Section 19: consultation launched

The Department for Transport has begun its consultation over Section 19 permits – but has raised hackles of PSV operating licence holders

The promised consultation on Section 19 and 22 has begun but has already come under fire from the Bus and Coach Association’s Martin Allen.

The DfT promised a consultation process shortly after issuing new guidance on using S19 permits in July last year – advice which sent community transport into a tailspin. It promised this consultation again in November, after issuing revised guidance, but delayed it to attend Transport Select Committee hearings.

At the end of those hearings, the DfT promised guidance that would end in March, then ‘Spring’ and having now launched its consultation document, has a deadline of 4 May for responses.

But although the DfT will accept responses from PSV licence holders, a significant tranche of the questions seem to be aimed at providing an impact assessment for the CT sector. As was admitted at the Select Committee, there is no central register of S19 licences and the DfT acknowledges that it does not know how many licences are in issue.

The guidance broadly follows the November recommendations, pointing out that ‘non-commercial’ does not mean ‘not for profit’ and attempting to align with EU law. It proposes changes to the 1985 Transport Act to achieve this.

“As a general rule, if a transport service is provided by an organisation in return for payment, that service should be treated as commercial, even where the organisation is not-for-profit,” the consultation document says. “Payment includes any fares charged to passengers (either individually or in groups) and any other payments obtained from any third party (e.g. a local authority, under a contract or conditional grant arrangement) in exchange for providing the relevant service.”

“The Government firmly believes this way of operating should continue, but this reasoning does not apply where a not-for-profit permit holder is competing with a profit-making PSV licence holder to provide the same services.”

To meet the ‘non-commercial’ aspect of law, the document suggests Section 19 operators can continue to use their licences if all of the services operated fall within one of five categories:

  • • The service is free of charge – passengers pay nothing though voluntary donations and grants not conditional on providing the service are allowed.
  • • Any charge is ‘substantially less’ than the cost – as a rule of thumb, more than 10% less than cost.
  • • Any charge equals or exceeds cost – but only where there is no commercial competition, substantiated by a council statement or agreement from local commercial operators.
  • • Occasional services – paid for but irregular in nature, organised with a voluntary driver for a specific group of people, not the general public.
  • • Incidental services – as a part of other paid-for services such as day care centres or lunch clubs.

Section 19 operators whose main business is other than transport – such as care homes and schools – will be allowed to continue to operate. But the document also suggests Section 19/22 operators could take advantage of the third opt-out from O licensing, which states that ‘Undertakings engaged exclusively in national transport operations having only a minor impact on the transport market because of the short distances involved’ may be out of scope of O licensing.

The DfT says it is considering seeking this EC opt-out based on services within a county or administrative boundary, or within a radius of 15 to 20 miles of the operating centre. For S19 operators instead seeking to separate operations and run tendered contracts and fare-stage under O licensing, the government is making £250,000 funding available.

“This consultation appears to be as much about gathering information on a licensed transport sector over which the DfT has completely lost control as it is about following European law,” said Martin Allen of the Bus and Coach Association. “The exemption examples seem to be a guide to getting around the law.

“While I understand that operator licensing is the core issue, it does nothing to clarify professional driver licensing issues and DCPC obligations which go hand-in-hand with vehicle licensing. The government needs to be put on notice that the BCA intends to watch the outcome of this process, and ensure through the European Community and through courts that the law is observed.”

Martin Allen said he is due to meet with EC officials in Brussels on 21 February, and is planning to run a separate consultation on the Section 19/22 issue, open only to bus and coach operators.

• The full text of the consultation paper can be downloaded at

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