102.Sections 124 to 134 enable local transport authorities, either alone or jointly, to make a Quality Contract (QC) scheme, provided that they are satisfied that it is the only practicable way to implement their bus strategy (or strategies) and also that the scheme will implement it (or them) in a way which will deliver best value, i.e. be economic, efficient and effective (section 124(1)). Under a QC scheme, the authority will determine what local services should be provided in the area concerned (and to what standard) and will let contracts with bus operators granting them exclusive rights to provide services to the authority’s specification.
103.Section 124 defines what a QC scheme is and what a “quality contract” itself is. It imposes an obligation on the authority to keep under review operators’ compliance with the obligations imposed on them by QCs.
104.Sections 125 and 126 require an authority to publicise and consult upon a proposed scheme before submitting it to the Secretary of State or NAW (“the appropriate national authority”) for approval, stating the reasons why they want to make the scheme. There is a requirement in particular to consult operators and users’ representatives. There is provision, when a scheme has been submitted for approval, for operators affected by it to put objections to the appropriate national authority. That authority may approve the scheme only if satisfied that it is in the public interest (section 126(4)(b)) and may approve it with modifications after interested persons have been consulted (section 126(5) and (6)).
105.Section 127 describes what a scheme must contain and in particular provides that certain services may be excluded from it (subsection (4)) and that it may vary or revoke a QP scheme (subsection (6)). It may not come into operation for at least 21 months after it is made. This is in recognition of the fact that some bus operators currently operating in the area may lose the right to do so, and must be allowed due time to adjust and redeploy assets. A scheme may not last for more than 10 years. Section 128 provides that the operation of a scheme may be postponed.
106.Section 129 provides that once a QC scheme is in operation sections 6 to 9 of the 1985 Act cease to have effect in the relevant area and no local service may be provided in that area except in accordance with a QC. Section 6(2) of that Act provides that:-
“no [local] service shall be provided in any traffic area in which there is a stopping place for the service unless –
and sections 7 to 9 make supplementary provision.  The normal role of the traffic commissioners in monitoring services is therefore excluded and enforcement becomes a matter for the local transport authority in accordance with the terms of their QC – see section 124(7).  (A “traffic area” is an area designated under the provisions of section 3 of the Public Passenger Vehicles Act 1981 and a traffic commissioner is appointed for each area by virtue of section 4 of that Act.)
107.Where a service is excluded from a QC scheme, however, sections 6 to 9 of the 1985 Act continue to apply to it and the traffic commissioner may take action for breach of any conditions under which the service is excluded (section 129(2) and (3)).
108.Section 130 provides for the letting of individual contracts. Tenders must be sought by general invitation no later than 3 months after the making of the scheme and contracts when let may last no more than 5 years. Tenders may only be accepted from licensed operators of public service vehicles or persons holding a community bus permit under section 22 of the 1985 Act (subsection (5)). Section 131 provides for cases where the normal tender procedure does not apply. Express provision is made for emergencies but the section may be extended by regulation to cover other cases. Regulations may limit the duration of these emergency contracts so as to ensure that the provisions of section 118 are not improperly circumvented.
109.Section 132 makes provision for the variation or revocation of a scheme. There is also a power, in section 133, for the appropriate national authority to make regulations, allowing it to revoke the scheme before it comes into operation in circumstances set out in the regulations (for example, an unexpected collapse of the tender process).
Commentary on Sections Part II: Local Transport Sections 124 to 134: Bus Services: Quality Contracts schemes