Changes afoot for use of Section and Section 22 permits, according to consultation published last week
The Department for Transport (DfT) released its consultation into the future of Section 19 and Section 22 permits on 8 February. It spells significant change in England, Scotland and Wales.
The DfT now accepts that intervention is required to facilitate fair competition between permit and non-permit operators. It plans to clarify guidance so that operators and drivers are certain of their requirements.
However, the main proposal is much simpler. It is to update the Transport Act 1985, aligning it with EU Regulation 1071/2009 to clarify that permits may only be granted to and held by organisations that meet one or more of the exemptions laid out in the Regulation, and that existing permits are valid only while those exemptions remain satisfied.
To clarify, exemptions apply to organisations:
- That are engaged in road passenger transport exclusively for non-commercial purposes
- That have a main occupation other than that of a road passenger transport operator
- Engaged exclusively in national transport operations having only a minor impact on the transport market because of short distances.
The DfT cannot add to the above list, and nor can it establish ‘special rules’ using other criteria.
As a result, it is almost certain that if your organisation holds a Section 19 or a Section 22 permit and ticks none of the above boxes, you will need an O-Licence. Your drivers will thus be subject to PCV licencing and Driver CPC.
Why the change?
The DfT’s somewhat flimsy argument is that prior to a legal challenge from the Bus and Coach Association (BCA), its view was that Section 19 and Section 22 permit holders were exempt from the Regulation because they would automatically satisfy one or more exemptions.
Now that it has removed its head from the sand, the DfT accepts that permits have been issued in certain circumstances that are not covered by those exemptions. If action is not taken, that could lead to a fine being levied against the UK government.
“It has become apparent to the Department that these assumptions are no longer sustainable,” reads the consultation’s impact statement. “In particular, it is no longer possible to assume that all permit holders are ‘engaged in road passenger transport services exclusively for non-commercial purposes’… merely by virtue of compliance with the not-for-profit requirements applicable to permits.”
The consultation lays out the definition of non-commercial. It includes providing transport services that commercial operators are unwilling or unable to provide, even if the charge levied exceeds the cost of running them. In those cases, however, permit operators must be able to provide evidence of the commercial sector’s lack of interest.
What’s the impact?
The DfT says that it does not expect all operators with permits to fail to meet the Regulation’s requirements and have to transition to an O-Licence. Instead, it believes that a “significant number” of such operators will continue to use permits.
While figures relating to permit holders are estimated, the DfT suggests that at least 46% of Section 19 and Section 22 permit holders will potentially come into the scope of O-Licencing.
That will bring significant cost. Principal will be expenditure to bring drivers up to the required standard by obtaining PCV licences and/or Driver CPC qualifications.
The DfT estimates that could hit £24.7m in total. Costs for transport managers and the higher standard of MoT required are also significant, among many others.
Industry response
Community Transport Association (CTA) CEO Bill Freeman wasted little time in responding to the DfT’s consultation. The CTA expects to share more detailed analysis soon, but it is committed to representing its members’ views. Speaking to CTA members, Bill says: “There will be mixed feelings about this launch.
“Some of you will be relieved that it’s finally underway, as the uncertainty has been as debilitating to your organisations as the proposed changes. Others will feel uncomfortable engaging in a discussion that they disagree with. There are also some members who think that the best thing they can do is to make the changes and see what opportunities they present.”
That’s a fair view to take; the DfT in its consultation points out that, if permit holders successfully transition to the O-Licence regime, they can then legitimately challenge for work as they please.
The CTA also aims a thinly-disguised barb at the BCA. “We know that the people who have waged this campaign against the CT sector are clearly spooked by the prospect of you having the same licences as them, so there may be some benefits that we can explore together.”
Bill urges the community transport sector to work collectively to respond to the consultation. He also intends to approach the Mobility Matters campaign with a view to collaborative working.
The closing date for responses is 4 May.
Read the consultation at bit.ly/2GWR7lD
