Bus Services (No. 2) Bill [ Lords ] (Fourth sitting)

The Committee consisted of the following Members:

Chairs: Dr Rosena Allin-Khan, Sir Roger Gale, Carolyn Harris, Sir Edward Leigh, † Dame Siobhain McDonagh, Sir Desmond Swayne

† Aquarone, Steff (North Norfolk) (LD)

Berry, Siân (Brighton Pavilion) (Green)

† Conlon, Liam (Beckenham and Penge) (Lab)

† Dearden, Kate (Halifax) (Lab/Co-op)

† Egan, Damien (Bristol North East) (Lab)

Gardner, Dr Allison (Stoke-on-Trent South) (Lab)

† Hack, Amanda (North West Leicestershire) (Lab)

† Hall, Sarah (Warrington South) (Lab/Co-op)

† Kohler, Mr Paul (Wimbledon) (LD)

† Lightwood, Simon (Parliamentary Under-Secretary of State for Transport)

† Mayer, Alex (Dunstable and Leighton Buzzard) (Lab)

† Mayhew, Jerome (Broadland and Fakenham) (Con)

† Myer, Luke (Middlesbrough South and East Cleveland) (Lab)

† Newbury, Josh (Cannock Chase) (Lab)

† Race, Steve (Exeter) (Lab)

Robertson, Joe (Isle of Wight East) (Con)

† Smith, Rebecca (South West Devon) (Con)

Simon Armitage and Adam Evans, Committee Clerks

† attended the Committee

Public Bill Committee

[Dame Siobhain McDonagh in the Chair]

Bus Services (No. 2) Bill [Lords]

09:25:00

I remind Members to switch electronic devices to silent, and to send their speaking notes to hansardnotes@parliament.uk. Teas and coffees are not allowed during the sittings. If gentlemen want to take their jackets and ties off, that is fine by me. The last thing I want is a Member to collapse in the heat; that overrides any idea of sartorial elegance. When I call Members to speak, I will endeavour to call their party as well to assist people in the Public Gallery. Clause 14 Socially necessary local services Amendment proposed (26 June): 6, in clause 14, page 10, line 27, leave out subsections (5) and (6).—(Simon Lightwood.) This amendment removes the requirement for the Secretary of State to carry out an assessment of the impact of ending the £2 bus fare cap and of the level of employer’s national insurance contributions. Question again proposed, That the amendment be made.

I remind the Committee that with this we are discussing clause stand part.

It is a pleasure to serve with you in the Chair, Dame Siobhain. I have concluded my remarks on this group.

It is a pleasure to serve under your chairship, Dame Siobhain. Before I came to this place, I sat on the highways and transport scrutiny committee at Leicestershire county council, so I have spent a lot of my professional life talking about buses. As is not out of the ordinary for someone living in a rural or semi-rural constituency, however, I have also spent a lot of my personal life talking about them, as cuts and broader threats to our services are often the subject of conversation around the dinner table. We all have residents such as those my hon. Friend the Member for Middlesbrough South and East Cleveland spoke about in our previous sitting. For example, my constituent, Jacky, fought hard to reinstate the bus service in Whitwick in my constituency, and won, ensuring that people can get to the local doctor and pharmacy. That is a socially critical service. A few years ago, the service between Coalville in my constituency and Hinckley in the neighbouring constituency was withdrawn at short notice in the middle of an academic term. North west Leicestershire and Hinckley both have further education colleges, and that essential link between the two was withdrawn in the middle of people’s courses. If the local authority had responded to campaigners then, it would have realised that the bus route between those two urban parts of Leicestershire was a socially necessary service. In big cities, cutting one service leaves a dent, but in rural areas such as mine, it leaves a crater—and craters have been appearing all over my constituency. Bus services were cut by 62% under the previous Government. What bus providers and councils see as cutting costs, we see as cutting lifelines to education, jobs and healthcare—cutting connections with our communities. Members can imagine my constituents’ frustration when they heard a few weeks ago that notice had been served on a route between Ashby and Loughborough. The local authority has found an alternative to protect the service, but the timings are such that students now have to catch their bus even earlier to get to college. Bus services are not just about transport; they are about opportunity, inclusion and dignity. When a young person in Measham cannot reach their college in Loughborough, or an elderly resident of Ibstock cannot get to their medical appointment, that is not an inconvenience but an erosion of their independence. We cannot afford to keep asking our communities to do more with less. That is why I welcome the Bill’s ambition. Finally, we have committed the resources that are needed to protect socially necessary services in my community and many others.

Clause 14 is so important, because it is about socially necessary routes—those that are critical to the community. It explicitly includes employment and, as the Minister conceded last week, also catches things such as hospital appointments, GP appointments and education. Throughout the Committee stage, the Minister has hidden behind localism. Now, I am a Liberal, so subsidiarity is part of my DNA; I believe in devolving power, but national Government must not wash their hands of their responsibilities. It is reminiscent of the old Conservative trick from the Thatcher era, of Government distancing themselves from their responsibilities. Funding is crucial, but as we heard in the debate last week on amendment 54, the Minister says it is not for Government to decide what to do with it. They have given a bit of money, and now it will be up to local authorities. The Minister even quoted other Tory lines about how there is no “magic money tree”, and I agree—there is not. So we need growth. We do not get growth by wishing on a star, taxing jobs by increasing employer’s national insurance contributions, or tying ourselves in knots with red lines over Europe rather than meaningfully re-engaging with the EU customs union. That is the way to grow the economy; that is the way we pay for these things. The Government cannot talk about growth, do nothing about it, and say to local authorities, “We have given you almost a billion pounds, and you can now go and sort out buses,” because local authorities do not have the finances. I am straying from the Bill. I have thus far referenced the omissions from the Bill, such as money. By inserting subsections (5) and (6), the House of Lords sought to focus attention on the Government’s commissions—namely, the end of the £2 fare cap, and the disastrous effect of hiking employer’s NI costs on the provision of special educational needs and disabilities bus transport. The Government’s decision to table an amendment removing those subsections is plainly a mistake, one that threatens to undo the constructive and necessary work undertaken in the Lords. The provisions were added to ensure that Ministers are held accountable for the consequences of their decisions—specifically, the rise in national insurance contributions and the short-sighted decision to increase the cap on bus fares. As the National Audit Office made clear in its report published last Friday, bus services are lifelines, not luxuries. They are essential for the young, for older people, for households without a car, and for those on the lowest incomes. The Government’s decision to scrap the £2 fare cap is not just wrong, but an outrage. It is a direct hit to the most vulnerable. The NAO report revealed that the lowest-income households—those in the bottom 20%—take more bus journeys on average than any other income group, at 42 journeys per household per year. Those are essential journeys to work, school, the shops or the doctor. Removing the fare cap would mean those people—the poorest in our society—paying more to do the basics of daily life. Subsection (5) rightly sought to introduce a review to assess the impact of increasing the fare cap on people’s ability to access socially necessary routes. Scrapping the review removes transparency, accountability and the Government’s responsibility to understand how their decisions impact real lives. The same principle applies to subsection (6), which calls for an assessment of the impact of changes to national insurance on SEND transport. Transport for children and young people with special educational needs and disabilities is not a side issue; it is central to an inclusive, accessible education system. Without that form of transport, many children cannot get to school. Increasing employer’s NI contributions risks undermining the viability of the services, as the hon. Member for Broadland and Fakenham made clear last week. The operators who run them are under increasing financial pressure. Without proper assessment and oversight, we risk sleepwalking into a situation where routes are cut, service levels fall, and SEND pupils are left without reliable transport. That would be an unforgivable failure of not just policy, but basic fairness. Including a requirement to review the impact does not bind the Government’s hands; it simply asks them to look at the evidence, consider the consequences of their actions, and take responsible steps to mitigate harm where needed. We must protect these services for their users and uphold the principle that no one should be left behind due to financial pressures beyond their control. I urge the Government to reconsider and not shy away from scrutiny. They should own their decisions and be prepared to measure their impact. That is what responsible government demands.

It is a pleasure to make my first speech in Committee with you in the Chair, Dame Siobhain, particularly on a matter as important to the residents of towns and villages in Cannock Chase, which I represent, as socially necessary local services. When I first read the Bill, clause 14 was one of the measures that I was most delighted to see, along with the extension of the option of franchising to non-mayoral areas, such as mine in Staffordshire, and the scrapping of the ideological ban on council-owned bus companies, which could be an important part of the picture when restoring routes in areas like mine. I apologise to the Committee for not being able to attend its first sitting, when rural bus services were discussed. The reality for many rural communities including some of my villages, which face reductions in services or being completely cut off, is that they mourn the loss of bus routes because they are now unable to take the bus to access vital facilities and services. Residents of the village of Slitting Mill, just outside Rugeley, have no bus service at all. When I go door-knocking there, I always hear from residents about the opportunities and freedoms that they have lost as a result. One resident told me, almost wistfully, as if she were speaking of a bygone age, of when she used to be able to catch a direct bus from her little village to the centre of Wolverhampton, where she worked. She told me that she does not blame young people for moving out of the village because of that lack of connectivity, or for not returning if they want to start a family. If someone in Slitting Mill does not have a car, their prospects for employment and training are very limited. In my home village of Norton Canes, residents in the most deprived part of our community, on and around the Norton East Road, have been cut off for many years because the No. 3 bus skirts around the bottom of the road, and the No. 60 around the top. Although the walk of 10-ish minutes is no bother for residents without mobility issues, many of the residents who made best use of the services that went down Norton East Road are older. Many have told me that they do not even bother to catch the bus now. That is just one example of how shrinking services are exacerbating the decline of ridership. Many residents use the bus to get to their GP appointments, and to scans, tests and secondary care services at Cannock Chase hospital. I am sure that, like me, other hon. Members have heard from constituents who often have to spend huge chunks of their income on taxis—accessible taxis are like hen’s teeth in my neck of the woods—or have to rely on relatives to drive them. Such relatives are hard to come by during working hours, but that is when most health services are open. Had clause 14 been in place when the withdrawal of services from Norton East Road was proposed, we would have had some back-up in opposing that on the grounds of its impact. I am sure that we have all heard accounts of children and young people not being able to get to school or enjoy social time with their friends because of a lack of bus services, especially in rural and suburban areas. That restricts the horizons of the next generation. Such matters should be, but often are not, taken into account when proposals are made or services are slated for withdrawal. Those three examples from my constituency show what the Bill means to communities such as mine, which have been let down by the broken bus system for far too long. Buses should work for people and communities, first and foremost. Clause 14 puts that aspiration at the heart of the Bill; I hope it will stand part.

It is a pleasure to see you in the Chair, Dame Siobhain. I thank hon. Members for their further comments on socially necessary local services. My hon. Friend the Member for Middlesbrough South and East Cleveland spoke at the last sitting about devolution and local decision making. Of course I support the principle of good decision making at the local level, and that is what the Bill is seeking to achieve by empowering local leaders. The hon. Member for Broadland and Fakenham asked how local transport authorities’ decisions on socially necessary local services could be challenged. My Department included clause 14 to deliver greater protection for socially necessary local services and transparency for passengers. Members of the Committee have remarked that the definition given in the clause provides scope to reflect local passenger needs and the specific circumstances of different local areas. It will be for an enhanced partnership to make decisions based on those needs. Mandating an arbitrary level of service takes power away from communities and local leaders and could harm the overall long-term financial sustainability of local bus services. Local transport authorities will need to vary their enhanced partnership plans and schemes to include a list of socially necessary local services. They must comply with the requirements of their EP schemes to avoid the risk of legal action, such as a judicial review, for not properly implementing the measure. If someone did wish to challenge a decision taken by a local authority, judicial review would be the most appropriate route. Guidance will be published in due course as part of the Government’s enhanced partnership review. The hon. Member for Broadland and Fakenham asked specifically about proposed new subsection (9A), inserted by the Bill into section 138C of the Transport Act 2000. This is necessary, as it requires an enhanced partnership to set out a process that would be followed if an operator proposed to cancel a socially necessary bus service, or vary one in a way that was likely to have a material adverse effect on the ability of passengers to access the goods, services, opportunities or activities mentioned in the clause. The hon. Member mentioned the £2 fare cap. The previous Government funded this fare cap until the end of 2024, with some fares likely to revert to more than £10 on the most expensive routes unless a new scheme was introduced to replace it.

Will the Minister give way?

I will make some progress, but I can probably paraphrase what the hon. Member was going to say: “It was in the manifesto.” Well, you must excuse me, Dame Siobhain, if I do not take the word of the Conservative manifesto; we heard numerous uncosted spending promises from the previous Government, and now that has all seen the light of day, we can see it was not worth the paper it was written on. The monitoring and evaluation report for the first 10 months of the £2 national fare cap was published in February 2025, and, as I have mentioned already, it was considered to offer low value for money. Maintaining the cap at £2 for the entirety of 2025 would have cost an estimated £444 million, so the £3 bus fare cap represents a £293 million saving. At the spending review, the Government announced an extension of the £3 bus fare cap until March 2027. The ability of local authorities to influence bus fares is tied to the bus operating model that they choose; in areas with enhanced partnerships, fares are set by the bus operators. Regarding school services, the Government do not expect the recent national insurance increase to have a significant impact on home-to-school travel.

It is extraordinary to hear the Minister say that, given the entire sector is shouting from the rooftops that it will be an existential crisis for the provision of SEND travel. I simply do not understand what data the Minister or his officials are relying on to support his bold statement that it will not have an impact. If he is going against the reasoned objections of the sector as a whole, he needs to come forward with the data that he is relying on.

I would simply say that it is expected that the private sector organisations that contract with local authorities will take the impact of national insurance changes into account, along with other changes in their cost base, in the usual way through contract negotiations. Question put, That the amendment be made.

8|0|10|4|The Committee divided:|Question accordingly agreed to.||0|0

Clause 15

Measures specified in schemes

09:45:00

Question proposed, That the clause stand part of the Bill.

With this it will be convenient to discuss the following: Clauses 16 and 17 stand part. New clause 37—Variation of enhanced partnership schemes to improve integration of public transport— “In section 138K of the Transport Act 2000 (variation), at the end of subsection (5) insert ‘or— “(c) improve integration across modes of public transport.”’” This new clause would mean that an enhanced partnership scheme could not be varied unless it would improve integration across different modes of public transport. New clause 50—Consultation of trade unions— “(1) The Transport Act 2000 is amended as follows. (2) In Section 138F, at the end of subsection 6 (f) insert— ‘(fa) representatives of relevant trade unions,’”.

I will start by addressing clauses 15 to 17. Clause 15 will broaden the scope and increase the flexibility of measures that may be included in an enhanced partnership scheme, by amending the Transport Act 2000 to replace references to specific routes with broader wording that covers local services in their entirety, thereby expanding the scope from measures that apply to individual routes to those that can apply across all local services in an enhanced partnership area. It means that local transport authorities and bus operators will be able to include in an enhanced partnership scheme measures that are more general in nature, rather than being limited by route. For instance, an enhanced partnership scheme will be able to introduce consistent fares and consistent reliability or punctuality targets across the entire area. Clause 16 was developed in response to concerns from local transport authorities about their ability to require financial reinvestment in local services under the current statutory arrangements for an enhanced partnership. It will provide local transport authorities with a power to specify requirements in enhanced partnership schemes to create financial reinvestment schemes, which may require operators to reinvest any additional profit received as a result of interventions from local transport authorities, the Government or others. The measure is intended to help to increase the level of operator commitment to the schemes and encourage operators to reinvest in the bus market. It will also help to ensure a greater return on central Government investment through the reinvestment of some operational savings back into the local bus market. Following the enhanced partnership review, which is currently under way, the Department will update guidance to assist local transport authorities and operators in understanding how the power can be used. Most enhanced partnerships have developed a bespoke variation process through which they can make changes to a scheme, rather than relying on the variation process in the 2000 Act. However, there may be circumstances in which the bespoke mechanism does not work for everyone. Clause 17 provides that, in very limited circumstances, local transport authorities can make changes to their scheme by using the statutory variation provisions instead of the bespoke variation mechanism in the enhanced partnership scheme. The purpose of the measure is to allow the local transport authority to make an application to the Secretary of State if an operator is acting unreasonably and has objected to a proposed variation that would have been made under an existing bespoke variation mechanism in an EP scheme. If, on application by the local transport authority, the Secretary of State is satisfied that the variation cannot be made because of the unreasonable or obstructive behaviour of one or more operators, or that the variation would benefit the people using the services, the Secretary of State can direct the local transport authority to follow the statutory variation process instead. Additionally, the clause provides that a variation may be made using the statutory process if it is one that the local transport authority is required to make in relation to socially necessary local services. The measure is designed to provide some protection to local transport authorities to deal with deadlocks in partnership negotiations and to enable changes to local services that are in the best interest of the people who use them. New clause 37, which was tabled by the hon. Members for North Norfolk and for Wimbledon, would broaden the reasons for varying enhanced partnership schemes under Section 138K of the Transport Act 2000. However, existing legislation allows for enhanced partnership schemes to be varied if that brings benefits to the people who use local services in the whole or any part of the area to which the scheme relates. The legislation thereby already covers the improved integration of different modes of transport, as this will have benefits for the people who use local services. Under the 2000 Act there is also an existing duty on local transport authorities to develop and implement policies that promote and encourage safe, integrated, efficient and economic transport in their area. As the Committee may be aware, the Government are developing an integrated national transport strategy to set a long-term vision for transport, which will help to inform how transport is designed, built and operated, with passengers right at the centre. I hope that the reasons I have outlined, alongside the existing duties of local transport authorities, have convinced the hon. Members that the new clause is not necessary. On that basis, I ask that it be withdrawn. I appreciate why my hon. Friend the Member for Liverpool Riverside (Kim Johnson) tabled new clause 50, and the potential benefits of union representation and input when an enhanced partnership scheme or plan is introduced. I direct my hon. Friend to section 138F of the 2000 Act, which the new clause would amend: subsection (6)(h) states that the authority or authorities must consult “such other persons as the authority or authorities think fit.” It can therefore be considered that trade unions already come under the interpretation if an authority feels that would make sense. I appreciate that this would be down to the interpretation of each authority, but my Department believes that the decision on who to include, beyond the required stakeholders originally set out, should lie with the enhanced partnership itself. My hon. Friend may be aware that the Department for Transport will update the enhanced partnership guidance later in the year. In the updated guidance the Department will make recommendations for best practice and will recommend that unions are considered as consultees where a plan or scheme is introduced or updated. It will also be recommended that unions are also considered as attendees for EP forums if appropriate. I therefore do not consider the new clause to be necessary and ask that it be withdrawn. I thank Committee members for their further comments on the partnerships. Clauses 15, 16 and 17 were introduced in the other place as Government new clauses to strengthen enhanced partnership provisions in order to widen the measures that can be taken by local transport authorities under an enhanced partnership scheme, to require bus operators to provide benefits to bus passengers on measures that will reduce operating costs, and to ensure that variation or revocation will benefit service users. As I have said, clause 15 broadens the scope and increases the flexibility of EPs and broadens the wording to cover local services in their entirety. This is important to passengers because routes will not be viewed in isolation and local transport authorities will not be limited by route. That can help with the consistency and reliability of services. The Government have listened to concerns from local transport authorities, and clause 16 provides them with a power to specify requirements in enhanced partnership schemes to create financial reinvestment schemes, which may require operators to reinvest any additional profit as a result of interventions. This is important because it encourages a commitment from operators to reinvest into the bus market, which I know has been a concern. I reiterate that the Department will use analysis from the previously mentioned EP review to update guidance to assist local transport authorities and operators in respect of how the power can be used. Clause 17 was introduced because it was found that there were times when a bespoke variation mechanism was not working for everyone. The clause provides local transport authorities with very limited circumstances in which they can utilise the statutory variation provisions, instead of the bespoke variation, to make changes to the scheme. With that, I commend the clauses to the Committee.

Committee members will be pleased to hear that I will whip through the clauses quite quickly. Clause 15 amends the Transport Act 2000 to widen the measures that can be taken by a local transport authority under an enhanced partnership scheme so that they can relate to any local services in the area concerned. That is very sensible; we need not trouble the Committee any longer with consideration of that clause. Clause 16, which deals with the passenger benefit requirement, replaces section 138C(9) of the 2000 Act. It sets out requirements in respect of local services to allow an enhanced partnership scheme to require bus operators to provide benefits to bus passengers in return for public expenditure on facilities or measures that will reduce operating costs. It is a simple and practical balancing act between the commercial operations that pay for themselves and the socially necessary additions that a local transport authority may wish to negotiate as part of the enhanced partnership. It is about the quid pro quo of how those can be funded other than by direct subsidy. Clause 16(9)(a) provides that local transport authorities may include requirements that relate to operators establishing and operating arrangements that facilitate an EP scheme, and subsection (9)(b) may require bus operators to provide benefits to bus passengers if they benefit from action taken by the LTA or other public authorities, including the Secretary of State. Again, this is a sensible adoption of a quid pro quo process rather than having route extension with direct subsidy. For the Conservatives, the provisions seem to sensibly widen the options for trade-offs, and we are supportive of them. Clause 17 inserts into the 2000 Act proposed new section 138(KA), so that where an EP scheme can be varied in accordance with the scheme, a variation can be made under section 138(K) only when the Secretary of State is satisfied of two things: first, that operators have behaved unreasonably or obstructively, and secondly, that the variation or revocation will benefit the users of local services. Again, this is a sensible approach for the Secretary of State to take and we will not object to clause 17. The Liberal Democrats’ new clause 37 would deal with the variation of EP schemes to improve the integration of public transport. It would mean that a variation to an EP could take place only if it had the effect of improving integration across different modes of transport. Although I understand and applaud the rationale behind the drafting of the new clause, one has to be careful of the unintended consequences, because it would prohibit any change to an EP that did not also improve integration across different modes of transport. Many variations to an enhanced partnership might have multiple benefits for passengers, but might not have the benefit of improving integration across different modes of transport. Under a strict reading of the new clause, such improvements would be prohibited. I know that is not the Liberal Democrats’ intention, but as the new clause is worded that would unfortunately be the effect. I will not make any comments on new clause 50, other than that, unusually, I support the words of the Minister in that the trade unions already come under the wording of the Bill.

New clause 37 is sensible and constructive. It would ensure that when enhanced partnership schemes are amended, improved integration across modes of public transport is explicitly recognised as a legitimate and desirable reason for doing so. We have seen time and again, both here in the UK and internationally, that when public transport is properly integrated, it works. It becomes more convenient, reliable and attractive to passengers. People choose to use it and when that happens, buses flourish. Whether it is better co-ordination between bus and rail timetables, joined-up ticketing or clear and consistent information across modes, the benefits of integration are obvious. Without a clear statutory basis for prioritising integration, too often such opportunities are missed.

10:00:00

By including the goal of integration as a specific ground for amending enhanced partnerships, new clause 37 would help to encourage the development of genuinely joined-up public transport networks that serve communities better and grow ridership in the long term. As I am sure the hon. Member for Broadland and Fakenham concedes, it is not our intent to limit the reasons why the new clause might be applicable. I note his comments, but that is not our intention, nor my reading of the new clause. The hon. Gentleman is being too strict on it, but we might come to that if the Government were to accept our new clause. Let us cross that bridge when we come to it.

I do not want to go over the arguments made by my hon. Friend the Member for North Norfolk when he discussed new clause 36; I want to simply say how new clause 37 differs. New clause 37 would add a third reason for variation to improve integration across modes of public transport. My hon. Friend spoke about the frustration that a lack of transport integration leads to, and how it can so often feel devoid of joined-up thinking. The new clause seeks to allow the franchising scheme to consider the importance of this idea, but we also want to ensure that the importance of integrated transport is recognised for those who live in areas functioning under the enhanced partnership scheme.

As the Transport Act 2000 currently stands, and as it would stand after the passage of the Bill, it does not and will not encourage integrated transport under enhanced partnerships. Our new clause would make it easier for areas to alter their schemes or improve access to transport integration, and ensure that improved integrated transport alone is an adequate reason to seek to alter a scheme. I hope the Government will give the new clause due consideration.

For the reasons I have outlined, I have nothing further to add. Question put and agreed to. Clause 15 accordingly ordered to stand part of the Bill. Clauses 16 and 17 ordered to stand part of the Bill. Clause 18 Requirements enabling travel by persons with disabilities Question proposed, That the clause stand part of the Bill.

The clause amends various sections of the Transport Act 2000 to help authorities to better reflect the needs of disabled passengers in the design of enhanced partnership schemes and plans. It provides that an enhanced partnership scheme can specify requirements to enable disabled people to travel independently and in safety and reasonable comfort, including—but not limited to—requirements for the provision of a taxi guarantee scheme. The clause also requires local transport authorities to consider whether any of the requirements proposed to be included in a new enhanced partnership scheme, or when varying an existing one, will enable disabled people to be able to travel independently and in safety and reasonable comfort. It requires local transport authorities to consult disabled people or organisations that represent them before making an enhanced partnership scheme, to ensure that it is as informed as possible by an understanding of the priorities and needs of disabled people.

We are getting to some of the more interesting parts of the Bill now. The clause amends relevant sections of the Transport Act 2000 on enhanced partnerships and plans to help authorities better reflect the needs of disabled users of local bus services and the design of enhanced partnership schemes and plans. Subsection (2) inserts proposed new section 138CA into the Transport Act 2000, which provides that: “An enhanced partnership scheme may specify…requirements about enabling persons with disabilities to travel on local services”— and then we get the good phrase— “independently, and in safety and reasonable comfort”, including for taxi guarantee schemes. It also states: “Before making an enhanced partnership scheme, a local transport authority must consider whether the requirements proposed to be specified in the scheme will enable persons with disabilities to travel independently, and in safety and reasonable comfort, on local services”, and it includes definitions for the purpose of the clause. Subsection (3) pops proposed new paragraph (ba) into section 138F(6), on consultation. It includes disabled users or prospective users of local services, or organisations representing disabled users, among the list of people or entities that authorities must consult before making an enhanced partnership scheme—so, good progress there. Subsection (4) inserts proposed new subsections (9) and (10) into section 138K of the Transport Act. It states: “Before varying an enhanced partnership scheme, a local transport authority must consider whether the requirements proposed to be specified in the scheme as varied will enable persons with disabilities to travel independently, and in safety and reasonable comfort, on local services…to which the scheme as proposed to be varied relates.” It is important that the schemes are designed to be widely accessible, including to those with disabilities. Consultation with affected groups in the design of services, as anticipated by subsection (3), is the right approach, and the clause makes clear the importance of designing services with the needs of persons with disabilities in mind. I ask the Minister: what consultation with groups representing persons with disabilities was undertaken prior to the drafting of the Bill? Although I welcome the clause, did the consultation include reference to floating bus stops, as anticipated in clause 30? If so, did the Government take account of that input?

It is great to serve under your chairmanship this morning, Dame Siobhain. I want to follow up on what my hon. Friend the Member for Broadland and Fakenham said and ask a few additional questions, particularly about the provision in clause 18 for persons with disabilities. I obviously welcome the inclusion of this clause in the Bill—we clearly want to ensure that public transport is as accessible for all as possible—but I am slightly concerned that, in a way, it provides false hope. Subsection (2) states: “An enhanced partnership scheme may specify”, so it is a “may”, rather than a “must”. It is nice to have that consultation, but there is an opportunity for the local authority or whoever is providing the bus service not to do it. The clause allows for a consultation, but there are no guarantees that what disabled people want will happen. I am also slightly concerned about the taxi guarantee scheme. I do not know whether hon. Members have experienced the same thing as me, but my constituency of South West Devon is an interesting mix of urban and rural. It might be thought that large chunks of Plymouth are technically easily accessible, but the Access Plymouth minibus system does not even work across the city, let alone go into the rural parts of the constituency. Out in the South Hams and West Devon, which is a different local authority, the bus services are typical rural bus services: they are not very reliable or frequent. It is also worth saying that taxis are not reliable either. Just this weekend, a local taxi service that runs out of the village put a post on social media saying, “We’re fully booked this evening.” Even able-bodied people, let alone people with disabilities who are trying to benefit from a taxi guarantee scheme, need to book in advance, so I question the feasibility of delivering on this clause. We are not only saying that bus services will be reliable for persons with disability; we are offering them a taxi guarantee scheme. Yet we do not know—I assume the Minister will be able to explain this—what assessment has been made of the wider public transport picture or whether the taxis exist to provide the scheme, particularly in our rural communities. I know the Bill seeks to address those places. Ultimately, we need to ensure that we manage the expectations of those we are trying to help with the Bill. I ask the Minister, what consultation has been held on, and what thought has been given to, the provision of rural services for people with disabilities? The taxi guarantee scheme is a great idea, but is it deliverable? What analysis has been made of that? Secondly, what might stop a local authority from delivering on this, and what assessment has been made of potential obstacles? Apart from the supply of buses and taxis, are there other reasons why a local transport authority might not be able to deliver this? If it is that important to ensure that persons with disability can access public transport, which is something that I think we all agree we want, then the obvious question is: why does the legislation not say that an enhanced partnership scheme “must” do it? Why does the Bill say just that it “may”? It seems that there is a conflicting ambition here. Perhaps I have answered my own question in saying that there might not be the supply, but if we want to ensure a better world for persons with disability, I am intrigued as to why it does not say that a scheme must do this.

The clause, added during scrutiny in the Lords, is a welcome and valuable improvement to the Bill, but we would like to know what consultation was held with disabled groups before it was drafted. Although the changes it makes might seem modest on paper, they have the potential to make a significant difference in improving accessibility across our bus network. Subsection (2) allows enhanced partnership schemes to specify requirements to ensure that disabled people can travel independently, safely, and in reasonable comfort on local bus services. The inclusion to allow the specification of a taxi guarantee scheme is also welcome. Although we share some of the concerns of the hon. Member for South West Devon, such a scheme may prove to be vital in ensuring that disabled and other vulnerable users feel comfortable and confident in using the bus. Subsection (3) strengthens the consultation process and ensures that disabled users or organisations representing them are consulted before any EP scheme is made. That is not just good practice; it is essential if we are to build a transport system that works for everyone. Subsection (4) mirrors that requirement when enhanced partnership schemes are varied, and guarantees that the accessibility is not forgotten as schemes evolve. Authorities must once again consider whether changes enable disabled people to travel independently, safely, and in comfort. These are considered but welcome changes. Accessibility cannot be an afterthought; it must be embedded from the outset and considered at every stage of decision making. These welcome measures help to support that.

I thank hon. Members for their thoughts on the clause. I remind the Committee that the clause was inserted into the Bill because the Government listened intently to concerns in the Lords. The clause will help authorities better reflect the needs of disabled passengers in the design of enhanced partnership schemes and plans. It will enable the specification of requirements of disabled people to travel independently, safely and in reasonable comfort. That extends to when a local transport authority is varying an enhanced partnership scheme. It will help local transport authorities to understand better the impacts on disabled passengers, and fits into how the Government are reforming transport to make it more inclusive, placing the passenger at the heart of everything we do. The Government are determined to ensure that, as far as possible, local transport authorities take proper account of the needs of disabled people in using local bus services. The clause will support them in that. I have had many meetings with various groups, including disability groups, and I engage widely with the Disabled Persons Transport Advisory Committee—DPTAC—to help and guide us on the Bill. As I said, the clause was a reaction, having listened to concerns in the Lords. Question put and agreed to. Clause 18 accordingly ordered to stand part of the Bill. Clause 19 Objections by operators Question proposed, That the clause stand part of the Bill.

10:15:00

Clause 19 will introduce a change to the 28-day operator objection mechanism in relation to EP plans and schemes. Under the Transport Act, local transport authorities are required to provide notice and comply with consultation requirements when they create, vary or revoke an EP plan or scheme. Those arrangements allow an operator of a qualifying local service to object to any proposal to create, vary or revoke an EP scheme at several key stages in the process. The creation, variation or revocation of an EP scheme cannot proceed if a sufficient number of operators object. Where a sufficient number of operators object, the local transport authority has an opportunity to revise its proposals for reconsideration, and then operators have another opportunity to object. The mechanism for operators to object is critical to enabling bus operators to have a reasonable say about the content and viability of an individual EP plan or scheme. However, in some cases, local transport authorities have been working with operators in advance of issuing notices, so they have an opportunity to work through any potential objections. The current legislation means that local transport authorities are required to wait up to a month for the objection period to lapse in such circumstances.

This clause is sensible. The Minister is right that it will streamline the objection process, so that instead of having to wait for a month to see whether anyone has objected, the affected parties will be able to notify the local transport authority in writing that they have no intention of objecting. The timetable will be shortened as a result. The approach is multi-layered. The measure relates to the preparation, notice and consultation stage, which is section 138F of the Transport Act; the making of plans and schemes, section 138G; the preparation, notice and consultation for variations, section 138L; and the making of variations, section 138M. This is a common-sense approach to preventing unrequired notice periods from delaying the ability of LTAs to take action. Clause 19(6)(a) will have the effect that where an LTA issues a notice of an intention to revoke an enhanced partnership plan or scheme, it is no longer required to state the date on which the revocation takes effect under the notice. That will allow the LTA to proceed with the revocation where the relevant operators have also indicated that they do not intend to object under the new arrangements. Again, that is sensible streamlining. I applaud the Government on a good tidying-up exercise. Question put and agreed to. Clause 19 accordingly ordered to stand part of the Bill. Clause 20 Advance notice of requirement to provide information Question proposed, That the clause stand part of the Bill.

The clause will amend provisions in the Transport Act relating to powers of local transport authorities to obtain information about local bus services in connection with any relevant function, including preparing or varying an EP scheme or plan. Existing powers are set out under section 143B of the Act. They mean that operators may be required to provide information requested by local transport authorities within a “reasonable” timeframe specified by the local transport authority and in a specified format. If it appears to a local transport authority that a bus operator has failed to take all reasonable steps to provide the information, it must inform the traffic commissioner. There have been occasions when operators have not met the timeframes set by local transport authorities. To support the Government’s intention to strengthen EPs between local transport authorities and bus operators, the clause will amend section 143B to require LTAs to provide a 14 day-notice period before issuing an official request for information under that section. It clarifies that “When imposing the requirement the authority or authorities must have regard to any representations made by the operator in response to the notice”. The clause creates a mechanism through which operators can work with local transport authorities before a statutory request for information is issued under section 143B.

I will be brief. I agree with the explanation given by the Minister. This is a sensible clarification and we have no objections. Question put and agreed to. Clause 20 accordingly ordered to stand part of the Bill. Clause 21 Bus network accessibility plans Question proposed, That the clause stand part of the Bill.

With this it will be convenient to discuss new clause 23—Reporting on accessibility of bus services— “(1) Each relevant authority must prepare and publish an annual report assessing the accessibility of bus services within its geographical boundaries. (2) In this section, ‘relevant authority’ includes— (a) a county council in England; (b) a district council in England; (c) a combined authority established under section 103 of the Local Democracy, Economic Development and Construction Act 2009; (d) a combined county authority established under section 9(1) of the Levelling-up and Regeneration Act 2023; (e) an integrated transport authority for an integrated transport area in England. (3) When publishing a report under this section, the relevant authority must include a statement indicating whether, in its view, accessibility standards within its geographical boundaries are satisfactory or unsatisfactory. (4) The report must also include— (a) an assessment of areas with inadequate accessibility provisions, identifying specific locations and the reasons for accessibility shortcomings; (b) proposals to improve bus route accessibility, including measures to address shortcomings and timelines for implementation; (c) an evaluation of the effectiveness of previous accessibility improvements, including data on their impact on disabled passengers and other affected groups; (d) a review of any barriers preventing the full implementation of accessibility improvements, with recommendations for addressing these barriers including any additional funding or resources required; (e) evidence of consultation with relevant stakeholders, including organisations representing disabled people, transport providers, and local communities, for the purposes of ensuring that accessibility improvements meet the needs of all passengers. (5) An authority’s first report under subsection (1) must be published within 12 months of the day on which this Act is passed. (6) Relevant authorities must ensure reports under this section are made publicly accessible and that copies are submitted to the Secretary of State.” This new clause would require relevant authorities to publish annual reports on the accessibility standards of bus services in their geographical boundaries, including statements on whether those standards are satisfactory or unsatisfactory.

Clause 21 requires local transport authorities to publish a bus network accessibility plan, describing what provision is made in the authority’s area to enable disabled people to use local services. Those plans will also assess how effectively the provision enables disabled people to use local services “independently, and in safety and reasonable comfort” and describe any further action that the authority plans to take to enable disabled people to travel on local services. The clause specifies that the bus network accessibility plan must be published within one year of the clause coming into force, and subsequently it specifies that it must be reviewed at least every three years, or sooner if substantial changes are made to the local bus network. As it stands, there are no specific obligations for authorities to obtain an understanding of how well local transport networks in their area work for disabled people, or to highlight publicly their approach to network accessibility. The clause requires local transport authorities to consult disabled people or organisations representing them, as well as operators of local services within their area, when preparing and reviewing bus network accessibility plans. That will help to ensure that authorities review the accessibility of their bus network regularly, including setting out any changes they propose to make, and that disabled people or the organisations representing them will be given a voice when future accessibility interventions are planned. New clause 23 tabled by the hon. Members for Wimbledon, for North Norfolk and for South Devon (Caroline Voaden) would “require relevant authorities to publish annual reports on the accessibility standards of bus services in their geographical boundaries, including statements on whether those standards are satisfactory or unsatisfactory.” The Government are clear that we need to improve accessibility of our transport network, and I support the spirit of the new clause, which is designed to incentivise local authorities to take responsibility for driving up accessibility standards in their areas. However, clause 21 already places a requirement on local transport authorities to publish a bus network accessibility plan, which must include details of the accessibility provision that already exists in their area and an assessment of the extent to which the current provision enables disabled people to travel independently, in safety and reasonable comfort, and must set out future plans to improve accessibility. I therefore believe that the proposed measure is unnecessary and urge the hon. Member for Wimbledon not to press the new clause.

The Minister did a good job of précising the contents of the clause, so I will not repeat that—I know everybody will breathe a big sigh of relief. However, there are some issues; essentially, clause 21 requires a bus network accessibility plan to be created, but it does not then tell us what to do with it. My questions are around the theme of: “So what?” It is all very well to create a plan that just describes the status quo, but there is no requirement to improve. The current effect is to create cost and bureaucratic process with no outcome for passengers. This is a real problem with both this legislation and legislation more widely: we think process is very important—because we are policy people—so we focus on all the hoops that organisations need to jump through. Too often, however, we forget to take the next step and understand the practical impact of the process on our constituents, in particular those who use buses. There appears to be no positive benefit from the clause as drafted, other than having another document collecting dust on a shelf somewhere. What is the point of the requirement? It identifies need and describes what the LTA is planning to do about it, but that is it. It feels a bit like virtue signalling without funding, since improvements are expensive, particularly provisions for those with additional needs and disabilities, and do not add significantly to the fare box. What is the practical application of the clause? It applies a significant additional burden on local transport authorities, which have to jump through the hoops that we are creating, but what is the benefit? New clause 23 in the name of the Liberal Democrats is a different version of the same thing, but I look forward to the explanation and advocacy of it by the hon. Member for Wimbledon. The only difference is that the plan would be annual rather than triennial, which would triple the amount of bureaucracy and cost associated with the provision. The new clause would include proposals to improve bus route accessibility but, again, with no requirement actually to change anything. I know that is not the intention of the hon. Member, but both the clause and the new clause are entirely useless without funding attached. Since no reference to such funding appears anywhere in the Bill, that does beg the question, what is the point of the clause and the new clause?

In answer to the hon. Member for Broadland and Fakenham, our new clause 23 addresses the weaknesses in the existing clause 21. According to research by the National Centre for Accessible Transport, 90% of disabled bus users report facing barriers to using the bus network. Those include space constraints, poorly designed bus stops, the lack of step-free access when boarding or alighting, and the continuing absence of induction loops. Buses are not a luxury for many disabled people; they are a vital connection to work, services, friends and family. Putting accessibility front and centre is not optional; it is essential. The clause is therefore a step in the right direction. It rightly requires authorities to consider how to make bus services more accessible. However, if we are serious about delivering meaningful progress, we must go further. That is why we have tabled new clause 23, to build on the work started in clause 21 by introducing a requirement for annual reporting on accessibility progress. The existing clause requires the accessibility plan to be reviewed only every three years. We believe that is too long; three years is a long time in which to do nothing. I draw Members’ attention to subsection (4) of our new clause 23, which lists practical things that the report would have to report on to draw attention to the public, the Government and voters exactly where there are shortfalls in, problems with and obstacles to addressing the need. We need to go further than simply having the requirement. Under the Conservatives, the Access for All programme was left to wither and die on the vine. Unless we actually do something more practical, as we are suggesting, that is what will happen again. I agree that none, or not much, of the Bill will work without adequate funding—that is a given—but we have already made that point, and the new clause would give the oxygen of publicity to what is happening. We think that is important. We do not think that new clause 23 would impose a significant new burden. It would simply require local transport authorities to produce a short annual update, setting out how they are progressing against the goals in their accessibility plan, to allow for regular scrutiny, course correction where needed and, above all, accountability. If we want a bus system that works for everyone, we must ensure that local authorities do not just create plans, but deliver on them, transparently and consistently. For that reason, we support the clause standing part of the Bill, and we urge the Government to adopt new clause 23.

10:30:00

The driving force here is transparency. It is about having the data and about how local areas ensure, for a whole range of reasons—social, economic and moral—that everyone in their community can access our bus services. I remind Members that the clause 21 was inserted following debate in the other place. The Government believe that all passengers should be able to travel across the country easily, safely and with dignity. We listened carefully to concerns in the other place and brought forward an amendment to support the Government’s ambition for bus services to become more accessible and inclusive for passengers, and particularly for disabled people. I will address some of the points raised. First, I have already mentioned that clause 21 places consultation requirements on local transport authorities when developing bus network accessibility plans. It also specifies that these plans must be published within one year of the clause coming into force and reviewed following substantial changes to local bus services, or every three years. For example, if a local transport authority decides to adopt a franchising scheme, my Department would expect it to review the plan. The clause requires a local authority to describe what action it intends to take to enable persons with disabilities to travel on such services independently and in safety and reasonable comfort—not just to identify the issues. Bus network accessibility plans will enable local authorities to be held to account for appropriately understanding the accessibility of networks and for having a plan to resolve and mitigate those issues. New clause 23, tabled by the hon. Member for Wimbledon, would place requirements on a wider range of authorities, including those not responsible for bus services. It would be burdensome and duplicative, and likely to result in areas being captured in multiple reports. I confirm that my Department will provide guidance to help local transport authorities to produce proportionate and effective bus network accessibility plans for the benefit of the authority and disabled passengers alike. Question put and agreed to.  Clause 21 accordingly ordered to stand part of the Bill. Clause 22 Local government bus companies

I beg to move amendment 51, in clause 22, page 16, line 31, at end insert— “(4A) In relation to the award of a local service contract by one or more franchising authorities pursuant to a franchising scheme, any contract to be awarded pursuant to that franchising scheme shall not be an exempted contract under the Procurement Act 2023 unless awarded to a local government bus company that is an Exempted Local Government Bus Company and Schedule 2 to the Procurement Act 2023 shall be construed accordingly. (4B) An Exempted Local Government Bus Company is a local government bus company as defined by subsection (5) and which was in business providing local services on 17 December 2024. (4C) In section 3 of the Procurement Act 2023 (public contracts), after subsection (6) insert— ‘(7) Section 18 of the Bus Services (No. 2) Act 2025 restricts the circumstances in which local service contracts awarded to a local government bus company are to be regarded as exempted contracts.’” This amendment ensures that any contract awarded under a franchising scheme by one or more franchising authorities cannot be exempt from the Procurement Act 2023 unless it is awarded to a local government bus company that meets specific criteria - specifically one that was actively providing local services as of December 17 2024, and aligns with the provisions outlined in section 18(5) of the Act.

With this it will be convenient to discuss the following: Government amendment 17. Clause stand part. New clause 39—Assessment of service potential from publicly owned bus operators— “(1) Within six months of this Act receiving Royal Assent, the Secretary of State must conduct an assessment of the ability of publicly owned operators to deliver more cost efficient and reliable bus services than commercial operators. (2) Within a month of the Secretary of State concluding the assessment specified in subsection (1), a copy of the assessment must be laid before both Houses of Parliament.”

I will speak to amendment 51 in my name and set it in the context of clause 22. Subsection (1) repeals section 22 of the Bus Services Act 2017, which stated that the relevant authorities listed in that section could not “in exercise of any of its powers, form a company for the purpose of providing a local service” in England. Its repeal allows the wide-scale creation of municipal bus companies. That was in the Labour party manifesto, from memory, so I understand why the Government are doing that, and there was also reference in the King’s Speech to encouraging the expansion of the municipal bus company sector. There are currently eight such companies in England and Wales. It is clearly the Labour party’s ideological position—we should be clear about it—that the state is better placed to run the commercial operations of bus companies than the private sector. That is not about provision, routes, capacity or approach to additional needs; it is the nuts and bolts of how to run a commercial operation—purchasing or leasing, maintaining, training and operating a bus company. Why would a local authority be better at the things that I have just mentioned than a specialist business, the main operation of which is exactly that? It is a truism that local authorities are not traditionally renowned for their efficiency, and the same could be said of national Government. It is not impossible for them to do a good job—in previous sittings, I have made positive reference to one or two of the existing municipal bus companies that do—and I will not be ideological in the opposite direction, but running commercial operations of this kind is not a natural strength of local authorities. Cost management, customer relations and maintenance and renewal are all natural strengths of the private sector. From my perspective, therefore, this policy change is a very odd decision. Clause 22 exposes the political approach of Labour, which is more interested in creating the supplier than supporting the passenger. We have seen that theme in clause after clause throughout the Bill. Subsections (2) to (5) create new requirements that mirror existing subsections (1), (2) and (13) of section 74 of the Transport Act 1985, which disqualify directors of existing public transport companies from being members of the local authority that owns the company. The new requirements will ensure that directors of the new local authority-owned bus companies formed after the repeal of section 22 of the 2017 Act, which I have already referred to, are subject to the same governance requirements. If we are going to do this, that is a sensible safeguard. Subsection (2) provides that a director of a local government bus company who is paid to act in that capacity or is an employee of the company or of a subsidiary is disqualified from being elected or being a member of a relevant authority that controls the company, so there is a degree of separation. Subsection (6)(b)(ii) disapplies section 73(3)(b) of the 1985 Act, which relates to money borrowed for the purpose of or in connection with a public transport company’s provision of local services. That removes the restriction on existing LABCos in England accessing private borrowing where the money is borrowed for the purpose of or in connection with providing local bus services. I can see why private businesses that have good control of their costs would do that, but allowing additional public sector borrowing by municipal bus companies as well as the very significant commercial risks associated with franchising is another concerning element of the clause. This is franchising with knobs on. Not only is the local transport authority taking direct commercial responsibility for the provision of services, which has not happened before, it is then, instead of contracting out those services for a fee—which is what franchising is in the majority of cases—going the extra step and being the other side of the charterparty in operating the company to which it is franchising. That is a doubling up of the commercial risk and bets taken by local authorities, and on top of that, they are being allowed to raise debt as part of the operating company. I fear that there may be some trouble ahead as a result of this approach. What control will be applied to that debt? Who is responsible for the debt on the failure of a LABCo? That is an important question. Does the debt fall with the LABCo or revert to the local authority as the only shareholder? Will it come back to the local transport authority as the ultimate owner? What provisions are in place to protect the public purse? My concern is that this bit has not been properly thought through. LABCos have an obvious potential conflict of interest. They are owned by the local transport authority, which is the contracting body for the bus services that they supply. Whether true or not, there is a risk of an impression of impropriety if there is not a proper arm’s length approach, so we have to go the extra mile. If we as a Committee decide to support this clause, it is incumbent on us, where we recognise that people will likely think that there is an overly close relationship, to put the safeguards in place now to prevent any indication that that might be the case. The local authority, as an emanation of the state, should bend over backwards to ensure fair play in the tender process and to ensure that that process is obviously fair—that justice is not just being done, but being seen to be done. It is equally obvious that any contract award process from the local transport authority to a LABCo must be fair. Coming on to amendment 51, the Procurement Act 2023 sets out a fair process to ensure that no underhand tender activities are being undertaken by a local authority—that is its rationale. Yet although clause 22 takes steps to ensure that directors are at arm’s length from local transport authorities, and cannot be elected members either, it currently does not prevent an exclusion under the Procurement Act for the award of contracts to new—as opposed to existing—LABCo operators. That is a clear lacuna and mistake in the drafting of the clause. The clause is trying to take account of the transitional processes where there is an existing LABCo—there are eight that we have discussed previously. As it is currently worded, however, it does not prevent local transport authorities from setting up new municipal bus companies. In fact, Labour is encouraging them to do that—or going further than that, as the King’s Speech expressed the desire that there should be many more. Despite that, the clause allows the exclusion of the provisions in the Procurement Act. That cannot be the Government’s intention, or if it is, the Minister needs to tell the Committee that that is the case. That is my first question: is it the Government’s intention to allow the exclusion of the provisions of the Procurement Act in such circumstances—yes or no? If it is, why should those provisions be excluded? Amendment 51 in my name would fix that oversight. It would ensure that any contract awarded after a franchising scheme by a franchising authority cannot be exempt from the Procurement Act 2023 unless it is awarded to a LABCo that meets the specific criteria that it was already providing services on 17 December 2024. In other words, we accept the transitional need for LABCos that have been operating over the last years, or that are currently operating, to be excluded. However, any new LABCo should be properly compliant with the Procurement Act 2023. That protects the ability to roll over a transitional contract where the previous provider was a legacy LABCo, and stops the creation of a new loophole that would allow a local transport authority to misuse roll-over clauses to bypass the proper tender process and award to its own bus company. It cannot be the Government’s intention to allow such an abuse of tendering, so if they will not adopt my amendment, what other effective steps will they take? How will they stand up for fair competition, the taxpayer and the passenger—or is their focus, again, on the supplier?

In my time as a Minister, I have visited a number of municipal bus companies and they have all been absolutely outstanding. That is not just my view; look at the awards they have received in competition with private providers. They are deeply embedded in the local community, and indeed they are seen with some civic pride by the people who effectively own the company—the people of the local area. This is far from being an ideological move by the Labour party; we are removing the ideological ban. We are enabling local areas with the tools that they need to deliver better bus services, whether those services are municipal, through franchising or through enhanced partnership schemes. There is no one-size-fits-all approach.

10:45:00

Clause 22 repeals the ban on the creation of new local authority bus companies, formerly referred to as “municipals”, in the Bus Services Act 2017. The clause also clarifies that there are no geographical restrictions on local authority bus company operations, removes restrictions on existing local authority bus companies accessing private financing, and will ensure that new and existing local authority bus companies are subject to some of the same governance requirements.

It will be for local authorities to determine whether they should set up local authority bus companies; it will not be a requirement. If a local transport authority does decide to set up a local authority bus company, it can establish that company as part of either a franchised network or a network managed by an enhanced partnership. Any such decision should be underpinned by a rigorous and prudential approach to financing and resource requirements. All local authorities have a duty to manage public money well. Local authorities cannot take on any borrowing unless it is affordable. That is a statutory requirement, and any local authority-owned bus company should be self-financing, as a minimum. Repealing the ban on establishing new local authority bus companies is the least that we can do.

I will now move on to the amendments.

I asked the Minister a couple of specific questions about debt management, so I would be grateful if he would answer them before moving on. He will, of course, remember that I asked about the provision of debt, the ability of a LABCo to raise debt, and what happens to that debt if the LABCo should fail. Does it return to the local transport authority, as the ultimate owner? Have the Government thought this through?

As I said, any decisions should be underpinned by a rigorous and prudential approach to financing and resources. All local authorities have a duty to manage public money well. Local authorities cannot take on any borrowing unless it is affordable. That is a statutory requirement, and any local authority-owned bus company should be self-financing, as a minimum. Repealing the ban on establishing new local authority bus companies will give local leaders the freedom and flexibility to scale a bus company to match the needs of their passengers, the aims and ambitions they have for the network, and the available funding.

The Minister was looking at his officials. I do not want to put him on the spot—obviously, I do, but not really—if this is a question to which he does not immediately know the answer. If he will write to me, through his officials, with that answer, or clarify it later in the sitting, I would be grateful.

I will absolutely ensure that the hon. Member receives a full response and gets the reassurances that he seeks. Amendment 51, moved by the hon. Member, seeks to prevent new LABCos from being able to directly award franchising contracts under what is known as the Teckal exemption in the Procurement Act 2023. Clause 22 will help to support public ownership, where desired, by repealing the ban on establishing new LABCos. Local authorities can consider a range of options for structuring a new bus company. One such option could be the establishment of a new LABCo as a Teckal company. I understand hon. Members’ concerns about Teckal, and it is important to address them, but to do so we must understand what the exemption is and how it is likely to work in practice. Teckel is part of a much wider landscape of public procurement law, and it has been available to local authorities for the provision of services for some time. Use of the Teckal exemption is a complex undertaking that needs to be followed with care, given that it allows contracts outside the usual controls imposed by the public procurement regime. Specific and rigorous tests are required to use the Teckal exemption. In addition, the development of any franchising scheme, including for a Teckal LABCo, is subject to checks and balances, as set out in legislation. That includes a thorough assessment of the plan, independent assurance and public consultation. Local authorities must be careful to ensure that companies are within the Teckal parameters if they pursue this option. Any local authority looking at Teckal would need to consider very carefully whether it was appropriate for their local context. Existing precedent for Teckal LABCos in the UK, although limited, suggests that Teckal is largely used in scenarios where private operators are not interested in operating a service, or where they fail—for example, a Teckal award to an operator of last resort. Teckal is open to all public bodies that own any type of commercial company. Removing it as an option only for new LABCos would be an unusual departure from the status quo for existing procurement legislation. As it stands, there does not appear to be any compelling reason to single out new LABCos as the only type of public company that cannot use Teckal. My officials will publish guidance on LABCos once the Bill has come into force, and that will cover use of the Teckal exemption. We will work very closely with stakeholders when developing and drafting the guidance. That will help to ensure that the exemption is used only where the local transport authority believes it will genuinely improve bus services for local passengers in the area. I turn now to Government amendment 17, which makes changes to clause 22. It will remove Wales from the scope of subsection (6)(b)(i), which inserts new subsection (5)(c) into section 73 of the Transport Act 1985. The amendment has been tabled to ensure that the public transport companies in Cardiff and Newport are not captured by the clause. Subsection (6)(b)(i) clarifies that there are no geographical restrictions on the operations of existing local authority bus companies in England. The amendment ensures that the subsection will only apply in England. It has been agreed with the Welsh Government and is intended to ensure consistency with the Welsh Government’s policy objectives to promote bus franchising. Clause 22 repeals the ban on the creation of new local authority bus companies, formerly referred to as municipals. The clause also clarifies that there are no geographical restrictions, as I mentioned, and I already touched on it being a local decision. New clause 39, which was tabled by my hon. Friend the Member for Middlesbrough and Thornaby East (Andy McDonald), would require the Secretary of State, within six months of the Bill receiving Royal Assent, to conduct an assessment of the potential and efficacy of LABCo service provision compared to private sector operators. I feel it is necessary to reiterate a key point about many of the measures in the Bill: it gives local authorities the choice to decide how best to operate local bus services for their communities. It does not mandate that they establish a particular bus operating model. The number and type of LABCos set up will therefore depend on local decision making and the available resources in each context. Local authorities already set out their objectives in bus service improvement plans and wider local transport policies in local transport plans. For those considering establishing a LABCo, the enhanced partnership variance process or franchising scheme assessment provides a robust way to assess the evidence for choosing one operating model over another.

I am not persuaded by the Minister’s arguments, valiant though they were. I therefore intend to press the amendment to a vote. Question put, That the amendment be made.

9|0|2|10|The Committee divided:|Question accordingly negatived.||0|0

Amendment made: 17, in clause 22, page 17, line 20, after “company” insert

“to which subsection (5B) applies”—(Simon Lightwood.)

Clause 23

Grants

I beg to move amendment 56, in clause 23, page 18, line 42, at end insert— “154B Consideration of operator size in grant allocation (1) When exercising powers under section 154A, a local transport authority in England may have regard to the size of the operator when determining the amount of a grant and the conditions which may be attached to it. (2) In particular, local transport authorities may— (a) give priority to small operators for the purposes of ensuring the sustainability and diversity of local transport services, (b) adopt measures to protect small operators from disproportionate financial burdens or competition, and (c) take into account the financial and operational capacity of small operators to meet service demands. (3) When determining what constitutes a small operator, a local transport authority may consider— (a) the size of the operator’s fleet, (b) the number of employees employed by the operator, and (c) the operator’s annual turnover or other financial capacity.” This amendment would enable local transport authorities to prioritise small transport operators when allocating grants.

With this it will be convenient to discuss clause stand part.

We welcome the powers in clause 23, which enables local transport authorities to design and deliver grants directly to bus operators in their areas. It is a clear step in the right direction, placing real tools in the hands of local authorities, which know their communities best and are best placed to shape the services that their residents rely on. Amendment 56 builds on that principle. It would ensure that, when designing grant schemes, local authorities must consider the size of transport operators. Too often, smaller bus companies, many of them deeply embedded in the communities they serve, struggle to compete on an uneven playing field, especially when it comes to accessing capital for improvements or expansion. Our amendment recognises the vital role that those smaller operators play. By requiring authorities to take those smaller operators’ circumstances into account and, where appropriate, prioritise them in their grant making, we would help to protect local choice, preserve vital routes and foster healthy competition in the sector. In short, this is a modest but meaningful measure to ensure that smaller operators are not squeezed out, and that communities continue to benefit from diverse, responsive and locally rooted bus services. We therefore support amendment 56 and the clause standing part of the Bill.

The Government recognise the importance of small and medium-sized enterprises in driving economic growth. The hon. Members for Wimbledon, for North Norfolk and for South Devon clearly recognise that, too, given the amendment that they have tabled. This Bill aims to support our economic growth mission by giving local transport authorities greater freedom to decide how best to support their local networks. Amendment 56 is intended to ensure that local transport authorities that choose to use the new powers to design and pay grants to bus operators consider the needs of small operators when designing those grants. The amendment is not needed, however. Clause 23 would do nothing to restrict local transport authorities from choosing to provide greater support to local small bus operators when designing their own grants, provided that those grants comply with competition and subsidy rules. Local transport authorities are already well placed to understand the needs of their small operators, because most are already part of enhanced partnership arrangements with operators in their areas. It will be for local transport authorities to decide the best way to support their local bus networks as a whole. Finally, local transport authorities, as public authorities disbursing funding, will need to be mindful of the fact that any grants that they design using the powers under the Bill must comply with any relevant legal requirements, such as subsidy controls that ensure they are not distorting the local or national market. I therefore ask that the hon. Member for Wimbledon withdraw the amendment.

11:00:00

We remain of the view that without the amendment, the proposals will not give small bus companies the benefits that we are seeking to achieve. We are not convinced that that can be done without the explicit mention of small bus companies, as provided by the amendment.

Does the Member want to withdraw the amendment or press it to a vote?

I will press it to a vote. Question put, That the amendment be made.

10|0|3|10|The Committee divided:|Question accordingly negatived.||0|0

Clause 24

Information provided on registration of local services

I beg to move amendment 18, in clause 24, page 20, line 41, after “1985” insert “, in connection with a local service which has one or more stopping places in England,”. This amendment limits clause [24](4) to local services which have one or more stopping places in England.

With this it will be convenient to discuss the following: Government amendment 19. Clause stand part. Amendment 28, in clause 25, page 21, line 24, after “equipment,” insert “including accessibility and the provision of wheelchair spaces,”. This amendment would add accessibility information to the list of information which is to be provided to users of local bus services. Clauses 25 and 26 stand part.

Government amendments 18 and 19 will have the effect of removing services operating in Wales from the scope of clause 24(4). Amendment 18 will mean that only services that have stopping places in England will be captured. Amendment 19 will mean that, in relation to a cross-border bus service, no information will be captured about any part of that service operating outside England. The changes are necessary because bus registration is a devolved matter. Clause 24 will give the Secretary of State new powers in respect of the provision of information on the registration, variation and cancellation of bus services from operators and local transport authorities. It will enable information about local bus services to flow to, and be shared between, the traffic commissioner and the Secretary of State. The traffic commissioner will retain overall responsibility for registering local bus services and the Secretary of State will host and administer the new database, which will bring all the information streams together. Useful information will be available online, including on who operates the route, where services go and any changes or cancellations to services. By bringing that all online, we will modernise the information provision and make it more transparent for passengers. The technical detail will be set out in regulations made under the new powers in the Bill. I thank the hon. Member for Brighton Pavilion for tabling amendment 28, which would add “accessibility and the provision of wheelchair spaces” as a specific category of data that the Secretary of State may require from bus operators. I agree that open, transparent information about the accessibility specifications of buses should be available to the public, which is why I am pleased to confirm that we were already intending to use the powers in the clause to request the very same information. Clause 25 works with clause 24 to enhance oversight, promote data-driven decision making and ensure greater transparency of local bus services. It paves the way to require franchising authorities, which do not have to register services with the traffic commissioners, to provide data about their services to the Secretary of State in order to enable the functioning of the aforementioned database. The clause also adds new categories of data that the Secretary of State may collect about local services and the vehicles used to operate them, and will assist with the monitoring and performance of local services and operators. Clause 26 works in tandem with clauses 24 and 25 to support greater public transparency and thus accountability over local bus services. It will enable the Department to publish historical data down to the operator level by removing some of the existing restrictions on doing so. That will provide passengers with a baseline from which they can assess the performance of current bus services. Although the existing data provides a good overview of bus services on the whole, having visibility of the business and operations of a specific identifiable operator will ensure that passengers have trust in their local service and confidence that, if they choose to take the bus, it will meet their needs. Clause 26 achieves that by amending the Statistics of Trade Act 1947 to enable the publication of existing operator-level bus data. It states that the Secretary of State must give notice to the industry prior to the publication of such data. Section 9 of the 1947 Act sets out rules governing the disclosure and publication of information collected under the Act. In particular, it requires the consent of individual undertakings before information identifying them can be published. Disapplying the requirements in section 9 will allow the Department to publish operator-level information collected during the qualifying period, even in cases where written consent cannot reasonably be obtained from a large number of the individual operators concerned. These provisions will enable the timely and transparent publication of operator-level bus data, improving access to information while maintaining appropriate safeguards.

We have struggled with some clauses in the Bill, but clause 24 is perhaps the most opaque of all the clauses we have been asked to consider. It takes quite a while to go through all the references to work out what the clause actually means, but once that is done, it becomes clear that it is in fact a tidy-up exercise of the requirement for the registration of local services to the traffic commissioner. It maintains equivalent obligations in Wales as apply to England and ensures that the Transport Act 1985 is read through the lens of subsequent data protections. The clause also retains the existing power of a traffic commissioner to refuse registration of a scheme if they believe that the applicant has not given them such information as they may reasonably require in connection with the application. The manner and type of such communication will be set out by the Secretary of State in regulations—okay. The one area that I have some concerns about is clause 24(4), which deals with powers conferred on the Secretary of State, as it appears to go much further than the reasons given in the explanatory notes for why subsection (4) is necessary. I will read a short paragraph from the explanatory notes: “Subsection (4) enables Traffic Commissioners to share existing registration information with the Secretary of State. It also ensures Traffic Commissioners can provide information about ongoing applications for the registration, variation or cancellation of services received before this clause comes into force”. That is the rationale behind subsection (4), but its wording gives unfettered power to the Secretary of State to use any information, provided for any purpose, without restriction. The subsection states: “in which case the information is provided without restrictions on its disclosure or use”. Why do I care about this, and why is it potentially important? It is simply because the information about a scheme could be deeply commercially sensitive. Not every bus company is a LABCo; there are private sector operators in competition with one another. The commissioner can reasonably require full details of how an operation will be undertaken, including its financial elements. The current drafting of subsection (4) allows the Secretary of State to disclose that deeply commercially sensitive information. Operators are required to give that information to the traffic commissioner—without it, the commissioner could refuse to grant an application—and the Secretary of State then gets their hands on it and can do whatever they want with it, without restriction on its disclosure or use. I highlight that point to Minister and, through him, to officials. Why should the Secretary of State have such a wide-ranging power? It is not necessary for the purposes of the Bill, as set out in the explanatory notes, and it just seems to have slipped through the gap. Can the Minister please explain why? Government amendment 18 makes a technical correction and I have no objection to it. I will also skip over Government amendment 19, in the interest of speed, for the benefit of the Government Whip. Clause 25 amends section 141A of the Transport Act 2000 to allow the Secretary of State to make regulations that require franchising authorities to provide data about services, akin to registration information, which we have just talked about. The clause also allows the Secretary of State to make regulations authorising the collection and publication of additional categories of information. The intention of clause 25 is to obtain a better understanding of the nature of the services that are currently being provided, who is providing them and how they are doing so, including an understanding of the vehicles used, the number of staff engaged and the cost. I am developing a bit of theme here, but so what? What will the Government do with this information? Why is it useful? In itself, it does not change behaviour. I am not against the collation of the information, so long as it used to good effect, so I would be grateful for the Minister’s explanation of how he intends to use it. Clause 26 deals with information obtained under the Statistics of Trade Act 1947, which gives powers to competent authorities to require organisations to provide data, for economic forecasting, in essence—the kind of data that is used by the Government Statistical Service. Section 9 of the 1947 Act prevents the disclosure of such information that identifies an individual undertaking without the prior written consent of the provider of the information. That is obviously very sensible. The Government want to find out what is happening in the economy to inform their policies, so under the 1947 Act they gave themselves power to require businesses to provide interesting information about their operations. As an aside, I used to run a business, which was asked for information by the Bank of England on a quarterly or perhaps six-monthly basis so that it could get a feeling for what was happening in the economy. It did not want the Westminster bubble or the square mile bubble; it looked at the real, lived experience of businesses. Those businesses provide useful data, which informs interest rate decisions and Government policy. But the last thing a businessman wants is for that information to be sent out into the public realm with their name attached to it. If they said, “Oh, isn’t it terrible? Orders have gone through the floor and we’re planning to lay a whole load of people off,” they would not want that information to be in the public domain; they provide it in confidence.

11:15:00

Section 9 of the 1947 Act therefore prevents the disclosure of that information from identifying an individual undertaking, unless they agree to it in writing. Proposed new section 9B(1) disapplies that restriction from information obtained from a person holding a public service vehicle licence—not a bus driver with a PSV licence, but the organisation that operates PSVs. I think I am right in assuming that the term “person” includes a corporate personality in this context, but the Minister can disabuse me of that if I am wrong.

The clause will also introduce a new section 9C to the 1947 Act, which requires that

“the Secretary of State must publish a notice…describing in general terms the information to be published, and…stating that the information is to be published in reliance on that section.”

I am a bit concerned about that, because the clause disapplies a very necessary protection in the 1947 Act. There needs to be a good reason for that, and it is not clear to me what that reason is.

It is unclear to me what the practical impact of new section 9C is. If it were to allow providers of information time to appeal the decision to publish, I could understand that. If the Secretary of State is required to publish in general terms the intention to publish more detailed information, there must be a reason for that. Is it to allow organisations that disagree with its publication to go through some process of appeal? If so, there is no reference to that in the Bill. What mechanism for appeal is provided? Without a mechanism identified, the clause is useless. Perhaps the Minister can expand on that and tell us what other purpose there is for the new section.

From what I have heard from Committee members, we share the goal of improving bus services for passengers. These clauses are a direct response to a problem with how information on bus services is captured. I believe that solving it is critical to delivering better bus services. Before I address the shadow Minister’s specific points, let me say that the Government have made transparency and open data a key priority. As I set out in detail in my Department’s transport data strategy, transparency fosters accountability, drives improvements in public services by informing choice, and stimulates innovation and growth. It is simply unacceptable that a passenger is unable to consult a single source of information to get a full picture of the services available in their local area and beyond. That is a result of different ways that service registration has been delegated across the country and the fact that there are multiple bus data streams, including the Bus Open Data Service. In fact, many bus registration processes are still completed using paper applications. That is simply inefficient. Bringing multiple sources of information together in one place will really help to improve the situation for passengers. The Bill will not change who must register a bus service; it will provide a power to change from paper to electronic the means by which a service must be registered with the traffic commissioner. The shadow Minister expressed concerns about the implications of the measures for bus operators. My noble Friend the Rail Minister addressed that in the other place, saying that we will be mindful of the commercial sensitivity concerns, and I reiterate that commitment. Having greater visibility of individual bus operators will increase accountability and help to build passengers’ trust, in turn giving them confidence to take the bus. Amendment 18 agreed to. Amendment made: 19, in clause 24, page 20, line 43, at end insert— “(4A) Where a local service is provided both inside and outside England, subsection (4) does not authorise the provision of information which relates to any part of the service which is provided outside England.”—(Simon Lightwood.) This amendment provides that a traffic commissioner may not provide to the Secretary of State information about cross-border services which relates to any part of the service provided outside England. Clause 24, as amended, ordered to stand part of the Bill. Clauses 25 and 26 ordered to stand part of the Bill. Clause 27 Powers of inspectors Question proposed, That the clause stand part of the Bill.

With this it will be convenient to discuss the following: Amendment 67, in clause 28, page 24, line 37, after “nuisance” insert— “, including sustained anti-social auditory disturbance.” This amendment would allow local transport authorities to prohibit disruptive anti-social forms of noise such as from telephones through byelaws. Clauses 28 and 29 stand part.

The clause supports bus franchising authorities and local transport authorities to deal effectively with fare evasion. That is achieved through amendments to the definition of “inspector” in the Public Passenger Vehicles Act 1981, to allow local transport authorities and Transport for London to appoint their own transport safety officers, or transport support and enforcement officers, as inspectors, alongside the existing ability for bus operators to do so. That will support the safety of all passengers and enable local authority officers to have the same powers as those who are employed or authorised by a bus operator, ultimately enabling the local transport authority to prevent fare evasion. On amendment 67 tabled by the hon. Members for Wimbledon and for South Devon, I understand what they are seeking to achieve. The Government are committed to tackling antisocial behaviour, including “headphone dodging” on buses. Clause 28 gives local transport authorities powers to make byelaws on their buses, providing them with scope to tackle a broad range of antisocial behaviours. That could include making byelaws to tackle disruptive forms of behaviour. The Public Service Vehicles (Conduct of Drivers, Inspectors, Conductors and Passengers) Regulations 1990 set out the behaviour expected of drivers and passengers travelling on buses. They provide powers for drivers, inspectors and conductors, or the police, to remove a person from a vehicle if they “play or operate any musical instrument or sound reproducing equipment to the annoyance of any person on the vehicle or in a manner which is likely to cause annoyance”. Breach of the rules carries a possible fine of up to £1,000 on conviction. As such, amendment 67 is not necessary, and I ask that the hon. Member for Wimbledon does not press it to a vote. Clause 28 enables local transport authorities to introduce byelaws to tackle antisocial behaviour on vehicles, as well as within and at bus-related infrastructure, such as bus stations. The clause was developed to address the current situation, in which there are no specific powers available to local transport authorities to make byelaws to deal with antisocial behaviour on their bus networks.

Order.

11:25:00

The Chair adjourned the Committee without Question put (Standing Order No. 88).

Adjourned till this day at Two o’clock.