Section 1 - Background, aims and options
Background to policy issue
Bus patronage in Scotland (and the UK) has been declining since the 1960s with the trend continuing after deregulation and privatisation under the Transport Act 1985. As a local service, buses work best when services are tailored to meet local needs and circumstances.
While the Transport (Scotland) Act 2001 attempted to set a framework for the improvement of local bus provision, outcomes did not meet expectations. Stakeholder views found in the Bus Services in Scotland- Improving the framework for delivery public consultation highlighted that elements of the legislation were unclear or over-burdensome thus limiting their uptake and practical effect.
To address this, the Scottish Government amended the Transport (Scotland) Act 2001 (“the 2001 Act”) by introducing a range of flexible tools under the Transport (Scotland) Act 2019 (“the 2019 Act”) that local transport authorities can use to revitalise their bus networks according to their own needs. These powers include Bus Services Improvement Partnerships, Local Services Franchises, and local authority run services, which sit alongside their existing ability to subsidise services.
The amendments introduced by the 2019 Act build on (and in some cases replace) existing powers for local transport authorities. In particular, the Quality Contracts model found in the 2001 Act is replaced by the Local Services Franchise model. The new Local Services Franchises model is designed to enable local transport authorities to streamline services and develop better integration and control over fares. It also increases the range of situations in which local transport authorities can consider using the franchising option. The model requires a local transport authority to prepare a franchising framework which determines the geographic area of the franchise, what local services are to be provided, the standards to which these services are to be provided, and any new additional facilities to be provided in the area.
The system is designed to ensure that appropriate checks and balances are in place to assess whether a local transport authority’s franchising proposals are robust and deliverable. This structured approach will ensure that decision making is more transparent via a process of rigorous assessment and evidence-based analysis. A key aspect of this is the formation of independent panels that are convened by the Traffic Commissioner to assess franchising proposals.
Purpose/ aim of action and desired effect
The Local Services Franchises (Traffic Commissioner Notices and Panels) (Scotland) Regulations 2024 set out the role of the panel(s) to be convened under sections 13J(2) and 13O(2) of the 2001 Act. A panel must decide whether or not to approve the franchising proposal and must consider, among other things, whether the local transport authority has reached a reasonable conclusion in deciding to make, vary or revoke the franchising framework.
A panel will consist of three members appointed for a period by the Traffic Commissioner (TC). To ensure that the panels can carry out their functions effectively, this instrument sets out the eligibility criteria for appointing panel members, which are focussed on ensuring members have appropriate knowledge and experience, and that any real or perceived conflicts of interest are avoided.
This instrument also provides that panel members may receive remuneration at a level to be determined by the TC, and that the Commissioner will be required to pay or reimburse members’ reasonable expenses. The TC will also provide administrative support and accommodation appropriate for a panel to discharge its functions.
A panel may invite individuals to submit written evidence as part of its evidence gathering and may hold oral evidence sessions in which the panel determines the procedure to be followed. This approach allows panels to be open and transparent by holding evidence sessions in public to discuss specific aspects of a local transport authority’s franchising proposal, particularly if it is causing potential concern to stakeholders.
The instrument also confers powers on the TC to issue guidance or general directions in relation to a panel’s decision-making process.
Options (considered so far/ still open)
This BRIA, considers the impact of the following options:
- Option 1 - Do nothing.
- Option 2 - Proceed with the laying of the Local Services Franchises (Traffic Commissioner Notices and Panels) (Scotland) Regulations 2024.
Option 1
The baseline scenario. Under this option, the basic requirements for the Traffic Commissioner to convene a panel are in place under the 2001 Act. However, the Act does not provide necessary detail in relation to various aspects of the panels, such as the criteria by which persons may be eligible to be appointed to a panel and the panels’ decision-making processes. Without these regulations, it may be difficult for the Scottish Traffic Commissioner to set out transparent processes in respect of the panels. A lack of detail and transparency in the franchising proposal approval process may lead to unnecessary delays and create uncertainty about the effectiveness of the overall franchising model.
Option 2
Involves introducing secondary legislation which makes more detailed provision about the panels. In particular, the regulations make provision about the appointment, removal and replacement of panel members, panel members’ remuneration and entitlement to expenses, and the decision-making processes of the panels.
Franchising is an important tool for local transport authorities to improve services in their area. However, it is a significant intervention in the local bus market. The independent panel will assess whether the local transport authority’s franchise proposals are robust and deliverable, determining whether they can proceed or not. This structured approach will ensure that decision making is more transparent via a process of rigorous assessment and evidence-based analysis.
Sectors/ Groups affected
The sector affected by the options identified above is local government as it is local transport authorities who decide to seek approval for their franchising proposals.