Section 19: DfT issues councils advice
DfT has written to local authorities clarifying changes to guidance for Section 19 and Community Bus Permit 22 holders.
The five-page letter sent on 9 November lists activity is views as ‘non-commercial’ – allowable under Section 19 guidance – and suggests community transport holders running commercial work set up a new undertaking with O licensing to separate the work. It says CTOs who can demonstrate they are taking ‘urgent steps’ to change their operating model have not been subject to enforcement action.
“The Department’s letter of 31st July [announcing the new guidelines) was sent to local authorities as permit issuing bodies, not because of their role in awarding contracts,” says the latest letter from DfT. “We have not asked any local authority to cancel any contracts and do not expect that they should have to do so.”
The guidance letter says local authorities could be challenged by unsuccessful bidders after a contract award to an S19 operator, with ‘limited’ opportunities to challenge during the life of the contract: “…we do not expect authorities to be at significant risk of successful legal challenge if they continue with their existing contracts whilst affected operators transition to a new operating model.”
“All CT groups that are operating on a not-for-profit basis have, since 1985, been able to apply for permits to carry passengers in a bus or minibus without first holding the Public Service Vehicle (PSV) operator’s licence that would otherwise be required. This has been the legal position that, until recently, was set out in all guidance to local authorities and operators. Both local authorities and operators have therefore been awarding and bidding for contracts in good faith.”
The letter suggests ‘road safety reasons’ why a CTO may have to change its operating model: “Even if both operators [one O licensed, the other S19] won the same local authority transport contracts, used similar vehicles and employed their drivers (rather than using volunteers) the vehicle operated by a CT group may have had a less stringent MOT test and the driver needed fewer road safety qualifications”
The DfT defines ‘non-commercial’ as:
- any charge made to passengers is substantially less than the cost of providing the service and no other payment is made by any other person in exchange for the service.
- the service consists of an occasional (rather than regular) activity, organised on a voluntary basis (with an unpaid driver) for a specific group of people – even if the passengers share the costs. This could include day trips undertaken on an ad hoc basis.
- where the use of a vehicle is for the purpose of providing transport for persons who have paid charges for services other than transport and the transport provided is merely incidental to the provision of those other services. This could include transport provided as part of a day centre or lunch club.
- where there is no commercial market for that service – even if the payment made by passengers or another party might exceed the costs of providing the service. This could include:
- where there were no bids received for a local authority contract from commercial operators; and
- where a CT group is running a registered bus service and there are no alternative providers who hold a PSV O licence for journeys to and from similar destinations.
A copy of the letter and a templated letter for local authorities to send to CTOs can be downloaded at https://goo.gl/ZsGD5t