134.Section 152(2) amends the criteria by reference to which local authorities must decide which tender to accept in the case of tenders for additional subsidised public transport services under section 9A of the 1968 Act and section 63 of the 1985 Act (which are mentioned further at paragraph 140 below). It introduces a new ‘best value’ test by requiring local authorities to have regard to economy, efficiency and effectiveness and also to have regard to the relevant bus strategy, and environmental issues, namely the reduction or limitation of traffic congestion, noise or air pollution. Section 89(3) of the 1985 Act (which prohibits the inclusion of employment conditions in the terms of tender) is repealed by virtue of Schedule 31 (Part II).
135.Section 154 makes new statutory provision for grants to bus operators, including power to make regulations as to the classes of bus services for which grant may be paid, and the method of calculation. If and when introduced, this power will replace the current Fuel Duty Rebate (“FDR”) scheme under section 92 of the Finance Act 1965 with a more flexible power enabling grant to be paid by the Secretary of State or the NAW to bus operators on a different basis from the present scheme. Provision could, for example, be made for differential rates of grant to encourage the use of more environmentally friendly fuels or vehicles.
136.Section 155 makes alternative provision to section 111 of the 1985 Act (traffic commissioners’ powers in respect of unreliable or unregistered services) as from the time when FDR is replaced by section 154. That section presently allows the traffic commissioners to demand repayment of 20% of eligible FDR in the event of an operator being found to have contravened section 6 of the 1985 Act. Under this section, the traffic commissioners will be able to impose a financial penalty. The maximum penalty is £550 (or such other sum as may be prescribed by order - subsection (3)(b) - multiplied by the number of vehicles the operator is licensed to use under his public service vehicle licence, representing approximately the same level of penalty as the current penalty. There will continue to be a right for operators to appeal to the Transport Tribunal, as now.
137.Sections 156 and 157 empower the Secretary of State or NAW to make grants to local transport authorities other than PTAs (section 156) and to PTAs (section 157) for general local transport purposes. Grants may be paid subject to conditions or not. One effect of these sections is to put on a permanent statutory basis support for rural local transport in England and Wales which is currently covered by special grant reports approved annually by Parliament under section 88B of the Local Government Finance Act 1988.
138.Section 158, with paragraph 22 of Schedule 11, amends the present power of the traffic commissioner under section 111 of the 1985 Act to impose a penalty on a bus operator, if he fails “to a significant extent” to operate his services as registered under section 6 of the 1985 Act. Currently the commissioner must impose a penalty of 20% of the FDR rebate paid in the previous three months. The amendments will enable a commissioner henceforth to impose a penalty between 1% and 20% and he will no longer need to satisfy himself that the operator has failed “to a significant extent”, thus allowing a more flexible, and perhaps more frequent, use of the power. (This amendment only has effect, however, until such time as section 111 is replaced by the provisions of section 154.)
Commentary on Sections Part II: Local Transport Sections 152(2) and (3) and 154 to 158: Financial provisions