26.Section 10 provides for the Welsh Ministers to enter into local bus service contracts in respect of local bus services in order to fulfil their duty under section 5(1)(c). A local bus service contract will provide an operator with the right to operate one or more services and set out terms (these might for instance relate to matters such as frequency, timing, fares and standards of service) that the operator will need to comply with.
27.Local bus service contracts can only be awarded to operators who hold a PSV operator’s licence or a community bus permit. Where a local bus service contract is entered into in respect of a community bus service (a service which meets the requirements of section 22(1) of the 1985 Act) the contract must require that the service is provided as a community bus service and that each vehicle used in providing the service is used under and in accordance with a community bus permit.
28.It is envisaged that most of the local bus network in Wales will be grouped into franchise packages made up of one or more service(s). In practice, although this is not mentioned in the Act, it is envisaged that operators will bid for local bus service contracts as part of a procurement exercise, conducted in line with procurement legislation. (The relevant legislation being the Procurement Act 2023 and the Social Partnership and Public Procurement (Wales) Act 2023.) It is envisaged that, in the first instance, Transport for Wales will administer and manage the tendering process on behalf of the Welsh Ministers.
29.Section 11 allows the Welsh Ministers to make provision in regulations specifying terms that must be included in local bus service contracts (whether in a standard form or not). Examples of the possible subject matter of required terms are given in the section, although no duty to make provision of this type is imposed, and the list of examples is not exhaustive.
30.The power to specify required terms is intended to ensure consistency in delivery across different operators across the network. Whilst some terms will be included in all contracts, there will be some differences between different types of contracts. This is to recognise the complex geography and varied operator market in Wales.
Commentary on Sections Local Bus Service Contracts