Bus Bill Update: Tension in the House of Lords

The Bus Bill has received both close scrutiny and a degree of hostility in the House of Lords. We examine some of the key discussion points.

04 July 2016

A summary of the key provisions of the Bill can be found in our June Briefing: Bus Services Bill: congestion ahead?

Bus Bill remains on route

There is understandably a question mark over how much of a priority the Bus Bill is after the referendum decision. However, the Government appears keen to press ahead with the legislative timetable for the Bill. Lord Ahmed (the Bill's sponsor in the Lords) stated on 29 June 2016 that, in proceeding with the Bill, he was confident that the Government will meet the dates imposed by the Great Manchester devolution deal. So the working assumption (at least for the moment) must be that the Bus Bill will continue as planned. So, as the Bill reaches the halfway stage in the Lords with the first Committee Hearing on 29 June 2016, we examine some of the key talking points.

Secondary legislation: devil in the detail

A focal point of discussion in both the Second Reading and first Committee Hearing was the heavy weighting towards leaving detail to secondary legislation (regulations). There are only 26 clauses in the Bill, but they include some 28 provisions for the Secretary of State to make regulations. Some of these are potentially very wide, such as the power for the Secretary of State to pass secondary legislation dealing with "such other incidental matters in connection with franchising as the Secretary of State thinks fit". The Bill also makes extensive provision for Guidance documents, which will presumably flesh out some of the more detailed considerations in both the regulations and the Bill. This weighting is clearly a concern, both for those in the industry seeking to identify the likely shape of things to come and for those debating the Bill in Parliament. As Baroness Jones summarised, the Lords are "concerned that [they] are being denied the information and detail that [they] need to make informed decisions on the legislation".

This issue extends beyond the Bus Bill. The Delegated Powers Committee recently reported that the Government was increasing seeking to use delegated legislation to address issues of policy and principle, rather than to manage administrative and technical changes. However, it is particularly important in the context of the Bus Bill where, as Baroness Randerson concluded:

"The success of advanced quality partnerships, and of enhanced partnerships and franchising, will stand or fall on the quality of the regulations. If the regulations are too onerous, the Bill will fall into the trap of the 2008 [Local Transport] Act and prove impossible for local authorities to manage and implement, and will therefore fail. But the regulations have to be sufficiently ambitious and robust to deliver a true improvement in service."

In response to this concern, assurances were given that draft regulations and policy-scoping documents would be available during the Committee stage, but they have yet to be provided. The Government confirmed that at the same time as the Bill progresses through Parliament there would be consultation and finalisation of Regulations and Guidance. The key question is: when will we see these?

Flexibility vs prescription: striking a balance

At the heart of many of the concerns expressed in both the Second Reading and Committee, is the balance currently struck between flexibility and prescription. One of the reasons the Government is seeking to leave detail for secondary legislation is to preserve flexibility, since Lord Ahmed stated: "there is a limit to the extent that we can anticipate how these new regimes will work in practice". Secondary legislation can adapt to the changing landscape.

However, there is clearly also another concern in some quarters: being a lack of precision in the factors which Authorities "may" (rather than "must") take into account in formulating new transport schemes. There is criticism in the Lords that this is a missed opportunity to force Authorities to confront key issues facing the industry and its passengers (see below). However, the Government's line in response is that "there is an important distinction to be drawn between "may" and "must"” since the intent behind the drafting of these new schemes is to provide Authorities with flexibility to respond to local conditions (in which not all prescribed considerations would be relevant).

An opportunity to tackle key issues

Legislation like the Bus Bill often stands for decades. It is therefore understandable that the Lords are seeking to explore whether the Bill fully deals with some of the pressing issues confronting the industry. These include:

  • Reversing the decline of rural bus routes – The five and half lines given in the Impact Assessment to considering the rural impact of this Bill were described as "nothing short of an insult to rural people". In particular, clarification is sought as to whether, if the new schemes under the Bill are lead to a concentration of funds on urban use as may well happen, the Bus Service Operators Grant (BSOG) will be ring fenced to support rural routes. The Government has promised to give this issue further thought.
  • Remedying the lack of effective measures to tackle congestion – With the trade press reporting that ever increasing congestion is seriously constraining the industry, there are understandable calls for the Bill to do more to devolve sufficient powers to deal effectively with it. It is perhaps surprising this is not dealt with more explicitly in the Bill given the conclusion of the KMPG Report commission by the Government that "Operators have invested heavily in vehicles and service quality but overall performance is heavily dependent on level of road congestion". However, whilst the Government accepts the need to consider this issue it believes the new structures provide sufficient powers to tackle this.
  • Supporting certain groups – These include those who are economically disadvantaged, those in rural communities, disabled people and young people, particularly those over 16 be who are dependent on buses to attend higher education or vocational training but to whom local authorities are not currently required to extend concessionary travel arrangements. This issue will undoubtedly receive closer scrutiny in later sessions.

There is clearly a balance to be struck. The Bus Bill will give the Authorities a number of new tools: the ability to create Advanced Quality Partnerships (AQPs), Enhanced Partnership Plans and Schemes (EPPS), Franchises, Advanced Ticketing Schemes (inter-modal, inter-operator, SMARTcards, contactless payment), and Open Data (for example to support better information flows and development of customer-facing apps). On the one hand the Government has its own vision for a Bus Bill, a vision where these tools are made available but without being overly prescriptive about what factors must be taken into account and objectives which these schemes must achieve. On the other hand, as is clear from the debate in the Lords, there is concern that a lack of prescription may allow Authorities to use these new tools without having to confront some of the difficult but critical issues currently facing the industry.

Considerations for the industry

The industry will no doubt be pleased to see the Lords pushing for transparency on the shape of secondary legislation and looking to ensure that Authorities must pay more than passing regard to key industry issues, such as the grave state of congestion in key urban areas, when exercising new powers. However, industry must keep a critical eye on the passage of this Bill as there is still much which needs clarification (particularly the finer detail) and the fundamental principle of flexibility versus prescription (at least in some areas) may still be open for debate.

These issues feed into an underlying (and ongoing) industry discussion about what exactly the new measures in the Bill are going bring to the table. The concern is that the current balance in the Bill between flexibility and prescription, between "may" and "must", will enable Authorities to take vastly different approaches when considering the factors to be taking into account for, the objectives of, and the acceptable outputs from any new scheme. Whilst some Authorities might choose to place some of the concerns highlighted above at the core of their considerations, others will not. It is therefore understandable that there are strong industry voices questioning whether these new structures will reinvigorate the industry if they do not incorporate both consistency and also clear and fair protections for all stakeholders.

What next?

The transcript of the further Committee stage on 4 July 2016 will be published later this week.

Key contact

Chris Jackson

Chris Jackson Partner

  • Head of Infrastructure
  • Procurement and State Aid
  • Transport

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