which was itself carried on with a view to profit.
“Without a view to profit” was a significantly different test to that for “commercial”. An applicant could provide evidence to the issuing body of the costing involved in the provision of the service, including salary costs, and an issuing body could make a determination on whether the intention was to make a profit.
It was important to be clear that it was the intention that was important, not the actual outcome. The failure to make a profit was not evidence that the intention to do so was not there. It might be permissible to make a surplus provided that that was reinvested in the operation or other charitable work. Each case must turn on the evidence provided.
No definition
At the time of the hearing the UK had not legislated to give effect to any derogation relating to a minor impact on the transport market because of the short distances involved. Any changes would not come into force until October of this year.
It remained the position that an applicant who sought to rely on one of the exemptions to Regulation EC 1071/2009 had the legal burden to satisfy an issuing body that it fell within scope of the exemption, namely:
- Road passenger transport services exclusively for non-commercial purposes, or
- which have a main occupation other than that of road passenger transport operator.
There was no definition of non-commercial in the legislation, although he was aware that the term was subject to ongoing judicial review proceedings.
Arguments and evidence that services were operated non-commercially had to be considered. Evidence of tendering processes and lack of general interest from PSV-licensed operators might assist in the deliberations.
There were arguments that permit operators had a lower cost base than licensed PSV operators. Just because a price quoted by a PSV operator was deemed excessive it did not on its own account provide conclusive proof that the service was being operated non-commercially.
ACT overview
In the present case it was made clear on behalf of ACT that it relied on the exemption in EC 1071/2009 referring to road transport services exclusively for non-commercial purposes.
An overview was provided on ACT, which was based in the Mountain Ash area and provided community transport to local people living in isolation, elderly and people with disabilities. People were taken to different places on day trips, shopping trips and appointments. Some school contracts were also taken out for individuals with disabilities taken to and from local schools.
The charity owned nine vehicles, which were 12-seater minibuses. It also owned an accessible car, which was adapted to fit two wheelchairs. It fell within the category of an eight-or-fewer-passenger-seat vehicle.
There were a range of factors in seeking to determine whether ACT was exclusively non-commercial. There had not even been a hint of withholding any financial information from him. In this case, as a limited company by guarantee the profits were reinvested.
That also flowed from ACT being a registered charity. If any profits were anything other than nominal, then that would also be an indicator of the organisation being commercial, with funding for provision to expand. In this case profits were either non-existent or modest with cross-funding of the services.
Some charities were also commercial enterprises, and so the mere fact that ACT was a charity did not in itself address the issue of “exclusively non- commercial”.
No competition
An obvious issue was how were contracts or services procured, as it appeared to happen that contracts were allocated using the same IT portal as that for a commercial enterprise.
At first blush use of an open tendering system would suggest a commercial enterprise and an inability to fall within the exemption set out in EC 1071/2009.
However, the evidence from Rhondda Cynon Taf Council demonstrated that there was no genuine competition and the exercise was not a commercial one at all.
There was no problem in paying drivers at or slightly above the minimum wage. In this case all drivers and virtually all employees were paid at the minimum wage. All the staff were PAYE and were insured as employees. None of the directors or staff received any form of bonus or incentive.
He did not have a problem with the fact that drivers were trained to have the CPC qualification. He appreciated that that was not universally applied across GB for other community licences. However, he regarded the requirement for drivers to have driver CPC accreditation as a decent safeguarding issue and did not consider it an indicator as to whether or not an organisation was exclusively non-commercial.