The Act Regulatory framework
93.The regulation of the provision and funding of bus services in Scotland is largely devolved to the Scottish Parliament. The regulatory framework is similar to that in England (outside London) and Wales and is based on a commercial market with some government subsidy for bus services (via BSOG) and funding for concessionary travel and with a range of transport authority powers including the ability to subsidise otherwise non-commercial services where necessary.
94.The legal framework for bus services is primarily contained in the following Acts:
	Transport Act 1968;
	Public Passenger Vehicles Act 1981;
	Transport Act 1985 (“the 1985 Act”);
	Transport (Scotland) Act 2001 (“the 2001 Act”);
	Transport (Scotland) Act 2005.
95.There are also numerous statutory instruments that sit below these pieces of legislation setting out the detail of the various regimes.
96.The Scottish Government’s agency, Transport Scotland, sets the national policy framework and provides funding to support bus services.
97.The traffic commissioner for the Scottish Traffic Area is the independent licensing and regulatory authority. The Commissioner is a ‘cross border public authority’ with reserved and devolved responsibilities. Licensing of bus operators (Public Service Vehicles (PSVs)) and disciplinary action against PSV drivers are reserved to the UK. Registration of services is devolved and subject to the Public Service Vehicles (Registration of Local Services) (Scotland) Regulations 2001 The regulatory regime is designed to ensure that bus service operators are of good repute and that services are introduced, varied or cancelled in an orderly fashion and operated safely and reliably as registered.
98.Provided that an operator registers a service with the Office of the Traffic Commissioner they can operate any route they wish to any timetable (subject to certain limitations where a quality partnership or contract scheme is in place or where the traffic commissioner has imposed a traffic regulation condition at the local transport authority’s request). Bus operators use their commercial judgement to determine service routes and frequencies. This market based approach encourages innovation and entrepreneurship and provides incentives for operators to bear down on costs, provide new services and develop new types of service. The statutory process for registration of bus services was changed in January 2016 to extend the time period for pre-registration engagement with local transport authorities.
99.Local transport authorities (defined in paragraph 102 below) are responsible for ensuring that bus services in their area meet local needs. Under the 1985 Act, they have a duty to secure the provision of services that they deem to be socially necessary and that would otherwise not be provided commercially and a power to provide subsidy to operators to provide those services.
100.Local authorities are also generally responsible for infrastructure – including bus stations and stops, bus lanes and other priority measures – and ensuring the provision of passenger information. Through the planning system and management of roads and parking, local authorities have a significant influence on the context in which services have to operate.
101.The 2001 Act gave local transport authorities wide ranging powers to work with operators in improving bus services, including quality partnerships and quality contracts (a kind of franchising).