The Bus Services Act 2017 has received Royal Assent with little fanfare. What does it mean for operators?
The Bus Services Act 2017 received Royal Assent and quietly arrived onto the statute books on 27 April during the election purdah.
The lack of fanfare reflected the development of the legislation itself. During its 11-month passage through Parliament the Bill attracted broad parliamentary consensus, despite being one of the most radical reforms of powers since deregulation in 1985.
Current status
The core new bus powers and obligations come into force on 27 June and remain largely intact as set out in the bill: Advanced Quality Partnerships (AQPs), Enhanced Partnership Plans and Schemes (EPPS) and Franchising.
So too are proposed obligations on open data sharing and powers to make multi-operator/multi-modal ‘advanced ticketing schemes’; regulations requiring accessible passenger information for disabled people.
The devil is in the detail, reserved for regulations and guidance expected from the Secretary of State for Transport soon after the General Election. Consultation on draft regulations and guidance in February/March gave a sense of the underlying detail and, perhaps, where some of the challenges will lie.
Some key points from the Act and consultation proposals are summarised in the table (below).
The DfT’s proposed general guidance reminds local transport authorities (LTAs) of its suggested ways to improve bus services, with varied case study examples. The general guidance reinforces the Government's intention to make the Bus Services Act a ‘toolkit of options’ rather than advocating any particular option.
Advanced QPs
Previously under a Quality Partnership (QP) an authority was required to invest in improved facilities (e.g. bus stops or bus lanes) and operators wanted to use them were required to provide a service of a minimum standard.
The AQP structure offers more flexibility for LTAs as they can agree to take ‘measures’ that indirectly improve bus services, for example, increasing car park charges and/or pro-bus facilities.
In addition, the scope of what LTAs can prescribe that operators provide has increased to include for example, smart ticketing. The risk is that an AQP could potentially be a one-sided mechanism in the absence of a robust consultation, assessment and objection mechanism for operators.
The current proposals largely mirror the existing QP process and allow LTAs to commit and include existing facilities in a partnership if they are over five years old (without the previous 20 year limitation) if no operator objects.
As with existing QPs, when it comes to setting maximum fares or frequencies, operators can object on the basis of workability or commercial viability.
Enhanced Partnership
EPPSs have attracted interest around the potential to create franchise-like local services and ticketing through overarching partnership frameworks.
Key concerns at the bill stage included ambiguity over what appeared to be onerous information requirements on operators to support the development and operation of EPPSs and the threshold of qualifying objections that would block the introduction of an EPPS.
Draft regulations indicate that operators could also be asked to provide information including:
- How and when services are used
- Structure of fares for journeys
- Types of tickets used, and by particular types of passenger
- Time taken for journeys, and parts of journeys including punctuality
- The total distance covered by all vehicles
The proposals (so far) steer away from cost and revenue information but some local authorities are pressing for this.
Current proposals on objections contemplate two tests based on a combination of market share and number of operators, intended to balance the voices of large and small operators. If either test is satisfied, the proposals cannot progress until they are revised and the operators are given another opportunity to object.
The first test proposes that operators representing 25% of operated mileage should be able to object, with that 25% being made up of at least three operators.
The second test proposes at least 50% of operators – representing more than 4% of operated mileage – must object. The number of operators and percentages were in the consultation, but could change.
Franchising
Understandably there are significant concerns over the detail of franchising. The Government has confined the powers to Mayoral authorities (and other pre-approved authorities such as Cornwall).
Like for EPPS, tThe Act has confirmed that local authorities will have extensive information request powers to develop and assess a case for franchising. The draft regulations have addedinclude the right to request information for fixed and variable costs of operating; and vehicles used.
As the word ‘confidentiality’ does not appear once in the Act (or draft regulations), operators are concerned
The proposed regulations and guidance do provide more detail and go some way to reinforcing the fact that, while decision-making is being devolved, a robust business case is required.
References to the ‘five business case’ model of public decision-making is nothing new. Explicit references to the Treasury's ‘Green Book’ and DfT's specific guidance provide some reassurance that the expected quality of decision-making at local level is not intended to be any less rigorous than that of central government.
The draft regulations provide greater clarity on what a robust audit should include, including suggested content headings, for example verifying sources of information relied upon by an authority. Importantly, reassurance is given that it is not about the decision, but the process including the accuracy and robustness of information used.
Next steps
The outcomes of the Mayoral elections confirm the extent to which the new powers under the Act are likely to be tested.
Although the Act arrived in a low-key way, the promise of local bus service reform has featured heavily in Mayoral campaigns underpinning wider transport discussion.
This article was prepared by Chris Jackson, Brian Wong, Lloyd Nail, and Nicola Kyle of law firm
Burges Salmon LLP www.burges-salmon.com
