An open letter to Lilian Greenwood MP

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An open letter to Lilian Greenwood MP Lillian Greenwood

This week, the editor has given his blog over to an open letter sent to Lilian Greenwood MP, who chaired the Tranpsort Select Committee into the Section 19/22 guidance, and led the Parliamentary debate on the subject on 10 May.

Dear Mrs Greenwood,

 

I was a keen observer of the Transport Select Committee debate on Community Transport, focused on the use of Section 19 and 22 permits, at which both sides of the debate – commercial operators and the CT operators – were represented.

I was therefore shocked to read Hansard and to discover that this worthwhile evidence session has been corrupted to present in Parliament a completely one-sided view which significantly subverts the truth and even descended into a personal attack on the Bus and Coach Association’s Martin Allen.

Throughout this debate, nobody has doubted the value of the CT sector in providing a caring and valuable transport service for vulnerable people. Time and again, the commercial sector has offered its support for those voluntary services, and at no time has Martin Allen ‘bullied’ the CT sector in relation to that work. You heard this for yourself at the Transport Select Committee debate.

To conflate those services with the reality of the challenge faced by commercial operators, who have seen contestable, tendered contracts for mainstream home-to-school transport awarded to S19 operators, is frankly a disgrace. You are aware that S19 operators and CTOs, utilising state-funded vehicles and with none of the legislative burden and safety training of the professional sector, have undermined the ‘bread and butter’ work of family businesses.

You will be aware that some of those businesses, faced with the loss of those contracts, now being run at less than cost, have laid off drivers; in rural areas, this has had a significant impact on the local economy. Indeed, some of those operators have been unable to continue and have closed altogether. Yet at no point did this feature in a Parliamentary debate.

You said, in Parliament: “A vibrant, not-for-profit community-based system is becoming increasingly important to complement existing commercial bus and taxi services, and to plug gaps in provision that are growing in many places because of pressure on local authority budgets. Last summer, however, the community transport sector faced an existential crisis.” The crisis was not caused by the services you refer to in that same sentence. The problem is not the gap-plugging ‘complement’ to existing commercial services, but the wholesale award of those existing commercial services to a sector with little or regulation, no obligation even to give drivers regular health checks, and using assets which have often been funded by rate payers (who include commercial bus and coach operators and their employees). How can that be right?

Indeed, the challenge is even greater than this. Some Section 19 permit operators openly advertise minibus hire to the general public as part of the service they provide. Occasionally, they dress this hire service up as available only to ‘community groups’ – a meaningless phrase which could be the local WI visiting a stately home; this is core business for commercial private hire operations.

You said: “It is widely acknowledged, including by the Government, that the regime has provided an effective framework within which not-for-profit organisations can safely provide community-based local transport services. The Government have also very broadly accepted throughout that the long-established permit regime still achieves that.” It is simply untrue that the permit system is ‘an effective framework’; indeed, it is barely true that it is a system at all. As you heard yourself in evidence, this ‘system’ is one with an unknown number of permit-awarding bodies, often awarding permits to themselves, in which nobody knows how many current permits are in issue, or to whom.

The truth of what has happened is revealed by another of your statements in the House: “In many places community transport operators are filling gaps. In other places, they are providing local authorities with an affordable option to continue providing services to their communities.” Local authorities have, indeed, been complicit in subverting the purpose of these permits, withdrawing direct grants to CTOs and replacing the income with contracts; services bought ‘on the cheap’ to fill funding shortfalls. Had they continued funding them, this situation would never have arisen.

It is not true that the CPT’s Stephen Salmon was ‘relaxed’ about Section 19 permits. Mr Salmon, speaking directly to you at the Committee, said he was alarmed at the lack of control over permits. He also explained how commercial operators were aggrieved when they lost contracts to CTOs operating with none of the overheads of Operator Licensing.

It is telling that Sir Vince Cable became embroiled in the debate – he has a declared interest in social enterprises, as Chair of the Hackney Community Transport Group, now renamed HCT Group. But he answered your questions, inadvertently, when he pointed out that HCT – as one of the more mature CTOs – long ago saw the iceberg coming and took the course of achieving professional operating standards. This situation was clearly foreseen, not only by the commercial sector but by CTOs themselves.

Arguing that the absence of profit – though often some very handsome salaries – defines the CT sector is naive. I know of many unprofitable commercial operations. If the lack of profit negates the need for a commercial licence, and this becomes the definition, you can look forward to many quasi-community-transport operations in which the directors and staff enjoy a good lifestyle after ditching the cost and obligations of commercial licensing altogether by the simple expedient of cultivating their P&Ls to show nil retained profit.

It is not for nothing that no other member state sought a derogation from a consistent public transport licensing regime. Throughout the EU, services like those provided by CTOs exist in great number, regulated in the same way as commercial operations. In other member states’ view, vulnerable people should have the same safeguards of regulation enjoyed by the general public. The seeds of this situation were sown by that derogation, and we have since become accustomed to an erratic patchwork of socially-necessary services supplied by the voluntary sector, and feeling smug because it is cheap.

I am not sure I know the solution, but the first step must be to disentangle the two sectors. I echo your thoughts about the DfT sitting on this issue for too long; this period has not been, as you suggest, a matter of months but several years during which Martin Allen sought to meet the CTA and DfT to discuss this problem, and was completely ignored. Due to this lethargy, he has sought the backing of the EC, and he believes impending proceedings will force the hand of the Government.

Martin Allen has not, as was said in the House, set about bullying the CT sector, but has been motivated by a significant number of transport operators who have seen their businesses and workforce shrink because they face unfair competition from largely unregulated sector, running vehicles which have often been publicly funded. To characterise the BCA as insignificant, as you did, is an insult to his selfless and principled stance which, far from profiting from his enterprise, has cost him and others in the BCA greatly in terms of business and health.

 

Yours Sincerely

Mark Williams

Group Editor

Bus & Coach Buyer

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