The Act Franchising frameworks and franchise agreements – inserted sections 13A and 13B
179.These sections authorise the entering into of franchise frameworks and agreements, set out what a franchising framework is and the effect it has, and define what is meant by a franchise agreement for the purposes of the chapter.
180.Section 13A(3) sets out the main components of a franchising framework. It should, however, be read in conjunction with section 13D (proposed franchising frameworks) which contains a number of specific requirements about the content of a franchising framework.
181.A franchising framework gives a local transport authority the power to determine what local services are required in the area of the framework, set standards for those services and make decisions about what facilities may be required to support them. The framework can also specify types of service which should not be affected by the making of the framework (such as those of tour operators who use stops in the area but are not providing local services in the usual manner10).
182.Section 13B provides that by making a franchising framework, the local transport authority disapplies several of the provisions relating to the registration and provision of local bus services under the 1985 Act. Those provisions generally allow persons who hold the relevant PSV operator licences to register and operate local services in any area that they choose. Under franchising, only those operators who have entered into a franchise agreement will be permitted to provide services in the area of the framework(11).
183.Operators who enter into franchise agreements may be paid for providing the services or indeed may pay for the opportunity to provide them. This reflects that in different prevailing market conditions it may be necessary to pay operators and in others that the profitability is such that operators will pay for the exclusive right to provide them. However, in a situation where a local transport authority spend money on entering into a franchising agreement, and that spending could be considered to be subsidising the provision of services under section 88(1) of the 1985 Act, section 13A(7) disapplies the requirements contained in sections 88 to 92 which would otherwise require to be satisfied to provide a subsidised service.
184.A franchising framework may be made in respect of the whole or any part of the local transport authority’s area. Where two or more local transport authorities(12) work together to make a franchising framework, the franchising framework can cover all of the combined areas or a part of the combined area. This reflects the fact that local services frequently cross between the areas of local transport authorities.
185.Section 13A(2), read in conjunction with section 13C, requires a local transport authority to follow the process in chapter 2 in order to make a framework.