EU decision on CT funding legality

A decision has been made by the European Commission concerning the Bus and Coach Association’s urging of an investigation into alleged unfair community transport operation (CTO) funding. The Commission looked at two councils’ CTO funding practices, Nottinghamshire County Council (NCC) and Derbyshire County Council (DCC). It concluded that the funding granted by NCC to CTOs during the period 2007 to 2013 does not constitute State aid. Regarding the funding granted by DCC to CTOs during the period 2007 to 2013, the Commission concluded that the funding constitutes state aid. It found the United Kingdom of Great Britain and Northern Ireland put that aid into effect without prior notification to the Commission, in breach of Article 108(3) of the Treaty on the Functioning of the European Union. However, it has decided to consider that aid compatible with the internal market pursuant to Article 93 of the Treaty on the Functioning of the European Union.

Despite not agreeing with the Commission’s conclusion, the Bus and Coach Association noted its efforts have brought about changes in the way authorities make grants, the specific amounts allowed, the use of granted vehicles and the separation of accounts. The organisation also noted that the UK authorities scaled down the investigation to Nottinghamshire and Derbyshire, however it said this would not stop it from making complaints on behalf of members to the Commission regarding other local authorities and CT Groups.

The Association is also involved in an investigation over licence issues concerning CT sectors performing a Public Service Obligation (PSO). It expects the Commission to move to the Infringement Reasoned opinion stage in this investigation in due course. The trade body has questioned why part of the grant allegedly appears to be used to pay wages when according to the Commission they are volunteers. The Association described the CT sector as an ‘arm’s length trading arm’ of local authorities, which it says competes with other bus and coach operators, yet providing councils with a lower price than operators from the private sector. The organisation asks where did monies come from to establish such trading arms?
Commenting on the European Commission’s decision, Bus and Coach Association founder, Martin Allen, said, ‘At first we were disappointed, but even though it wasn’t in our favour it has resulted in more clear cut guidance of what organisations are allowed to have and allowed to do.’

Martin then went on to say his organisation’s further investigations into driver licence, Driver CPC and 1071/2009 operator regulations are ‘going our way’. He said, ‘Even though we didn’t win out this time, it doesn’t stop us from making further complaints. To become a CT operator requires no professional qualifications whatsoever, no good repute, no financial standing, no qualified drivers, no Driver CPC, no tachograph rules, no corporation tax and you are in business all for less than £100 set up fees. Will the Commission allow one member state to distance itself from the 1071/2009 Regulation and put lives at risk?’

The official decision can be found here:

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