Section 19 lines blurred further

I have just read the response of Scotland’s Highland Council to the DfT’s consultation on changes to Section 19 and 22 permit operation.

I’m assuming readers haven’t been out of the country for ten years, and all understand that the concern of commercial operators – some of whom have lost half their work to S19 community transport operators (CTOs) – is that they are being undermined on the cheap, by fleets often paid for by the state, by a permit system which is not only unchecked but uncheckable, using unqualified drivers.

Highland Council makes many points in the consultation but the impression I get from their response is that it boils down to three issues: In a rural area, losing transport services will isolate people; operating with O licences is more expensive with Section 19; and, ipso facto, commercial operators charge the council more.

Having interviewed many CTOs, I am aware of the social value of the core services they provide to isolated and vulnerable individuals. But this care package is not unique to CTOs. Bus services and, for that matter, coach services also cater to loneliness and isolation and provide a social service, so the notion that, because passengers pay the wages of a small company, it does not have a valuable social role is absurd.

Indeed, the O licensing regime recognises this socially-necessary function with checks and balances to ensure those vital services are not interrupted; seeking, for example, proof of financial standing so that people with no alternative to public transport are not let down. This happens in few other business sectors. I might argue that, had those financial conditions applied in Cambridgeshire and the West Midlands, several CTOs might not have found themselves out of ‘business.’

Those failures were not of simple, charitable, volunteer-run operations but large, quasi-commercial operations funded by contracts won in commercial, open tender, with well-rewarded managers and paid drivers. It is not telling that the council has given the job of untangling the vast West Midlands CTO to a commercial operator?

I can scarcely imagine the furore that might have arisen had ATG been a commercial operator. I suspect the council would have made the failure front-page news, riven with accusations of profiteering and incompetence, especially in view of the £7m a year it was given from public funds. But because ATG was seen to be a charitable enterprise, the failure was greeted with sympathy and a big council rescue package.

Is it not the reality that councils have become addicted to running mainstream, statutory services on the cheap? Of course, their budgets have been under attack for almost a decade, and they have ended up in this situation in desperation, doing their best to rivet together the chassis of core transport services, but most of the commercially-run services they have handed to CTOs at tender were not run by rapacious, greedy corporations but local businesses employing local people.

Highland Council, by virtue of its territory, is now arguing that the already contentious ‘ten-mile limit’ exemption be a bigger radius. And one response suggests that bids for tendered contracts should be discounted altogether if they are significantly more expensive than those of CTOs, thus allowing the CTOs to run them ‘uncontested’, in accordance with the DfT’s guidance.

The lines are already blurred, and scrubbing at the new guidelines with an eraser cannot be helpful. Can we not predict that some O-licensed operators might hand back their discs, collect some Section 19 permits, and save themselves a lot of external oversight and cost by trading in a smaller area? Maybe pay themselves a decent salary in lieu of retained profit?

There must be a reason that not one single member state other than the UK has sought a derogation from the EU’s 1071/2009 regulation. My suspicion is that most could foresee the bear trap UK lawmakers have stumbled into, but it’s also possible that, as it values its isolated and vulnerable people as highly as everyone else, it felt they should be accorded the same level of protective legislation as everyone else.

I have always accepted that most CTOs are well-intentioned, charitable services which are not so much about transport as social care. They need and deserve some support. My argument is not that they should be overburdened with legislation, but simply that state support should be given as freely and charitably as the service itself is given, and not through statutory service provision finances.

This is a longer version of a comment piece in the 26 July issue

One thought on “Section 19 lines blurred further

  1. I khan says:

    As stated by Traffic Commissioner Kevin Rooney in a Public Inquiry in 2016 (Alan Borthwick & Campbell Minibus Hire), EU legislation requires that a PSV O-Licence is held if passengers are being carried for payment, whether or not a profit is being made. There is a misconception that “non-commercial” means not making a profit, when in fact it means not being paid money. TC Rooney: ‘Being paid is commercial activity regardless of whether there’s profit’.
    Therefore, Highland Council should be aware that if they are paying any CTOs for provision of services and if these CTOs are using salaried drivers, their activities are in contradiction to regulation EC 1071/2009.
    EC 1071/2009 is constructed in such a way that it lays down common rules for fair competition by all member states and can be widely adopted by all road transport operators and not just those operating under a S19/S22 permit.
    The fact that the UK authorities failed to update the 1985 Transport Act to bring it in line with EC 1071/2009, does not mean that these organisations can continue to operate outside of the law by virtue of their ‘social value’.
    If you consider the most recent example of ATG West Midlands, who despite having over £6 million in reserves and funding of over £7 million filed for bankruptcy leaving Birmingham City Council high and dry. I feel that this was due to a number of factors including an element of pressure from the DfT’s change in adopted policy with regards to EC 1071/2009 and compliance issues. However, the UK authorities’ failure to enforce this policy has found them facing a Judicial Review.

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