Bus Services Bill [HL] - Committee (2nd Day) (Continued)

House of Lords, 4 July 2016.

Lord Kennedy of Southwark (Labour)

My Lords, Amendment 34 is proposed by me and my noble friend Lady Jones of Whitchurch. It would require the franchising authority or authorities to give consideration when drawing up a scheme to how the not-for-profit sector could be involved, the purpose being to contribute to the long-term sustainability of the franchising scheme, which, one hopes, will give local people a better bus service than they enjoy at present. The not-for-profit sector is thriving in a variety of areas. Expanding this model in the delivery of bus services is one way to contribute to ending the decline in bus services and routes that we have seen over many years, especially outside London, and which has been the subject of discussion during consideration of this Bill. It can complement other providers and deliver on a smaller scale bus routes that really benefit local communities and that can boost the local economy, connecting people with jobs, shops, schools and other services that they may not have had access to in recent years. Our amendment would require any assessment to include such proposals.

I hope that the noble Lord, Lord Ahmad of Wimbledon, does not have “resist” in his notes against this amendment. He has been very responsive today and in our previous day in Committee, and I hope he continues in that vein. Perhaps he will say to us that the amendment is not necessary, or suggest that it might be included in guidance. Of course, it could be in guidance, but as I hope he can see, that would not have the weight of its being clearly in the Bill.

We all want to see better bus services, and this Bill is a very positive step forward, but we need to go a little further to strengthen the proposals in some areas, as this amendment would certainly do. It would make it easier for different models of service to come into play and give a better bus service for all. I beg to move.

Earl Attlee (Conservative)

My Lords, not-for-profit bus services, or community transport, cover a wide spectrum of services, including those operated by charities. I am the first to praise the extraordinary work the sector does for people who need a lot of support in their daily lives—drivers who walk users to their door to make sure they have not lost their keys and then their carry shopping into the hall are local heroes. The sector can also plug a few gaps in services for the general public where there are not enough passengers to make a route a commercial proposition and the hard-pushed local authority does not have sufficient resources to fund a standard bus service.

However, I urge my noble friend the Minister to resist the amendment. Community transport services are not subject to the same regulatory regime as local bus services. Their drivers are not subject to the same stringent training regime as those driving registered services, nor do they need to satisfy many of the other compliance requirements set down by the traffic commissioner.

Services operated under Section 19 of the Transport Act 1985—it is mainly this type of service we are talking about with this amendment—are exempt from many safety and fair competition rules so long as they are not provided to the general public. So how on earth can they contribute to the success or otherwise of a franchise?

The whole issue of services operated under Section 19, and indeed Section 22, permits has been a bone of contention for many years with the EU. If community transport operators were required to enter the local bus market and operate under the same rules as operators of registered services, it would be a different matter, but they are not. There is no level playing field and, at the moment, community transport operators are able to operate more cheaply but without the regulatory safeguards in place for other operators. I therefore urge my noble friend to resist the amendment as gently as he can.

Baroness Randerson (Liberal Democrat)

My Lords, in contrast, I support the noble Lord, Lord Kennedy, in his amendment, because I believe strongly that there is a valuable role for community transport and not-for-profit operators. That role is particularly important in rural areas. I take this opportunity to thank the Minister for the very useful letter that I received today, which gives great detail about the Government’s approach to rural areas. I regret that the information is not in the formal impact assessment; nevertheless, it is now publicly available and useful to us all.

It is important not just that not-for-profit operators work in rural areas but that we look at the widest possible range of community-based schemes in urban areas as well. I give as an example Hackney Community Transport, which operates commercial services for Transport for London, and Ealing Community Transport, which runs buses in Dorset with Go-Ahead. Those are urban examples that have spread out from the area where they started, but the point I am making is that community-based and not-for-profit transport services are part of a flexible mix. If we are truly to improve bus services, we must have more variety: we must have an alternative to the big five bus companies which effectively run the vast majority of bus services outside London. Although they compete, in most cases they do not do so on the ground—they rarely compete against each other service to service. We need an alternative to that if we are to have a flourishing bus service throughout Britain.

Baroness Scott of Needham Market (Liberal Democrat)

My Lords, I support the comments of my noble friend. I had not intended to speak, but the noble Earl, Lord Attlee, slightly provoked me into it when he commented that not-for-profit services “plug a few gaps”. I can tell him that in areas such as mine, in Suffolk, they are the service. Almost all rural areas in Suffolk now have no bus service.

I agree with the noble Earl that I would not want community transport schemes to be tied up in a whole plethora of red tape, but nor would I want emerging franchising models to ignore the opportunities provided, in the way that my noble friend Lady Randerson has described, or inadvertently to disadvantage smaller community services. It is easy to see how you could do that—by cherry picking parts of their routes and not linking with others, you can affect their viability. Whether it is an urban or a rural area, but particularly in the rural area I know, it is important to understand and get the ecology of the bus industry right: to understand that something you do to one part is going to impact on another.

Earl Attlee (Conservative)

My Lords, if I can stimulate a contribution from the noble Baroness, I have done the Committee a great service.

Lord Ahmad of Wimbledon (Conservative)

My Lords, I thank the noble Lord, Lord Kennedy, for his amendment, which would require franchising authorities to consider, as part of the assessment of their proposed franchising scheme, the extent to which not-for-profit bus operators can be integrated into a franchising scheme to contribute to its sustainability. Let me say at the outset that I sympathise with the aims of his amendment. I recognise the good services that community bus service operators and other not-for-profit bus operators deliver to our communities across the country and know that they often provide flexible and bespoke services which act as a lifeline to many. The intervention from the noble Baroness, Lady Scott, underlined that element.

The Bill recognises the important role that community transport operators play in providing local public transport. Provisions have been included in the Bill to ensure that services operated under community bus permits will not be affected by the introduction of franchising or enhanced partnerships. This will enable them to continue to run their services unaffected by these schemes. I hope noble Lords will agree that these provisions are sensible and that they will help ensure that community bus providers can continue to deliver their valuable services to our local communities.

Even with these protective provisions in the Bill, I recognise the valid point the noble Lord, Lord Kennedy, raises, and agree that authorities looking to improve local bus services should consider how services provided by community transport operators can be best integrated to deliver a better overall network of services for passengers.

Let me assure noble Lords that the Bill does not preclude authorities, as they develop their franchising or enhanced partnership proposals, working with community transport and not-for-profit operators to determine how they can best be integrated into the wider network of services, but I agree with the noble Lord that this approach should be encouraged. I am, therefore, of the view that these issues are best covered through further guidance that will be published to complement the provisions of the Bill. I hope the assurances I have given in this contribution enable the noble Lord to withdraw his amendment.

Lord Kennedy of Southwark (Labour)

Will the Minister say a little more about why he thinks that this should be in guidance? He says that authorities can do this, and that is all well and good. Why then is it not going to be in the Bill? Why should it be in guidance? My worry is that guidance is not legislation. Guidance is forgotten over time, things get moved on and revised, and all of a sudden it is not there and gets forgotten about. Why is guidance better than the Bill?

Lord Ahmad of Wimbledon (Conservative)

My Lords, I have already said that there are provisions within the Bill that protect that element of community transport and not-for-profit operators. While the noble Lord feels that the guidance is not sufficient, it forms part and parcel of the guidance in support of the Bill, on which these new proposals go forward.

Lord Kennedy of Southwark (Labour)

I am not sure the Minister answered the point I was making there. I am thinking of organisations such as Hackney Community Transport. If it wants want to provide services elsewhere in the country, like it currently does for TfL, why should that not be in the Bill, rather than in guidance?

Lord Ahmad of Wimbledon (Conservative)

I do not think I can add any more. If the noble Lord feels that the strength of what the Government are presenting does not meet what he is suggesting, I suggest we discuss this issue. At the moment, we are minded that existing provisions within the Bill, with the assurance of including such provisions in the guidance, provide the necessary safeguards alluded to by the noble Lord. I hope, with this assurance and the continuing discussions we are having on various aspects of the Bill, that he will be minded to withdraw his amendment.

Lord Kennedy of Southwark (Labour)

I thank the Minister for that contribution. I will take up his kind offer to have a discussion outside the House. He has been very generous with his contribution today and with his time. I appreciate that very much. I thank all noble Lords who have spoken in this short debate. I do not agree with the remarks of the noble Earl, Lord Attlee, as I want to see the not-for-profit sector being able to provide bus services, as elsewhere. I thank the noble Baronesses, Lady Randerson and Lady Scott, for their support. The noble Baroness, Lady Randerson, was spot on in speaking about the needs of rural areas and the widest range of schemes available to deliver those services. As she said, Hackney Community Transport delivers services for TfL, so why cannot it, or other providers in the not-for-profit sector, deliver bus routes elsewhere, in urban or rural areas? This Bill is about improving bus services and my amendment helps in that respect, improving the Bill further and giving further options for the provision of bus services. I will leave it there and look forward to talking it over outside the Chamber, but I may well bring the amendment back on Report. I beg leave to withdraw the amendment.

Amendment 34 withdrawn.

Earl Attlee (Conservative)

My Lords, this amendment is all about compensation for loss of business, and its purpose is to make it a requirement on a franchising authority to factor in the cost of compensating bus operators as part of the assessment of a proposed franchise scheme.

I can anticipate the Minister’s response, but I would still like to explain my concerns. If the state needs to remove something from a person for the public good, then the state should compensate that person. It is quite simple: if land is purchased under compulsory purchase power, the owner of that land gets paid for it. I am fully aware that compensation would not have been payable under a quality contract scheme, although the days of quality contracts are severely numbered, and that when toes were dipped in that particular pool of water it ended rather badly, but it does not make it right, which is why my party was not keen on it.

The cost of compensating a bus operator who has to close his business, having failed to win a contract bid, could well run into millions of pounds, taking into account the physical assets—vehicles, depots and land—and the good will that the business enjoys. In one of our previous debates, the noble Lord, Lord Snape, asked what would happen to garage premises in the city centre, and would they be redeveloped and lost, and about all sorts of complications. I will speak about good will again when we reach Clause 5.

If that is not bad enough for the large plcs who would have to redeploy—hopefully—their staff and assets, we should consider the position of SME operators. These businesses will have been established on the back of solid hard work and with considerable financial risk and energy on the part of private individuals, who will have invested their life savings to see their company grow. They stand to lose all that not because they have performed badly, not because they are bad companies and not because their passengers have decided they no longer want to use their services. They stand to lose it all simply because they lost out on a bidding process for the franchise. Apparently, all their endeavours are worth nothing.

The Bill is currently silent on the matter of compensation, which I believe is wrong. I was really quite alarmed by the comments made by my noble friend Lord Young of Cookham at Second Reading, when he said that foreign owners of bus companies, but not British ones, might be entitled to compensation under the TTIP agreement, currently being negotiated at European level. I suggest that the whole issue of compensation needs to be revisited. Is it right that a foreign company could be paid millions of pounds of taxpayers’ money, because its local authority has decided to take control of its local bus services, while a British company is left high and dry with no business and no compensation? The Minister will have to answer this point. I hate to say it, but this all sounds rather unconservative.

It is vital that when a local authority pursues a bus franchising scheme, the process, including a detailed assessment of the scheme, must be as robust as possible. The assessment must look at every single aspect of the proposed scheme, including whether the franchise scheme stacks up financially and represents good value for money because whose money will it be? It will be local taxpayers’ money, so the compensation to bus operators who are put out of business must be an important part of the mix. I beg to move.

Lord Berkeley (Labour)

My Lords, I am interested in the noble Earl’s comments about the poor small investor who has put their life savings into a bus company which is then put out of business because exactly the same thing happens on the railways where most passenger services are franchised. I suppose the difference is that it is usually large bus companies making the bid. Some of them are owned by foreign state-owned enterprises, which means that the Government allow foreign state-owned enterprises to bid and operate train franchises but they do not allow British state-owned franchises to do the same. However, that is a slightly different matter.

Surely this is a question of which end of the telescope you are looking at. If it is question of small shareholders running a bus company in an area, they may well be worthy of sympathy in a different way from what might be called the big multinationals, but either way, experience on the railways shows that while the top management does not usually remain when a franchise changes, everyone else generally retains their job if they want it. In some cases there may be TUPE arrangements in place, but they may not be appropriate here. However, I am not convinced that the arguments for and against franchises are particularly affected by this because in practical terms many members of the workforce of a franchise of, say, a small bus company might think that they are losing their jobs, but they might well be taken on by the people running the franchise because they have local knowledge, they live locally and so on.

Lord Snape (Labour)

I have great sympathy with the amendment moved by the noble Earl, Lord Attlee. I have also listened carefully to my noble friend Lord Berkeley. He commented when speaking to an earlier amendment that there is not a great deal of competition in the bus world. There was competition immediately after deregulation when there were lots of small companies, many of which were perfectly reputable but some not quite as much. My noble friend mentioned the difference between franchising on the railways and franchising for buses. The difference between them is quite simple: we are against one and in favour of the other. I am not quite sure why or how, but that is the situation we find ourselves in as a party.

Lord Berkeley (Labour)

I think that my noble friend is speaking for himself; he is not speaking for me.

Lord Snape (Labour)

I suspect that when we come to debate the future of the railway industry I will be speaking for my party, which is against franchising. And, as I currently understand it, the party wishes to see the railways back in some degree of public ownership. However, let us not get bogged down in the differences within our party between the two industries otherwise we could be on this amendment for a lot longer than we should be.

On the previous amendment, we talked about not-for-profit companies making a bid for franchises. The problem with that reflects directly on Amendment 35. If a successful franchise bid depends on a lower bid, and there is every chance it will be given the shortage of cash in local government and the cutbacks that have been made so far as support for bus services is concerned, obviously some of the smaller and perhaps less reputable companies will start out with an advantage. If you are running a major operation that recognises trade unions, pays trade union rates, provides proper canteen facilities, uniforms and so on, you are not in a particularly advantageous position when bidding for a franchise against a smaller company that does none of those things.

Again I remind the Minister that over the years a lot of these companies have come and gone. The bus industry has rather settled down, and although we deplore the lack of competition, when we had lots of it, it was often denounced as wasteful and unnecessary. Speaking specifically to this amendment, if a company large or small loses its assets as a result of measures inherent in the Bill, surely it is only fair that it deserves to be properly compensated.

Baroness Randerson (Liberal Democrat)

My Lords, I say in response to the noble Lord, Lord Snape, that of course the arguments he makes about less reputable companies fortify my argument that a lot of these things need to be set out in the Bill, so that we can ensure that only the more reputable companies—those that observe those aspects important to passengers and indeed to our environment—are able to win a franchise.

I say in response to the noble Earl, Lord Attlee, that I cannot understand why bus companies should be immune to the usual rules of business in this country. Increasingly local government services are run through commercial companies in various forms. Many commercial organisations are involved in the provision of a range of local authority services right down, for example, to care for children, the elderly and so on. Local authorities franchise services or commission them and from time to time they will change the companies they are working with; someone loses the contract. There are well-known procedures throughout our public life which account for that to happen, thus enabling a service to be handed over from one organisation to another. I cannot see why bus companies should be exempt from that general run of business.

Lord Kennedy of Southwark (Labour)

My Lords, Amendment 35, which has been proposed by the noble Earl, Lord Attlee, is not one that I can support today. As we have heard, the amendment puts a requirement into the Bill that would require the taking into account of any compensation payable to bus operators whose businesses are wholly or partly expropriated by the scheme. I do not think that there are any plans in the Bill to expropriate anyone’s business. The franchising model will work on similar terms to those which presently operate in London, where private bus operators happily deliver services on routes laid down by TfL. They make profits and the service works well.

I agree with the comments made by the noble Baroness, Lady Randerson, who asked why the bus industry cannot be aligned with the rest of the public sector in terms of contracts being tendered for and then won or lost. People move on and things change. That works in the whole of the rest of the public sector and is certainly the case in local government; I have said before that I am a councillor in Lewisham. I am sure that the noble Lord, Lord Ahmad, will advise the Committee, but I think I am correct in saying that the Government do not anticipate any compensation being required if a franchising authority follows the process as set out in the Bill. For me, the Bill is about improving bus services for passengers and increasing the number of bus journeys being taken by people, thus halting the decline in bus routes and journeys over recent years, and that should be embraced by bus operators. Indeed, they may find that they actually make more money if they increase their routes and more people use them.

I look forward to the Minister’s response and I hope that he will allay the concerns raised by the noble Earl and thus demonstrate to the Committee that the amendment is not necessary.

Lord Ahmad of Wimbledon (Conservative)

My Lords, I thank my noble friend Lord Attlee for his amendment, which would require franchising authorities to consider as part of the assessment of their franchising scheme whether it will be,

“more efficient, effective and economic than any other option, taking into account any compensation payable to bus operators whose businesses would be wholly or partially expropriated by the scheme”.

I recognise my noble friend’s desire to ensure that impacts on bus operators are fully considered as franchising schemes are developed. The Bill already addresses many of his concerns, and it may be useful at this point to provide a fuller explanation of proposed new Section 123B, which requires franchising authorities to conduct an assessment of their proposed franchising scheme. I fully acknowledge that moving to a model of franchising is a big decision that will impact on bus operators in the area. That is why the Bill requires authorities that are considering franchising to conduct a thorough assessment of their proposed scheme, including comparing their proposals with other options, which could include partnership proposals and the status quo.

The Bill also requires franchising authorities to think about the effects of the proposed scheme and whether it represents value for money. This will include, of course, consideration of the impacts of the proposal on passengers and bus operators, together with any wider impacts. I hope my noble friend agrees that the provisions in the Bill will require authorities to think carefully about their franchising proposals, compare them to other options and then take a well-reasoned and well-evidenced decision.

I turn to the issue of compensation payable to bus operators that my noble friend referred to. I fully recognise the years of hard work that many bus operators have put into growing and operating their businesses and their concerns about the future. As I have said, the Bill requires authorities to consider both the benefits that franchising could bring for local people, as well as the potential impacts, including those on bus operators. If franchising authorities follow the processes set out in the Bill, local bus operators will have plenty of notice that a franchising scheme is being considered, will be aware of a decision to introduce franchising, and will have more than six months’ notice that services are to be provided under local service contracts. This will enable operators to take any action they think appropriate and to plan ahead in the light of the decision to make a franchising scheme. Incumbent operators will, of course, be able to bid for contracts in any area that decides to move to franchising, and I should reflect that those operators’ knowledge of the local area and local customers is likely to stand them in good stead. In addition, the Bill does not provide franchising authorities with the power to take over the property of any bus operator if a scheme is made—a point made in an earlier debate.

In summary, I am therefore of the view that the Bill already addresses many of my noble friend’s concerns regarding the assessment of the franchising scheme and the need to compare it with other options. He raised the issue of compensation being available to those who do not win contracts, and referred to other schemes, not just franchising. While he makes a valid point, I note that authorities have been able to introduce quality contracts since 2000. This potential risk and impact on bus operators has been around for a significant period. I hope that he has been assured and reassured by some of my comments on the existing provisions in the Bill. I disagree that consideration of compensation should form part of franchising assessments—a point made by other noble Lords—but I hope that this debate has assured him that the Bill includes a thorough and comprehensive assessment process, and that he can withdraw the amendment.

Lord Kennedy of Southwark (Labour)

Can the Minister say more about something I find hard to understand about the amendment? I am a councillor in a London borough and services are tendered for all the time, whether in relation to road repairs, street lighting, refuse collection and so on. People bid for contracts, win them and lose them. If they lose them, the new company takes them on and we do not have debates about paying companies compensation because they have lost their contract. They bid for a price, the council assesses it and a number of factors and makes what it believes is the best decision. I do not see why we are having this dispute or debate. If a company loses a bus route, I do not see why it should be paid compensation. It must have tendered for that route but has lost out in the process to another company that has been deemed to offer better value for money. This is a strange debate.

Lord Ahmad of Wimbledon (Conservative)

My noble friend tabled an amendment and it is right that we have a discussion in Committee. I hope that through the provisions in the Bill that I have highlighted—for example, the requirement to give ample notice—his fears are allayed as regards compensating a business franchise that goes out of operation. The Bill contains proper provisions in relation to, for example, giving notice. The noble Lord, Lord Kennedy, and I are on the same page on this.

Earl Attlee (Conservative)

My Lords, if I have brought both Front Benches together, I have achieved something. Some noble Lords talked about disreputable operators. If, as a result of a franchising scheme, a disreputable operator goes out of business, no one would be happier than me.

The noble Baroness, Lady Randerson, and the noble Lord, Lord Kennedy, picked up on the fact that local authorities are currently putting services out for bid and that operators are either successful or unsuccessful. Noble Lords are right but the difference here is that an operator can be sure that, so long as he has a good commercial model and keeps his customers happy, he can stay in business. However, if he gets hit by franchising, he will be out of business through no fault of his own.

The noble Lord, Lord Berkeley, made an interesting comparison with the railway industry, but he will know that that is on a different scale and people in the railway industry know that that is the name of the game. They will bid for the franchise and amortise all the costs of their investment over the length of the franchise, whereas the operators that I am concerned about at the moment have no risk of being put out of business by franchising because that simply cannot be done. It is therefore a new situation that they could not have planned for.

No noble Lord has explained away my TTIP problem. Regarding facilities for operators, franchising may well provide efficiencies because perhaps fewer workshops and garages are needed. The problem is that someone ends up holding redundant facilities that they used to have a commercial use for. I am not convinced by the response of my noble friend but I will read Hansard carefully and, subject to the usual caveats, I will come back on this. Oh, the Minister wants to have another go at me.

Lord Ahmad of Wimbledon (Conservative)

I would never dream of having a go at my noble friend; I am merely thankful that he has given way. It was remiss of me not to mention the TTIP issue. I understand that investor-state dispute settlement does not prevent a current or future Government who act in accordance with due process changing their laws or policies. My noble friends Lord Attlee and Lord Young referred to this point and it is my understanding that this element is still being negotiated between the European Union and the US.

Earl Attlee (Conservative)

I thank my noble friend for that response and I beg leave to withdraw the amendment, subject to the usual caveats.

Amendment 35 withdrawn.

Amendments 36 to 40 not moved.

Baroness Scott of Needham Market (Liberal Democrat)

My Lords, the amendment stands in my name and those of my noble friends Lady Randerson and Lord Shipley.

It really does not matter which side of the great debate noble Lords are on—whether they favour franchising, as I do, or whether they are fundamentally opposed to it, as we have heard. Both sides agree that the proposal represents a significant risk of a transfer of risk from the bus operators to the local authority. That risk will be carried by local council taxpayers and, in the new regime, local business ratepayers. I should say from the outset that I am perfectly confident in the ability of local government to manage these processes. The noble Lord, Lord Snape, is right to say that this will not come cheap. Local authorities will need sufficient expertise in order to carry out the proposals, and I think that they will be able to, should they choose to invest that expertise. My concerns are about the mayoral model in this regard. It seems to me that what the Government see as the strengths of the mayoral model—a single point of centralised decision-making and a single point of accountability—can also very quickly turn into a disadvantage. Strong leadership can very quickly turn into headstrong leadership. Therefore, it seems to me that robust oversight is key.

In the past few years the LGA—I declare an interest as a vice-president—the Institute for Government and the Centre for Public Scrutiny have all done quite a lot of work on this. The amendment is in line with that sentiment and seeks to ensure that there is independence in terms of the information that is given out and against which a local mayor can be accountable.

I would be the first to admit that I am a bit of a governance geek. That probably comes back to having served on the Audit Commission. However, just to make it clear that this is not just some odd preoccupation of mine, on Friday the Public Accounts Committee in another place published its document about cities and local growth. It is going through these devolution proposals and its intention is to contribute to the public debate and to government thinking at this early stage. Its report raises many of the same concerns that I have just raised. I shall read out a few lines from one of the recommendations because they are important. It states:

“We are not confident that existing arrangements for scrutiny at local level of devolved functions are either robust enough or well supported. Robust and independent scrutiny of the value for money of devolved activities is essential to safeguarding taxpayers’ money, particularly given the abolition of the Audit Commission. Local scrutiny committees are an important mechanism; however, given resource constraints and the absence of independent support”,

there is a limit to what they can do. It then goes on to talk about the absence of “independent institutional scrutiny”, and recommends that by November 2016 the Government should come forward with plans to ensure that local scrutiny of devolved functions will take place and will be robust.

While I confidently expect the Minister to resist this amendment, I hope that he will commit at least to making sure that this report of the Public Accounts Committee is read, understood, and, more importantly, taken into account as this Bill progresses. It is always easier to get it right at the beginning that to retrofit these things into something once it is passed into law. I beg to move.

Lord Snape (Labour)

I rise to speak to Amendment 43 in this group, which seems to do something similar to the amendment so ably moved by the noble Baroness, Lady Scott.

Like the noble Baroness, I am not quite as sanguine about a local authority deciding to set up a franchise scheme, appointing someone to look at it, and then having the ability, regardless of what he says, to go ahead. That smacks a bit of the people’s courts in Germany towards the end of the Second World War. Surely we ought to have something more democratic than that on these somewhat controversial matters. The traffic commissioners, who are widely regarded throughout the transport industry—although under successive Governments, they have been sadly underresourced—ought to be the people who appoint a proper independent arbiter to look at any such proposal. It seems to me to offend natural justice for a local authority wishing to have a franchise scheme to appoint a referee to decide on the merits of that scheme, and regardless of his or her conclusion, to go ahead anyway. I hope that the Minister will look carefully at these amendments and think about toughening up the Bill considerably.

Lord Bradley (Labour)

My Lords, I shall speak briefly to Amendment 42 in my name and that of my noble friend Lord Berkeley. I understand that the amendment may not be perfectly drafted—it may be more appropriate to have “of” rather than “and to”, but we can deal with that when the Minister gives me comfort that he accepts its basic direction of travel.

The amendment’s purpose is to look at the role of the auditor. It would ensure that that role is restricted to areas that are both within the auditor’s competence and entirely focused on the matters set out in proposed new Section 123D(2)(a) and (b), which states:

“The auditor’s report must state whether, in the opinion of the auditor … the information relied on by the authority or authorities in considering”,

whether the authority or authorities would be able to afford, make and operate the scheme and whether the proposed scheme would represent value for money, is of sufficient quality and that the analysis of the information is also of sufficient quality.

Without this amendment, proposed new Section 123D(2) could be interpreted as giving the auditor a wider remit, given that, as drafted, the auditor must give an opinion on whether the authority,

“had due regard to guidance under Section 123B”.

This guidance covers a much wider range of topics than those set out in proposed new Section 123D(2)(a) and (b), including the effects of the scheme, comparison of the proposed scheme to one or more courses of action and the scheme’s contribution to the implementation of wider plans and policies. As such, the current drafting risks giving the auditor a role which is beyond their professional expertise as well as creating conditions whereby a third party is second-guessing a locally accountable authority’s assessment. This in turn could introduce the kind of hurdle that led to the failure of the 2000 and 2008 Acts in creating a simpler route to franchising for those authorities that wish to pursue—I stress those that wish to pursue—this option.

The Government have committed to introducing a practical and efficient method of introducing bus franchising and this amendment, as redrafted, looks to assist them in that process.

Lord Shipley (Liberal Democrat)

My Lords, I should first declare my vice-presidency of the Local Government Association. In principle, I am in favour of the right of local authorities to franchise bus services. However, I expressed concern at Second Reading that the audit and scrutiny of proposed franchises needed to be tightened up, and I remain of that view.

I also said at Second Reading that the Cities and Local Government Devolution Bill required substantial amendment to improve the effectiveness of audit and scrutiny to ensure public confidence in the financial robustness of franchising arrangements. Now, as the noble Baroness, Lady Scott of Needham Market, has pointed out, on Friday the Public Accounts Committee in its sixth report of this Session expressed some serious concerns about the extent to which consideration by central government of the local scrutiny arrangements had been adequate.

I quote, in particular, from its summary, which states:

“There has been insufficient consideration by central government of local scrutiny arrangements, of accountability to the taxpayer and of the capacity and capability needs of local and central government as a result of devolution”.

I have absolutely no doubt that local government may have the required capacity and capability—certainly in a number of places with which I am familiar. That is not to say that it cannot gain the capacity and capability to undertake successful franchising. However, I subscribe to the view that there has been insufficient consideration of this issue by central government and it really does matter.

In consideration of previous amendments, I noted that the Minister said that mayoral combined authorities were appropriate for taking forward the policies in this Bill and would have the necessary checks and balances in place. These amendments improve the checks and balances that the Government seek. If the Government listen very carefully to what is being said across your Lordships’ House, it is much more likely that franchising will succeed, and I am very keen that it should do so.

There are three amendments in this group. The one to which my name is attached tries simply to make it clear that the auditor should be independent of a local authority or a combination of local authorities. The other two amendments are in the same area, but address issues around affordability, value for money and the role of traffic commissioners. There are various ways in which that could be progressed. The Minister may say that this can all be addressed in regulation. However that is done, I hope that the Minister will be able to come back on Report—if he is not able to do so now—to explain that there is an understanding of the issue that the auditors’ scrutiny function in this case must be robust and seen to be robust and how the Government plan to take this forward to ensure that the public can have confidence in franchising arrangements.

Lord Berkeley (Labour)

My Lords, on the amendments that we have discussed in Committee, many noble Lords have said how important it is for devolution to happen and for local authorities around the country to be able to operate franchises without too many controls from central government. Whether that happens or not, the importance of independence in the audit is vital, as other noble Lords have said. It would be so easy for some local authorities in the future to get it wrong and then for a rather nasty article to appear in Private Eye, suggesting that the leader’s brother-in-law was the auditor. I am sure that would never happen, but we do need independent checks. My noble friend Lord Snape’s suggestion of traffic commissioners appointing the auditor has enormous merit. The two issues in Amendment 42 in the name of the noble Lord, Lord Bradley, and myself, about the affordability of the scheme and whether it represents value for money, are the two most important ones that should be focused on by the auditor. Then we would all feel comfortable that it would probably work very well.

Baroness Jones of Whitchurch (Labour)

My Lords, we very much support the intent of the first amendment introduced by the noble Baroness, Lady Scott, and of Amendment 42, which was introduced by my noble friend Lord Bradley. It is important that the audit process is properly independent and provides a trustworthy external scrutiny—that makes perfect sense. It also makes perfect sense to ensure that the proposals are properly costed and that we can have confidence that they are affordable.

However, regrettably, we do not feel able to support the amendment of my noble friend, Lord Snape—we seem to be making a habit of that. We believe that his amendment is too specific and restraining and we hope that, on reflection, he will feel able to support Amendments 41 and 42, which we believe would achieve the additional reassurance he seeks and ensure that a fair, independent assessment process takes place. I hope that my noble friend will reconsider and that the Minister will feel able to support the first two amendments.

Lord Snape (Labour)

Before my noble friend sits down—I am sorry that she finds herself unable to support what is, in my view, a well-intentioned and well-meaning amendment—perhaps she can tell us why she objects to the traffic commissioner and why that is too specific. After all, by the very nature of his or her job, the traffic commissioner knows the business inside out and is widely trusted by all sides in the industry. Surely, to have someone like that appointing an auditor is a very sensible way forward.

Lord Berkeley (Labour)

And he is independent, too.

Lord Snape (Labour)

And he is independent, too.

Baroness Jones of Whitchurch (Labour)

Without wishing to get into a dialogue, I think that we felt that as long the role was prescribed to be independent, different authorities will have different arrangements for appointing independent auditors. We do not feel that we need to be that prescriptive in this piece of legislation. I would not go any further than that.

Lord Ahmad of Wimbledon (Conservative)

My Lords, there are a number of amendments in this group, all related to the audit function required as part of the franchising provisions. The noble Baroness, Lady Scott, proposes an amendment to state explicitly that the auditor, whose role is to issue a report to the franchising authority on certain aspects of the assessment of the proposed franchising scheme, must be independent. The noble Lord, Lord Snape, proposes an amendment that would require the auditor to be appointed by a traffic commissioner. The noble Lord, Lord Bradley, proposes an amendment that would require the auditor to consider matters relating to an authority’s consideration of affordability and value for money. I thank all noble Lords for their amendments, and will turn to each one.

Before I go into those details, the noble Baroness rightly talked about the Public Accounts Committee’s report on local scrutiny, and I thank her for bringing that to the Committee’s deliberations. We are of course ensuring that we consider its recommendations very carefully as the Bill moves through Parliament, and we will respond during the course of the Bill.

Turning to the amendments, I recognise the importance of ensuring that decisions to move to a model of franchising are taken on the back of quality information and robust analysis. As I have explained previously, in developing this Bill we have been keen to move away from the quality contract scheme processes set out in the Transport Act 2000, which, in particular, included the need for independent scrutiny by a “Quality Contract Scheme Board”. While I agree entirely that there is a need for a level of independent assurance, I do not think that devolved decisions should be second-guessed by an independent panel. We introduced the role of the auditor to ensure that an independent third party provides assurance that certain information used in the assessment is of sufficient quality, that the analysis of that information is robust and that relevant guidance has been followed. It is not the auditor’s role to take a view on the decisions taken by the franchising authority. As I am sure that noble Lords agree, their role is to provide a quality check.

The Bill requires any auditor to have a “recognised professional qualification” and to be eligible to act as the local auditor of the authority’s accounts. As such, we would expect any auditor to be suitably qualified and able to provide independent assurance.

Baroness Randerson (Liberal Democrat)

Does the noble Lord accept that it is not just a case of qualifications but of perceptions? It is only too easy for a situation to arise within a public body where an auditor’s assurance has been given but is not seen as good enough or independent enough by critics of the scheme. Therefore, the arm’s-length rule is the safe way of going forward.

Lord Ahmad of Wimbledon (Conservative)

I agree with the noble Baroness inasmuch as it is important that it is not just the process, but the perception—and the perception in the mind of the public, too—that there is scrutiny, and effective independence in the auditor role. However, I believe that any auditor, on the basis of what we have suggested of having professional capacity, would be able to show that level of competence and, indeed, address the issues of perception. As such, it would be reasonable for the franchising authority to appoint such an auditor. That applies as much to the suggestion by the noble Lord, Lord Snape, that it should be the auditor rather than the traffic commissioner, particularly as it would be the franchising authority that paid for the services of the auditor.

Coming back to the point raised by the noble Baroness and also by the noble Lord, Lord Shipley, I do understand that an auditor could be perceived as more independent if they are appointed by a third party—indeed, the noble Lord, Lord Snape, used the example of a traffic commissioner—or if the Bill specifically stated that they must be independent. However, I would argue, again, that any auditor with an established reputation would be mindful to protect their own role and independence in any report they provided.

On the amendment proposed by the noble Lord, Lord Bradley, it might be worth saying up front that I do not think the amendment as proposed quite addresses his intent, but I understand his concerns in this respect. The audit provisions in the Bill are not intended to replicate the quality contract scheme board process, but the auditor plays an important role both for the authority and for those that will be impacted by the scheme. As I have said before, the auditor will provide a quality check, and will provide assurance to the franchising authority that it has taken account of the guidance in developing its scheme. This provides a helpful check for the authority by assuring it that it has followed the necessary processes and addressed the relevant issues, while also safeguarding the interests of local passengers and bus operators. Again, I reiterate that the decision to move the franchising is the decision of the mayor or local authority alone.

I hope that this discussion has reassured noble Lords that the Bill as drafted ensures that there is a level of independent assurance while not undermining the role of the authority to take relevant decisions. That said, I note that the noble Lord, Lord Shipley, and others, including the noble Baroness, said that the auditor process should be robust and perceived to be robust. I am happy to speak further with noble Lords to understand their concerns more clearly and decide how we can move forward. However, the Government feel that the issues raised by noble Lords have been addressed in the Bill. I hope that the noble Baroness will withdraw the amendment.

Baroness Scott of Needham Market (Liberal Democrat)

I am grateful to all noble Lords who have taken part in the debate on this set of amendments, and to the Minister for his customary care and courtesy. However, I am afraid that I am not entirely reassured, as I think that there is a fundamental misunderstanding about what constitutes being independent. I recognise that you would, of course, go to a reputable firm of auditors. However, the person who sets the contract and pays the bill for the audit retains ultimate control. That is always the way. Anyone who has worked in this area knows that there are all sorts of ways in which the process can be subverted. This is a very important issue and involves great risk for the taxpayer, particularly in these mayoral models, where we know that the oversight of the mayoral function is not as strong as it used to be in the old days when people like me had committees which spent a lot of time going through these things. Given particularly the concerns expressed in the Public Accounts Committee report published on Friday, I think there is a need to return to this question, at least informally.

Lord Ahmad of Wimbledon (Conservative)

The noble Baroness again raises a very valid point. Once we have established our full response to the concerns of the Public Accounts Committee, we will be in a better position. As I said, I welcome further discussions in this respect, because I do not think that we disagree; to use the words of the noble Baroness, Lady Randerson, this is a matter of perception which can be addressed. Once we have responded more formally, I am happy to have those discussions with the noble Baroness.

Baroness Scott of Needham Market (Liberal Democrat)

It is certainly an issue of our time that perception is pretty much everything.

With that, I look forward to future discussions and beg leave to withdraw the amendment.

Amendment 41 withdrawn.

Amendments 42 and 43 not moved.

Lord Whitty (Labour)

My Lords, this is a slightly odd group, although all the amendments in it deal with consultation after a franchising notice has been agreed. The first amendment deals with an issue which the Minister may feel we have flogged to death at early stages, and relates to the engagement of representatives of users of the services. That is referred to in the relevant new paragraph (c), although I agree with the earlier comment of the noble Baroness, Lady Randerson, that the term “as they think fit” somewhat prejudices the possibility of effective consumer representation in this field if the authority is rather resistant to any organisation purporting to represent the users.

The additional point in this amendment is that not only would I expect authorities and operators in the new franchising situation to encourage, engage with and help develop organisations representing users in the area covered by the new franchise, and go on to develop that further during the course of the franchise, but there is also an issue of how—at least in the initial stages—these franchises develop in different parts of the country and how they relate to passenger concerns across the country. Across England we have an organisation—Transport Focus—which is based in statute and has recently enlarged its role in relation to road users of all sorts as a result of the Infrastructure Bill which passed through this House a few months ago. With Highways England it is responsible for looking after all the interests—commercial and individual—of road users; that is, cars, buses, freight, et cetera. It also has a national perspective. In the railway sector it compares the performance of franchises in the different railway franchise areas, and has done so a number of times. It conducts surveys and gathers feedback. There is a crossover of things that are appreciated by passengers in one area into other areas of rail provision. The same must apply in relation to buses. As we are just starting a new system in relation to buses, the first two or three franchises will set the tone for the way in which the system will operate. It will be important for a national passenger organisation to have at least the ability to comment on those developments and on what passengers find good or negative about them and where they would like to see improvements. As the system develops, the franchising system in large parts of England would benefit from having an overall view from Transport Focus on how a new franchise is perceived by passengers using the system.

When setting the franchise, the authorities will wish to look at the way it has operated in areas where they have already established a franchising system. As time goes on, cross-comparison is important. The organisation, already in place, which would give this perspective is Transport Focus. There is no mention of Transport Focus in the Bill. Therefore, I hope that a role is given in the Bill to that organisation in providing a cross-reference of how the system is working for those who ultimately will be the beneficiaries of what I hope will be an improved service. I beg to move.

Baroness Scott of Needham Market (Liberal Democrat)

My Lords, I have four minor amendments in this group and wish to say a word or two about each of them. My Amendment 45 would include the Competition and Markets Authority in the list of consultees. This goes back to a point I made on Second Reading and in the private meeting organised with the Minister from another place.

In the days when I had much more to do with transport, the Competition and Markets Authority writ large across the operation of the bus industry, to the extent that, when I tried to deal with buses in Suffolk, I could not get two operators to sit in the same room with me because they had been told by their lawyers that that could be regarded as collusion and therefore anti-competitive. As noble Lords can imagine, that made trying to run a coherent bus network in Suffolk very difficult. We have dealt with that very effectively now—because we have very few buses. We need to really think about the point at which the Competition and Markets Authority is involved with this. The last thing we want is a very lengthy and expensive process of tendering, consultation and agreement, only to find at that point that the authority has a problem with it.

Amendment 49 tidies up the question of modification. At the moment, it is not at all clear what a modification means. You would not need to re-consult for a relatively minor one, but it is possible to imagine fairly major modifications to a franchising scheme where re-consulting would be a good idea. Amendment 52 comes back to the question of oversight. The Bill mentions “a summary of” the consultations. Given the questions about oversight and robustness, it is really important that we have all the information required. It is not going to be favoured reading among large sectors of the general public, but it is important that those involved in oversight have full information. The same goes for Amendment 53, which is about publishing all the responses so that everyone can see what everyone else has said. That is an important part of good governance and robust oversight.

Earl Attlee (Conservative)

My Lords, it is very difficult to find anything to argue about with these amendments on consultation, particularly Amendment 48. As noble Lords have said, they are very much in the vein of ensuring that all those likely to be affected by either a franchise scheme or enhanced partnership scheme are consulted in a timely fashion and that the documentation—which I am sure will be quite lengthy—will be in accessible formats. It stands to reason that there is no point in consulting if you do not allow adequate time, or provide the material in a way that people can easily access it.

We have already debated similar amendments about passenger representation at an earlier stage. However, I can see one potential problem, which is how long the timescale should be for people to comment. I suspect it is impossible to answer: as human beings we always tend to leave things to the last minute—just look at the mad rush to register to vote in the recent referendum. No matter how much time you give people to do something, it will never be enough. I suspect that, like me, many noble Lords get briefings for Committee on the day it takes place, long after we have drafted our notes and determined our position.

Can my noble friend assure the Committee that there are strict guidelines that public authorities have to follow when it comes to the format et cetera of consultation documents? These amendments may not be necessary—although the point is desirable—and the issues that they seek to address may already be an established and well-known requirement, but it does no harm to reinforce the point.

I turn to Amendment 51. The bus industry was shocked and, quite frankly, appalled when the Chancellor first gave oxygen to the idea of local bus franchising some 18 months ago. Bus operators, from the large plcs to small family-run businesses, feared for their livelihoods. Time has moved on and the industry has, of course, regrouped—dare I even say, calmed down?—and engaged constructively and helpfully with the Government in developing the policy that we now see enshrined in this Bill. I sympathise with all bus operators and recognise their very real concerns. The large plcs have much to lose and need their eyes on market share and their corporate standing. They will be battered and bruised by the franchising process and we must not underestimate the effect this will have. However, small and medium-sized operators are in a different position. As I have already explained, if they lose a franchise, assuming they have the resources to bid in the first place, their business is gone. They will not be able to tread water for a few years and be in a position to bid when the franchise comes up for renewal. Their business will no longer exist, their depots and vehicles will be sold and their staff quite possibly lost to the industry or to competitors.

I know that the plight of SME operators has weighed heavily on the minds of Ministers. More than once I have heard the Secretary of State commend the work of the SME operators and say how he is keen to help protect their enterprises, so this amendment may well find favour with my noble friend. “Fairness” and “level playing field” are terms I hear used frequently in our deliberations and I am in no doubt that I will use them again before we send the Bill on its way. The processes put in place by the Bill must be fair to all operators regardless of their size.

I will raise one other issue, which relates to the wording of the Bill. There are a number of instances where the Bill refers to “small and medium-sized” bus operators. Is that defined in the same way as “SME”, which is recognised economic terminology? Also, what is a small and medium-sized operator? For example, Go-Ahead, one of the big five transport operators, actually has a very small share of the market in Cornwall. Go-Ahead is clearly not an SME but, in that instance, could be said to be a small operator in Cornwall. I apologise if this question comes a bit out of left field and would be happy for the Minister to write to me clarifying the position if he is unable to deal with it immediately this evening.

Baroness Jones of Whitchurch (Labour)

My Lords, I will speak to Amendments 48 and 51 in my name. I very much support the amendment tabled by my noble friend Lord Whitty. Amendment 48 takes a similar position—that as part of the consultation process, passenger organisations and trade union and employee organisations must be involved. We believe that proper time should be allocated to make this a meaningful consultation and an effort made to explain the changes in a clear and accessible form to those who may be affected. As my noble friend said, we have debated these issues in relation to previous amendments and received a positive response from the Minister. I hope a similar response will be forthcoming today.

I hope that Amendment 51 is an area where the noble Earl, Lord Attlee, and I are able to agree for once; I am pleased that some commonality is coming out of this debate. One of the problems with bus provision in this country is that the market is dominated by a small number of large bus operators. This makes the procurement process more difficult for local authorities and does not always result in the best passenger experience. It is difficult for new entrants to enter the sector, even though they often provide more responsive, quality services with high customer satisfaction. Reference has previously been made to the social enterprise company HCT, which runs highly successful services in parts of London, Yorkshire and Bristol. It also has the contract for providing bus services in Jersey. Since it took over that service, passenger usage has increased by 32%, the level of subsidy has reduced by £800,000 a year and customer satisfaction has increased by 5%. Somewhat uniquely, the contract also has a profit-sharing element and it is now giving money back to the local authority.

We need opportunities for innovative providers like HCT to enter the market and win new contracts, but the rules are stacked against them and the regulatory burden is far too onerous for the small providers to navigate. There is a danger that the proposals in the Bill will entrench local monopolies, at best replacing an unresponsive private sector monopoly with a publicly commissioned one. When it comes to enhanced partnerships, we need to be clearer about the process for opening up partnership lists to competition to allow new entrants to join. As it stands, the Bill acknowledges this problem in new Section 123F (1)(i). It requires the consultation document for authorities going down the franchising route to include a statement on how they propose to facilitate the involvement of small and medium-sized operators. We obviously welcome that.

Our amendment takes this one step further and requires the consultation document to consider how the franchise could be divided into smaller units. This would help to break down the local monopolies and encourage new entrants into the market. I hope the Minister understands and shares these objectives: I look forward to hearing his response.

Lord Ahmad of Wimbledon (Conservative)

My Lords, this group contains a number of amendments to the consultation process that a franchising authority must complete before it can implement a franchising scheme. Before going any further, my noble friend Lord Attlee asked about “small and medium-sized operators” and whether in the context of the Bill that meant small and medium-sized companies. The short answer is yes. It is judged by the size of the company rather than the nature of its operation. In the interests of clarity, which is always important, I will write to him formally in that respect.

Turning to the amendments which relate to the persons or bodies to be consulted and the form the consultation should take, Amendment 44, in the name of the noble Lord, Lord Whitty, would require franchising authorities to consult Transport Focus when consulting on their proposed franchising schemes. Once again, I am delighted to say that I agree with the noble Lord that it is important that organisations that represent passenger needs have an opportunity to respond to a consultation on a proposed franchising scheme. Transport Focus already works closely with local authorities and bus operators with a view to securing improvements to bus services for passengers, and I will consider how best to ensure that the Bill gives Transport Focus an opportunity to express views on franchising scheme proposals. I hope that this provides assurance to the noble Lord, Lord Whitty, in that respect.

Amendment 45, in the name of the noble Baroness, Lady Scott, would require franchising authorities to consult the Competition and Markets Authority on their proposed franchising schemes. As I said at Second Reading, competition does not disappear when franchising is introduced; it merely moves from “on the road”, where bus operators compete at bus stops for passengers, to “off the road”, where bus operators compete for contracts to operate services. Franchising authorities will be able to design a franchising system which suits their local area and local needs, whether that be through gross-cost or net-cost contracts, or with large or small bundles of routes, bearing in mind the need to involve small and medium-sized bus operators.

However, I agree that any fundamental change to the bus market that is being considered by a local area should take account of the potential effects on competition and the benefits or impacts this could have for bus operators and local people. I further agree that it may be helpful for franchising authorities to work with the Competition and Markets Authority as they develop their proposals, and for the authority to be consulted. I hope I have reassured the noble Baroness that I am with her in ensuring that we look at how to fit that into the Bill.

Amendment 48, in the name of the noble Baroness, Lady Jones, would add some additional requirements to the consultation provisions in relation to franchising, including requiring passenger interest groups to be consulted on franchising proposals. I thank the noble Baroness for her amendment, and agree that it is vital that passenger groups and others that may be affected are consulted fully on proposals to improve local bus services. I recognise that many noble Lords spoke about passenger representation and accessibility of bus services at Second Reading and in earlier Committee debates, and I fully understand that there is a wide spectrum of views and needs to be considered when planning local bus services.

The franchising provisions already include requirements for the authority to consult organisations that represent users of local bus services. Therefore, I encourage any authorities thinking of using the new tools in the Bill to engage fully with interested parties as proposals are developed. I hope this goes some way to addressing the noble Baroness’s concerns about the interests of passenger groups and reassures her that the Bill requires authorities to consult fully with those groups on franchising proposals.

Turning to the form that consultations on franchising and enhanced partnership proposals should take, the noble Baroness, Lady Jones, raised an important issue about accessibility and the need for consultations to be conducted in a manner and over a time period that is accessible to all. I agree that any consultation must give local people due time to consider and respond, particularly as proposals about local bus services are likely to have a large impact on local communities. I will therefore give further consideration to how best to ensure that consultation exercises relating to franchising proposals are accessible to all.

Turning to the amendments on the consultation materials that franchising authorities must prepare, Amendment 51, in the name of the noble Lord, Lord Kennedy, would reinforce the need for authorities considering franchising to give due consideration to small and medium-sized operators, given the important role they play in the delivery of local bus services. I sympathise with the aims of the amendment and I think we can all agree that small and medium-sized bus operators across the country deliver vital services to our local communities. Many of these smaller operators deliver tailored and bespoke services to suit local needs, and we want to see these small businesses continue to thrive, regardless of the model of bus service delivery that is employed.

The Bill requires franchising authorities, both as part of their consultation exercise and in issuing their response to that consultation, to set out how, in conducting the procurement process, they intend to facilitate the involvement of small and medium-sized operators in the provision of local bus services once franchising has been introduced. I agree entirely with the principle in the amendment that in reality, this provision will require the authority to consider in practical terms how it intends to facilitate the involvement of small and medium-sized operators, which may well include the division of local service contracts into smaller lots. However, there may be other ways to achieve that aim—for example, through subcontracting—and I do not want to prejudge the procurement strategy that an authority may employ. I hope I have reassured noble Lords that the Government are committed to ensuring that small and medium-sized operators continue to have a place in the market regardless of the model of delivery, and that the provisions in the Bill already address this issue.

Amendment 52, in the name of the noble Baroness, Lady Scott, would require franchising authorities to include in their consultation document their assessment of their proposed franchising scheme, conducted under new Section 123B, rather than a summary of their assessment. I hope I can reassure the noble Baroness that franchising authorities are already required to publish their assessment of their proposed scheme. The Bill also requires that a summary of the assessment of the proposed franchising scheme should be included in the consultation document itself, with the aim of ensuring that the consultation document contains sufficient information for the lay person to consider, without necessarily having to refer to the full assessment. I hope the noble Baroness agrees that these proposals are sensible and that the Bill as drafted already achieves her aims.

Amendment 53 would require franchising authorities to publish all the responses to their consultation on their proposed franchising scheme. I agree that it is important for those reading the response to the consultation to be informed of the views that have been expressed in responses to that consultation. I fully expect any authority to set out in its response to the consultation the views expressed by those consulted, subject to any disclosure issues, and the authority’s response to those views.

However, I do not want to be too prescriptive about how the authority should respond to the consultation and the exact form the response should take. For example, the authority may receive many responses on the same issue and may choose to summarise those responses and list the number of responses received. Again, that is common practice in local government. But I will consider how best to ensure that franchising authorities set out a summary of the responses they receive to their consultation, and hope that I have reassured the noble Baroness in this respect.

Government Amendment 50 removes the requirement for the franchising consultation document to include a description of how it is proposed persons are to be invited to tender for the provision of services. The Government believe that it is proper to remove this reference as the Bill does not make provisions anywhere else as to how the procurement process will work. This will be a decision of the authorities involved, in the context of procurement law, and guidance will be provided on procurement approaches.

Finally, Amendment 49, also in the name of the noble Baroness, Lady Scott, would require franchising authorities to have an auditor reassess their proposed franchising scheme if it is modified following consultation. I sympathise with the aims of this amendment, and agree it is vital that franchising authorities have the assurance of an auditor in relation to certain aspects of their assessment. We have already spoken about the audit function at length today so I do not want to go into further detail. I have agreed to sit down with noble Lords to discuss this further.

The section of the Bill to which the noble Baroness refers ensures that authorities are able to take account of the views expressed in the consultation and modify their franchising scheme appropriately. I also expect authorities to use their good sense and judgment. If the consultation unearths new data or causes the authority to radically rethink its approach, then of course I would expect the authority to take a view on whether it should choose to seek the auditor’s opinion on the new data or the revised analysis, and whether it should consult again on the revised scheme. I do not, however, want to force authorities to go through these processes again when a franchising scheme is modified. It may be that an authority makes a small tweak to its proposed scheme which does not materially affect it, when it would seem unreasonable for the authority to have another assessment by the auditor.

Again, this is an issue we can look at. I am mindful that different circumstances may arise, so we should look to address this in the guidance that is going to be issued, but I reiterate my view that the authority involved must take a sensible decision based on the particular modifications it proposes making. Several issues have been discussed and I hope I have demonstrated again that the Government are seeking to listen and to take on board practical, sensible suggestions that noble Lords are putting forward, because this is about strengthening bus provision at a local level. I hope my comments have reassured noble Lords and that they feel minded to withdraw their amendments.

Lord Whitty (Labour)

My Lords, I congratulate the Department for Transport on being so forthcoming on this group of amendments, both mine and those of other noble Lords. In opposition and in government I have found previous manifestations of the Department for Transport to be slightly more resistant to the good sense of amendments put forward in this House. I am glad that a culture change seems to have taken place, epitomised in the Minister. Of course, the Bill does have a further, Report stage, when I certainly hope we will have amendments reflecting at least some of the positions taken in this group. The noble Lord agreed the other night on the one part of my noble friend’s amendment he did not refer to—on trade unions and employee representatives. He has already committed on that front so I hope that, before Report, we will see many of the principles embodied in the amendments in this group in government amendments. If not, I shall be disappointed but at the moment I am feeling pretty pleased with the department.

My point about Transport Focus being referred to in the Bill is an important and newish one, and I am very glad that the Minister responded positively to it. I thank him and the department—keep up the good work. In the meantime, I beg leave to withdraw the amendment.

Amendment 44 withdrawn.

Amendments 45 to 49 not moved.

Viscount Younger of Leckie (Conservative)

My Lords, I will speak to a group of amendments to Clause 4 and Schedule 2. Amendments 54 to 64 and Amendment 75 relate to the period which must expire before services can be provided under local service contracts. The Bill as introduced provides that at least six months must expire between a contract being awarded and provision of the relevant service, with the aim of providing a suitable period of transition for bus operators. These amendments do not change the policy but merely tidy up the Bill to ensure that this provision is clear.

Amendment 65 makes it clear that where a franchising scheme is varied to add an area which relates to another local authority, that authority must play an active part in the variation processes. This corrects the drafting of the Bill but does not change the policy intention. It has always been the Government’s intention that authorities that will have a franchising scheme covering the whole or part of their combined area should play a part in making or varying the scheme.

Amendment 76 amends the Local Transport Act 2008 to remove provisions relating to quality contract schemes for areas in England which were inserted into the Transport Act 2000. My noble friend Lord Ahmad wrote to noble Lords on 16 June providing notice of the government amendments he would be bringing forward in Committee. That note provides a fuller explanation of the precise changes to the Bill. My noble friend and I are of course happy to discuss these amendments further with colleagues if there are any concerns. I beg to move Amendment 54.

Lord Kennedy of Southwark (Labour)

My Lords, I have no problem with the amendment but I want some further clarification. As I said in our previous discussion on our first day in Committee, we have a whole raft of government amendments and I do not understand why this issue was not sorted out before the Bill came to your Lordships’ House. Yes, the amendment adds the word “minimum”—Amendment 55 is similar—but these are tidying-up amendments and we are at the start of the Bill, not the end. It has been nowhere other than with the department and in this House. I am sure that the noble Lord listens to what all noble Lords say in this House, but it seems that a bit more work should have been done with Ministers before the Bill ever appeared here. Why we are getting these Bills so early, and why was this issue not sorted out before the Bill arrived here?

Viscount Younger of Leckie (Conservative)

That is a very reasonable comment. My noble friend Lord Ahmad was asked a similar question during consideration of a previous amendment, and I recall his answer. I will give the same answer, which I hope will be accepted: this Bill has been work in progress. A lot of the time, Bills are not absolutely perfect when they are presented. I will be quite open and honest in saying that it is simply a tidying-up process. I hope the noble Lord will accept that explanation.

Lord Kennedy of Southwark (Labour)

I accept that it is a tidying-up exercise, but my point is that I am surprised that this could not have been sorted out in advance, given that, as we have heard, this Bill has been a long time coming and in preparation in the department. These are not major issues that have been found during our debates: it is just a question of missing words, for example. I could go through the whole raft of government amendments—none is anything major. So I do not understand why we are finding within a matter of days that odd words and phrases that should have been included in the first place are missing from a Bill that, we are told, has been months in preparation, and was due last year.

Viscount Younger of Leckie (Conservative)

I am not sure that my follow-up is going to give any further clarity. I simply point out that the Bill as introduced was not sufficiently clear on these points, and these amendments help to bring clarity. It is more fine-tuning and tweaking than anything particularly major.

Lord Kennedy of Southwark (Labour)

That is fine. I will not pursue the point further, but for the Minister to come to the Dispatch Box and say that the Bill was not sufficiently clear, when it has been at least months in preparation, is not the best way to introduce legislation. I will leave it there.

Amendment 54 agreed.

Amendment 54A not moved.

Baroness Jones of Whitchurch (Labour)

My Lords, Amendments 58A and 99ZA call upon commissioners of bus services under franchise, and those developing enhanced partnership schemes, to apply the principles of the social value Act 2012 in specifying the service required.

The social value Act, brought in by this Government, recognises that many public services can have a wider role than a simple cost-benefit analysis would identify. It requires those procuring services to consider the economic, social and environmental benefits of each bid. It allows local authorities to think about public services in a more coherent way with wider benefits and encourages those bidding for contracts to be more imaginative about the community benefits their service could bring. Often this can result in better-designed services, with other benefits and efficiencies.

In the case of bus services, it could include, for example, a commitment to train and employ a number of long-term unemployed people to work on a contract. It could include a number of apprenticeships and work experience places for young people. It could include a commitment to support an existing community bus service—perhaps with some shared facilities. It could include an environmental plan with targets for green energy and reduced CO2.

These are just examples, but the point of social value is to encourage providers to commit to their own added-value measures without costing any more money. It is essentially supplier neutral, in that it can apply to all operators, whether commercial, social enterprise or municipal. It allows local authorities to be as specific as they choose—either specifying the expected wider benefits at the outset of the bidding scheme or encouraging bids to offer up more creative service solutions at a later stage of the process.

Implementing the social value Act would appear to be an excellent tool for achieving many of the community benefits which we have been seeking in other amendments to the Bill so far. I am sure the Minister is aware that the operation of the social value Act was reviewed last year by the noble Lord, Lord Young. He concluded that, where it was used effectively, it resulted in commissioners being much more innovative and delivering much more responsive public services. However, the noble Lord also concluded that the opportunities and advantages were simply not widely enough understood and therefore take-up of the model was low.

This is the Minister’s opportunity to put this matter right by embracing this model as it applies to bus services in the future and putting social value at the heart of the Bill. I beg to move.

Baroness Scott of Needham Market (Liberal Democrat)

My Lords, I am very pleased to see that the noble Baroness has tabled this amendment. I raised the question of the social value Act in a group of amendments when the Committee met last week. In doing so, I was trying to get at the point that the noble Baroness has made, which is really about extending the ambition of the Bill in terms of understanding the broader context, whether it is environmental or social. Because the inspiration of using the social value Act only came to me very late in the day, when it was too late to table an amendment, I raised it in debate rather than tabling an amendment. I am pleased to see that the noble Baroness has rather more ingenuity than I have and has found another place in which to put it.

Lord Berkeley (Labour)

My Lords, I support this amendment, and will also speak to the others in the group—Amendments 58B, 99ZA and 99B. The noble Baroness, Lady Scott, hit the nail on the head when she talked about extended ambitions, and my noble friend Lady Jones gave a really inspirational description of what one might be looking for. All these amendments basically cover the same thing, which is to do with creativity. When people are looking at whether it is right to have a franchise, partnerships or whatever, I hope that the Government will, through these amendments or something similar, realise the benefits from bidders having more freedom to be creative—whether in terms of different types of bus, different types of service, frequency and timetables, fitting in with other services such as railways or opening times for hospitals and doctors’ surgeries, and things like that.

Amendments 58B and 99B mention,

“functions as an education authority”,

and,

“functions in respect of social services”.

In my little village in Cornwall, there is a bus that goes every morning to take people to the big school in the big town, which goes at much the same time as the little bus which takes people to the station, the supermarket or anywhere else. One has to ask why they are not combined. At the moment they have different budgets, and one is run by the private sector and the other is organised by the local authority. You could go a bit further and add river ferry services in little places like that.

The same applies to social services. This would need a great deal of flexibility: they will not all need a double-decker bus, but they might need a minibus or even a taxi. But if the information was there, there would be an enormous benefit. Small local communities, especially in the countryside, would actually realise that it was their bus and might even be able to have input into when the small ones go, on occasions. We now have the ability to do that with integrated ticketing, which we discussed on the first day of Committee. However, it is not just ticketing; people want information. Even people who might be getting a little old and are not always capable of understanding too many things about modern computers might well be able to find something which gives them the information they need about when the service might go and to get the message that it will be going. Going to hospital can be not only difficult and time-consuming for people, especially in the outlying places, but quite traumatic sometimes. With something like this, having everything bundled together—the school bus, social services and general transport—would be an enormous step forward.

How would this happen? The local authority if it is allowed to, or the mayor if there is a mayor, should be able to co-ordinate all these things. In Cornwall, they have got agreement with the Government to integrate social services with hospital funding, and I hope it extends to transport, which, in a long thin county, is extremely difficult. Those kind of things will bring benefits, and the feeling is certainly there that this can probably be done without any subsidy. If it is done properly, one thing that might just happen is that they will get more passengers and more revenue. It will be early days, and there may need to be some seed-corn money to start it off, but if we can get out of having every little service in a different box and never talking to each other, there could be real benefits and progress.

I am sure the Minister will say none of the four amendments in this group is perfect, but if he believes that the intent is worth pursuing, then I am sure there are discussions to be had and new drafting to be done to turn this into a reality. I very much hope that he will agree to that.

Earl Attlee (Conservative)

My Lords, I am sure that these are sensible and valuable amendments for the Committee to consider. However, they are “Supplementary to the Second Marshalled List”. That means that they must have been tabled on Friday, which means that there is no time for officials to consider a response for the Minister and no time for the Minister to consider the advice of officials. It is a little bit rich for the Opposition Front Bench to tease the Ministers for tabling their late government amendments when it tabled its amendments on Friday.

Lord Kennedy of Southwark (Labour)

The point I was making was the government amendments that were tabled seemed to be making little drafting corrections, inserting odd words. For a Bill that has been in the planning for nearly a year, that seems to me to be remiss.

Lord Judd (Labour)

My Lords, late or not, one has to look at the potential and the value of the particular amendment. I am greatly cheered by this amendment. It seems to me that we are in danger of totally losing sight of the ideal of community and the rest. A well co-ordinated, integrated bus service can play a tremendous part in furthering community activity. We just compound the problem of our individualistic society in which community is breaking down because people resort to their cars, go and do their shopping, go back home and watch the television, put on their computer or whatever it is. The fact is that, if we are to have a life worth living, we have got to have community. The bus can potentially be central to that community. I applaud the amendment.

Lord Bradley (Labour)

My Lords, very briefly, I also strongly support these amendments—late or not. We hear under the devolution deal a lot about the integration of health and social care and the integration of physical and mental health. Part of that is the integration of the transport system to enable people, particularly in the conurbations and city of Manchester—a poor and often elderly population who rely exclusively on public transport. We are developing a very effective integrated public transport system—buses, light rail, heavy rail—but we need to ensure that it benefits all the communities across Greater Manchester. This amendment enables that consideration effectively to be brought to the table to ensure that we have the best services possible to meet the real needs of local people.

Lord Ahmad of Wimbledon (Conservative)

My Lords, just to pick up on a couple of points, whenever you see something that can be improved, at whatever time, improve it. It is as simple as that, and better early than late, as long as time lines are met. We have heard about the inspiration of the noble Baroness, Lady Scott, and the ingenuity of the noble Baroness, Lady Jones. Indeed, this issue came up during the previous discussion. I am not sure whether the noble Baronesses received my letter in that respect—

Baroness Scott of Needham Market (Liberal Democrat)

Yes, I received a letter on the questions about rural public transport, which I raised at Second Reading, and a positive response on this issue. I did not mention it because I thought I would leave the noble Lord to take the glory.

Lord Berkeley (Labour)

I received a lovely letter from the Minister, but only this morning.

Lord Ahmad of Wimbledon (Conservative)

As long as it was lovely, that is the important point to bear in mind. I thank all noble Lords, particularly the noble Baroness, Lady Jones, and the noble Lord, Lord Berkeley, for tabling their amendments, and acknowledge the noble Baroness, Lady Scott, for bringing this issue to the fore. The amendments aim to ensure that authorities think about the wider social, economic and environmental benefits of establishing a franchising or enhanced partnership scheme and remind authorities of their obligations relating to educational and socially necessary bus services.

Amendments 58A and 99ZA, tabled by the noble Baroness refer to the Public Services (Social Value) Act 2012, which the noble Baroness, Lady Scott of Needham Market, mentioned in a previous committee debate. As I have already indicated, and as the noble Baroness has acknowledged, I have written to her on this matter. My understanding is that the Public Services (Social Value) Act 2012 requires authorities which commission certain public services to think about matters relating to securing wider social, economic and environmental benefits in the context of procurement.

I believe that it would be useful to use the guidance that will accompany the Bus Services Bill to remind local authorities of the duty that the Public Services (Social Value) 2012 places on them in certain circumstances and to give some guidance on the approach to be taken in relation to procurement activities not covered by the Act. I assure noble Lords that, on the contribution of the noble Baroness, I immediately set the ball in motion. Work is in hand in the Department for Transport to consider how best we achieve this and it is getting some accolades. The noble Lord, Lord Whitty, is not in his place, but it is becoming a fast favourite of the noble Lord.

I also agree that any authority looking to establish a franchising scheme or an enhanced partnership scheme should think carefully about the wider social, economic and environmental benefits that such a scheme could bring. The Bill includes requirements for authorities looking to establish a franchising scheme or an enhanced partnership to think about whether the proposed scheme would contribute to the achievement of relevant policies and to consider the impacts of such a scheme. I hope this has reassured noble Lords that the social, environmental and economic issues will be considered as schemes are developed and that references will be made quite specifically in the guidance that accompanies the Bill to ensure authorities are aware of their obligations under the Public Services (Social Values) Act 2012.

Amendments 58B and 99B, tabled by the noble Lord, Lord Berkeley, relate to educational and socially necessary services. Authorities have certain duties to consider whether to provide socially necessary services, and they also have certain duties with respect to providing home-to-school transport. I agree entirely that authorities should consider these obligations as they develop franchising or enhanced partnership schemes as co-ordinated commissioning of public transport for the whole area can lead to real efficiencies. This is one of the core principles of total transport, and I support it wholeheartedly.

The obligations on local authorities with respect to socially necessary and home-to-school services remain in place regardless of whether franchising, enhanced partnerships, or any other model is employed and I do not think it is necessary to restate these requirements in the Bill. I do however recognise that we can continue to do more to ensure that authorities are reminded of their obligations through the guidance that I have mentioned already.

The other issue raised by the noble Lord’s amendment is that of an authority subsidising certain services which would not otherwise be provided. Authorities already have the ability to do this, and the Bill does not change that. I fully expect that authorities will subsidise certain services in a franchised model for example and confirm that this will be possible under any of the new models proposed through the Bill. The noble Lord, Lord Berkeley, talked about ferries. There is nothing to stop local authorities working with local operators to integrate ferries locally. Merseytravel’s multi-operator ticket already does this. It is unlikely that including a reference to ferries and the 2012 Act in this Bill would fall within the permitted scope, but I will consider the point and will write to the noble Lord if I am not correct in this respect. I hope that the assurances I have given have gone some way to addressing the issues that noble Lords have raised and that the noble Baroness will withdraw the amendment.

Lord Kennedy of Southwark (Labour)

I know the Minister is trying to be very helpful today and we are very grateful to him for that. He has asked my noble friend Lady Jones of Whitchurch to withdraw the amendment. Is he saying that he is going to go away and think about this? I am not clear whether he said that. The amendment that my noble friend moved is important. I am not quite clear what he is saying in asking her to withdraw the amendment.

Lord Ahmad of Wimbledon (Conservative)

In the interests of time, if the noble Baroness, Lady Scott, does not mind I shall share the letter I wrote to her with all noble Lords. That should have been done as a matter of course. It will perhaps highlight the Government’s position, but to be clear, the Government are considering the provisions raised in the amendment, but within the guidance which will be in support of the Bill.

Lord Kennedy of Southwark (Labour)

I think I got the letter, but I am afraid I not have actually read it yet. It arrived this morning in my email inbox. I just wanted to be clear what the Minister meant.

Lord Berkeley (Labour)

On that point, has the Minister told the Committee when the guidance might be published in draft form? Will we be able to see it before Report, for example?

Lord Kennedy of Southwark (Labour)

Apparently I did not get the letter after all. I certainly got a letter from the Minister this morning, but it may not be the one that we are talking about.

Lord Ahmad of Wimbledon (Conservative)

As I have reflected on before, while we are in the holy month of Ramadan, noble Lords should be thankful that they are not getting emails from me because they would be arriving at about 3 am. If I am writing them, I hope noble Lords are reading them. I will of course confirm when the guidance is due to be published, but I hope I have provided clarity and that the noble Baroness will withdraw her amendment.

Baroness Jones of Whitchurch (Labour)

I think the Minister for his response and I thank all noble Lords who contributed. For a little while there, we had a sense of what is possible in the Bill. If we were not careful, we were going to get bogged down in the technical detail of franchising but, as my noble friend Lord Judd said, it is about building community and using the real advantages that you get with a Bill like this that comes along only once every 20 or 30 years. This is a chance to build in that ambition and to have some excitement about the possibility that bus services can provide in terms of community assets. We have had a glimmer today of some of those opportunities.

My noble friend Lord Berkeley showed not only that you can have some innovation and excitement but that you can actually save money by pooling all those services. It seems foolish that social services pay for one set of transport while education pays for another, and no one ever thinks that they could pull that together into one complicated yet coherent grid.

I am pleased that the Minister spoke positively in response. I am slightly sad that he thinks this should go in guidance. I know we debate this over and over again, but guidance does not have the same weight as legislation. From our perspective, the social value Act is worth specifying in the Bill because it brings very specific requirements. I look forward to receiving the letter, when it eventually comes to us, but we need to explore how much more we can enforce this within the Bill rather than leaving it within the guidance. Perhaps that can be part of the wider discussion for us to have outside. In the meantime, I beg leave to withdraw the amendment.

Amendment 58A withdrawn.

Amendment 58B not moved.

House resumed. Committee to begin again not before 8.32 pm.

Earl Attlee (Conservative)

My Lords, I shall also speak to my Amendment 60. My two amendments would make a rather significant change to new Section 123I of the Transport Act 2000: they would prevent a franchising authority from revisiting a failed franchise proposal for a period of five years.

One of the things that any business dreads is uncertainty. Consider the current situation in the UK: it adversely affects investment plans, recruitment decisions and the conduct of everyday activities. Bus operators are understandably concerned that through the measures in the Bill they could find their businesses under threat and, in the worst-case scenario, eliminated.

I will avoid rehearsing the arguments against franchising. My amendments seek to ensure that if a franchise proposal fails, for whatever reason, or if the franchising authority decides not to progress its plans—again, for whatever reason—the franchising authority must wait for five years before revisiting the issue and seeking to bring forward a new scheme. I am not necessarily wedded to the five-year period but the point I am making is that there must be a sensible gap before the process can start again, and five years seemed as appropriate a period as any other, particularly when the kind of investment decisions and long-term planning that transport providers make is taken into account. Most authorities do not change their political complexion very regularly but, in those areas that do, it is important that bus operators’ commercial decisions are not adversely affected.

The amendments would give some certainty to bus operators, and would allow them to continue to develop and improve their services, invest in new technology, innovate and react to changing and growing passenger needs. While quality contracts have been possible for the best part of 16 years, the process for bringing forward a franchise will be less onerous, and we know that these powers could be used as soon as they are brought into operation. So the threat would be very real and would be a constant dark cloud hovering above operators’ heads, even if a proposal had just been found to be unviable.

It may also be that authorities in scope might secretly welcome the amendments. The burden on local authorities grows and they are under huge pressure to deliver an enormous range of local services, from bin collection to care for the elderly to keeping the street lights on, with ever-dwindling financial resources. Having spent considerable time, energy and money on a franchise scheme that in the end was not progressed, authorities may value a legal reason that they can offer for why they cannot revisit the issue despite pressure to do so. I beg to move.

Lord Bradley (Labour)

I rise to speak to Amendment 61A in my name and to Amendment 66 in my name and that of my noble friend Lord Berkeley. On Amendment 61A, although the franchising authority should seek to enforce breaches of registration requirements by reference to the traffic commissioner, there are circumstances where that will not provide a swift, effective remedy. The right to request a court to exercise its discretion to grant an injunction is a more appropriate and proportionate measure for use in urgent cases to prevent serious breaches of the registration requirements.

The amendment is based on a similar provision in the Town and Country Planning Act 1990. A reference to the traffic commissioner would result in an investigation, followed by the possible imposition of sanctions, including a financial penalty and compensation. However, the process might require weeks to complete, during which an operator could continue to run services in breach of the registration requirements. The ability to apply for injunctive relief would allow the franchising authority to safeguard the franchise scheme in critical circumstances. It is anticipated that it would be used only in rare and specific circumstances, but it would give the franchise extra protection.

The purpose of Amendment 66 is to ensure that the franchising authority should not be obliged to issue a service permit where it would have an adverse effect on the financial and economic viability of the wider bus franchising scheme. It should not have to provide one if, for example, it would adversely affect tram, light rail or heavy rail services within the area. The service permit regime in the Bill is the way in which, first, cross-boundary services can be provided—in other words, services that go in and out of a franchised area—and, secondly, services can be provided where no service has been provided for in the franchise contract. The franchising authority has to grant permission for such permits, but the Bill prevents operators using these provisions to cherry pick and, in doing so, to undermine the wider franchise by enabling the franchise authority to refuse a permit where it would have an adverse effect on any service provided in the franchise.

Amendment 66 would extend the safeguard explicitly to include consideration of any impacts on the wider economic and financial viability of the bus franchise scheme. It would also enable consideration of wider public transport services. There would otherwise be a loophole whereby an operator could undermine other forms of public transport by, for example, running a bus service in parallel with and in competition with a bus rapid transit system or a light rail system, both of which currently operate within the Greater Manchester footprint. This could undermine the wider integrated public transport network, of which the bus franchise forms a part, by undermining its economic position and its fully integrated nature. I look forward to hearing the Minister’s views on these points.

Baroness Randerson (Liberal Democrat)

My Lords, my Amendment 67 raises in relation to bus users the same issue of principle that was raised earlier. Before I briefly explain in detail, may I take this opportunity to thank the Minister for the assurances he gave earlier today? We are very grateful to him for the progress we have made on this issue.

In the case of franchising, before an authority publishes or withdraws a franchising notice, the Bill specifies that, quite reasonably, it has to consult

“persons operating local services in the area to which the scheme relates”.

According to the Bill, it also has to consult,

“other persons whom, in their opinion, it would be appropriate to consult”.

What is wrong with saying that it is right to consult bus users? It is obviously right to consult bus operators and it is clearly right to consult bus users. Greater prominence and guarantees simply must be given to the views of bus users, whether they choose to make their views known either locally, through small and informal groups, or nationally—for example, through Transport Focus. I urge the Minister to encompass this amendment with the other amendments which relate to bus users.

Lord Berkeley (Labour)

My Lords, I will be brief. I support the amendments in the names of my noble friend Lord Bradley and the noble Baroness in this grouping. The noble Earl, Lord Attlee, has a point about why franchises should be postponed or cancelled. It brings to mind the situation in which a franchise is advertised and several companies respond, spending quite a lot of money in the process. If it is then cancelled for no particular reason, they could probably reasonably ask for their tendering costs to be reimbursed, although that will probably never happen. However, it behoves the franchising authority to produce a franchising document against which companies will bid, and if nobody bids, it will not have achieved anything. Therefore it is not all one-way. My gut feeling is that if it makes a mess of it and then issues it again within six months or so, that is much too short a time, but on the other hand five years is too long. The noble Earl, Lord Attlee, made some good points in his amendments, but I would reduce the time to two years or so, which is a more reasonable time in which to do this.

Baroness Jones of Whitchurch (Labour)

My Lords, I will first speak to Amendments 59 and 60 in the name of the noble Earl, Lord Attlee, which specify that any decision to postpone or cancel a franchising scheme cannot be revisited for five years.

There are many legitimate reasons why these decisions are postponed, and we believe that there is a danger that this amendment would have the converse effect of forcing imperfect schemes to proceed, to avoid the five-year moratorium. On the other hand, we believe that there are enough checks and balances in the Bill to allow decision-makers to reflect and rethink their proposals, so a ban for five years on revisiting the option is unnecessary and we would not support it.

Amendment 66 in the name of my noble friend Lord Bradley seems to provide a safety net for franchise providers to ensure that service permits which are issued do not undermine the viability of franchise schemes as a whole. This seems sensible, so we support the amendment.

Finally, we support the concept in Amendment 67 that any franchise service permit issued should first be subject to consultation, not only with the service providers but with the service users. This theme has run through a number of our amendments and we support it in this context. I therefore hope the noble Lord will agree with the sense of that amendment.

Lord Ahmad of Wimbledon (Conservative)

My Lords, I thank all noble Lords who have taken part in this debate. I will take each amendment in turn, beginning with Amendments 59 and 60.

Amendment 59 would enable franchising authorities to cancel the date on which local service contracts may first be entered into for a franchising area or sub-area. I admit to being unclear as to the purpose of this amendment and would welcome further clarification from my noble friend. The amendment that my noble friend proposes is to the section in the Bill which enables franchising authorities to postpone the date on which local service contracts can first be entered into, for example to deal with a situation in which the procurement exercise takes longer than anticipated.

The Bill already provides for revocation of a franchising scheme where the franchising authority thinks that local services are likely to be better if the scheme did not apply, where the continued operation of the scheme is likely to cause financial difficulties for the authority or where the burdens of continuing the scheme outweigh the benefits of doing so. If the ability to revoke a franchising scheme and move back to the deregulated model of bus service delivery is what my noble friend is concerned about, then I can reassure him that the Bill already provides for this.

Amendment 60 would prohibit a franchising authority from reconsidering a franchising scheme for five years from the point at which it decides to cancel a scheme. Moving to a model of franchising is an important decision and one which will have an impact on bus operators, local passengers and the local authority itself. We have developed the Bill with this in mind and included a number of processes which franchising authorities must follow before they can introduce a franchising scheme. The processes are designed to ensure that the proposed scheme is assessed, the relevant parts of the assessment audited and that stakeholders have a chance to respond to a consultation on a proposed scheme before any decision to move to a model of franchising is taken.

I agree that any decision to revoke a scheme is important. I also fully recognise the disruption it would cause to local passengers and the uncertainty caused to bus operators in the area if a scheme were to be revoked only to be followed, a short time later, by the introduction of another scheme. However, I have concerns about the amendment as drafted, particularly as it has been drafted in relation to the section in the Bill which relates to postponing the time at which local service contracts can be entered into. I will consider, however, how best to ensure that the Bill achieves the objective of the amendment.

Amendment 61A, tabled by the noble Lord, Lord Bradley, provides that a franchising authority may apply to the court for an injunction to prevent a person from continuing to operate a service in a franchising area if it is not operating under a local service contract, is not an interim service and is not provided under a service permit. I agree entirely that there must be suitable mechanisms in place to enable authorities to take action against bus operators which should not be operating in franchised areas. That is why we have included provisions in the Bill to enable traffic commissioners to impose sanctions in relation to such operators. These provisions enable traffic commissioners to impose financial penalties and attach conditions to operators’ licences preventing them from running services in certain areas in future.

I recognise the issue the noble Lord raises regarding occasional or event services where the time for a traffic commissioner to act may be limited. However, the traffic commissioners’ powers are wide-ranging and include an ability to impose fines on operators. This is not an issue that I am aware has been raised widely by local transport authorities. If it is likely to be a particular issue in Manchester or any other local area, I would encourage the relevant local transport authorities to discuss with the Office of the Traffic Commissioner whether it would be possible to expedite decisions in particular circumstances.

The noble Lord, Lord Bradley, also raised the issue that bus services operating under service permits could undermine rail services. I note his point about the ambition to deliver integrated bus, tram and rail services. However, I remain concerned that passengers should be given a choice as to how they travel, as it may be, for example, that a bus service is a cheaper option than the tram or train alternative. I hope this discussion has reassured the noble Lord that the Bill as drafted includes sufficient mechanisms to deal with operators which are not authorised to operate in a franchised area.

The noble Lord, Lord Bradley, and the noble Baroness, Lady Randerson, also proposed amendments to the service permit provisions in the Bill. The noble Lord, Lord Bradley, proposes Amendment 66, which would prevent franchising authorities from granting applications for service permits unless they are satisfied that the service proposed would not have an adverse effect on the authority’s ability to afford the franchise scheme. The intention of the service permit provisions is not to enable bus operators with service permits to compete with franchised services on the road. I agree entirely that it would be unreasonable for a franchising authority to be required to grant a service permit to a bus operator who was proposing to run a service that would have an adverse effect on a franchised service. That is why we specifically stated in the Bill that service permits should be granted only where the proposed service will benefit local people and where it will not have an adverse effect on any local service provided under a local service contract. As such, I think that the Bill already achieves many of the aims of the noble Lord’s amendments.

Amendment 67, tabled by the noble Baroness, Lady Randerson, would further reinforce the need for authorities operating a franchising scheme fully to consult passengers on the conditions that may be attached to the operation of certain services running in a franchised area under a service permit. The Bill enables franchising authorities also to attach conditions to service permits, which could include, for example, a condition that required the operator to accept certain tickets or display certain information on services. Before such conditions could be imposed, the franchising authority would have to consult on a notice which set out those conditions and publish that notice. I agree entirely that passengers should have an opportunity to comment on the proposed conditions, as it is possible that they could make services more or less attractive to local people. I will therefore consider how best to ensure that the Bill achieves the objective of the amendment.

I hope that my comments have reassured noble Lords that I understand many of their concerns and that they will therefore choose not to press their amendments.

Earl Attlee (Conservative)

My Lords, I am grateful for all contributions from noble Lords. I said that I was not wedded to the five-year period, but noble Lords may have drafted their comments before they had heard what I had to say. Amendment 59 might be defective, but it was intended as a precursor to Amendment 60. I can understand the concerns of the noble Baroness, Lady Jones, but the five-year period—or whatever period it was—would encourage local authorities considering franchising to make sure that they got it right first time rather than have a half-hearted attempt at it.

I am grateful for the positive response of the Minister both to my amendments and to those from other noble Lords. I beg leave to withdraw the amendment, subject to the usual caveats.

Amendment 59 withdrawn.

Amendment 60 not moved.

Lord Bradley (Labour)

My Lords, I shall be brief on this amendment, which pertains to new Section 123X, which is headed:

“Local service contracts: application of TUPE”.

The explanation for the amendment is that it should be possible to ensure that responses to requests for information under this section are provided within a specified timeframe. To ensure that the overall process is achievable in a timely way, the amendment would ensure that an authority could set a timeframe for the provision of such information. It would also reduce the scope for gaming or playing for time to frustrate the development of a franchising scheme. Information under this section of the Bill is essential for the effective introduction of franchising. I would be grateful for the Minister’s views on the timescale appropriate for the provision of this essential information on TUPE arrangements. I beg to move.

Lord Kennedy of Southwark (Labour)

My Lords, I will be very brief in saying that we fully support the amendment from my noble friend Lord Bradley. As he said, it aims to ensure that responses are received in a specified time and to reduce the scope to drag things out to play for time. He has the full support of these Benches.

Lord Ahmad of Wimbledon (Conservative)

My Lords, I thank the noble Lord for tabling his amendment, and I appreciate his intentions in bringing it forward. It is important that information on employees is provided in a timely way, so that informed decisions can be taken by the franchising authority.

However, I am not sure whether there is a need for this amendment because subsection (7) sets out the provisions that may be made by regulations made by the Secretary of State. Clause 123X(7)(c), into which this text would be inserted, already makes clear that the regulations may prescribe the time at which information is to be provided. This would, in effect, set out the timescale within which information must be provided.

The noble Lords will be aware of the policy scoping notes that I circulated on 16 June. These notes summarise our intentions for the use of the regulation-making powers in the Bill. Let me assure noble Lord that on page 22 of that document we confirm our intention that the regulations to which this amendment would apply,

“will also set out the time periods within which operators must comply”,

with the requests made for employee information. Therefore, while appreciating the intent behind this amendment, I trust that with the clarification and reassurance that I have provided to the noble Lord that this matter is already addressed in the Bill and in our plans for secondary legislation, he will be minded to withdraw his amendment.

Lord Bradley (Labour)

I am grateful to the Minister for his comments. I will look carefully at the sections he has identified to reaffirm the assurances he has given. In the meantime, I beg leave to withdraw my amendment.

Amendment 69 withdrawn.

Clause 4, as amended, agreed.

Clause 5: Power to obtain information about local services

Lord Berkeley (Labour)

My Lords, I shall speak also to Amendments 72A, 72B, 73 and 73A. I do not think I need to detain the Committee very long on this because it is the same issue of timescale that my noble friend Lord Bradley spoke to on Amendment 69. It would be good to hear some comfort from the Minister that all these issues could be addressed and responded to in a suitable timescale, and it would be good to see some of these amendments, if not all of them, in the Bill.

My only other comment is on Amendment 70, in the name of my noble friend Lady Jones of Whitchurch. Information about environmental impact and air quality data is essential, not only linking them to vehicle emissions, but also to the surrounding air quality, which we have spoken about in Committee before, as well as to the safety records of bus operators. That is an essential part of providing the evidence that they are of quality and intent to maintain that quality, if and when they run the franchise. I beg to move.

Lord Bradley (Labour)

I rise to speak briefly to Amendment 73. I will not repeat the arguments I made for the previous amendment, but this amendment suggests an upper limit of 30 days, which is reasonable and justifiable in the context of the Bill. I look forward to the Minister’s further comments on that proposal.

Earl Attlee (Conservative)

My Lords, I have tabled Amendments 71 and 72 in this group. Amendment 71 is fairly simple but none the less deals with an important matter. Its purpose is to ensure that local authorities which have acquired what will doubtless be highly sensitive company information for the purposes of preparing a franchise scheme may use that information only for the sole purpose for which it was provided. At Second Reading I expressed my concerns about the provision of this type of information to local authorities. I am not convinced that it is right that bus operators should be under a legal obligation to provide what could be highly sensitive information about such things as revenue received from the running of a particular service, employment, staff details and so on. It is quite a list.

I am certain that it is important that, having been given the information, local authorities be restricted from using it for any purpose other than that for which it was intended. They should not be able to use it willy-nilly. They should not be able to dip in and out or, even more important, to pass that information on to a third party. In that case, who knows where the information would end up? It is not inconceivable that it could end up in the hands of a competitor, and that simply cannot be allowed to happen. This is a serious issue and my amendment is intended to give some assurance to bus operators that, having provided the information, it will be protected and used for one purpose only.

The purpose of Amendment 72 is to require local authorities to pay local bus operators for the information that they must provide to assist in the assessment of a franchise scheme. This follows up on a point I made at Second Reading. I find it unacceptable that bus operators should be under a legal obligation to provide what could be highly sensitive information absolutely free of charge. Information of the type sought is part of the good will of the company, and anyone in business knows that good will is built up over many years and is hard fought for. Operators work extremely hard to develop their services and to provide the best possible journey experience for their passengers. That is what they do and it is why they are in business: to provide a decent product that people want and that they will buy. It is the same with a bus service. So to expect operators to hand over all the operating details to the very organisation that is looking to take the business off them—thank you very much—seems quite odd. It simply would not happen in any other business transaction.

Lord Berkeley (Labour)

The noble Earl is asking that bidders be paid by the franchising authority for submitting information in preparing a bid. Is that what happens with London buses? Does TfL pay bidders in order for them to produce a decent bid? I am asking the question because I do not know the answer.

Earl Attlee (Conservative)

The noble Lord will know that London bus operations have been regulated for some time, so the issue does not arise in London. It is a new situation.

Under any other circumstances this practice would be prohibited under the provisions of the Competition Act, so why is it okay in this case?

I remind the Committee that when the passenger transport executives sold their bus operations after deregulation in the mid-1980s, such data were a huge factor in the price they sold those businesses for in the private sector. That slightly answers the point of the noble Lord, Lord Berkeley. However, 30 years on, such data appear to have no value and local authorities can get back for nothing what they originally sold for rather a lot of money, with operators providing the means to determine their own execution.

My amendment does not put a monetary value on the data simply because they will be different in each case; I am suggesting that operators and the authority should come to an agreement on their worth. I am under no illusion—such agreement is not likely to be easy and may not actually be achievable at all. In that vein, I hope that my noble friend the Minister does not regard this as a wrecking amendment. That is certainly not my intention and I will not be seeking to test the views of noble Lords on this point at any stage. However, I hope that he will be able to give some words of comfort to bus operators. Intellectual property must surely have a value, as does good will.

Baroness Randerson (Liberal Democrat)

My Lords, I rise to speak to Amendment 74 tabled in my name. Before I address it specifically, I will say that we are supportive of Amendment 70. It deals with air quality data, which I have addressed on several occasions in discussions on previous amendments. However, we would certainly not be supportive of the noble Earl’s Amendment 72. For a start, it is about information that any reasonably good operator will have at their fingertips. We are not asking operators to do a great deal of work to find these data; they are all easily available. Secondly, the noble Earl states that this is a reasonable request but this information is publicly available as regards the railways, for example, and there is no reason why we should have this level of information about the railways but not about bus services.

Earl Attlee (Conservative)

Does the noble Baroness agree that if, without the benefit of the legislation, one operator shared this information with another operator, it would be in serious difficulties with the competition authorities?

Baroness Randerson (Liberal Democrat)

That is a separate issue. The issue here is enabling local authorities to make a reasonable judgment in order to produce a good franchising scheme. I accept that there are separate issues to be addressed in relation to competition.

I turn to Amendment 74, on the power to obtain information about local services and franchising, and the handling of that information. This is purely a probing amendment designed to investigate the unevenness within the Bill. I have referred to the uneven approach to the three types of schemes and simply wish to point out to the Minister that on page 58 of the Bill appear identical words to those in my amendment, which set out the circumstances in which information could be disclosed in the case of enhanced partnerships. However, in the case of franchising, on page 33 there are no such caveats or restrictions on the use of the information. I am interested to find out from the Minister the legal reason behind this—or is it just chance that there is a long list of things that one can and cannot do with that information in the case of enhanced partnerships, but which are not included in the list on franchising?

Baroness Jones of Whitchurch (Labour)

My Lords, I shall speak to Amendment 70, which requires bus operators to publish data. A number of noble Lords have commented on this already. Data on the environmental impact of operators’ fleets, including the impact on air quality, the level of CO2 emissions and their safety record, should be available to local authorities and passenger organisations alike. It would be our intention that this information could be independently verified. These amendments build on our earlier debates on the need for buses to play their part in making our towns and cities healthier places to live and work. We believe that the bus operators have an obligation to deliver higher environmental standards and meet the requirements of low-emission buses. To be held to account for these commitments, the data have to be available to those who can best judge operators’ performance. The same arguments apply to safety standards, so that all passengers can be assured that that their provider is working towards zero tolerance on safety failures.

I, too, disagree with Amendments 71 and 72 in the name of the noble Earl, Lord Attlee. Amendment 71 aims to restrict the information provided to a franchising authority. We accept that some information needs to be identified as commercially sensitive but we do not accept that most of the information listed falls into that category. We need to be clear what is commercially sensitive and what is not. However, in most other comparable public services, the sorts of information we are talking about would be made public and shared. It would go beyond just giving it on a private basis to the local authority, and would be made more public. That is what we would expect in this instance.

Meanwhile, Amendment 72 requires bus companies to be paid for providing that core service information which, of course, would be crucial to a franchising bid, such as journeys taken, passenger numbers and fares. The point has already been made that operators will already have this information, so there is no additional cost involved. We contend that local authorities should have the right to this information and it would be standard practice to provide this service information in other contract bids.

We also believe that there should be more open sharing of data so that passengers and communities can have a greater input into the types of services they would like, and can have that input on an informed basis. I therefore hope that noble Lords will support the principles of openness set out in our amendment and oppose those attempts to have a most closed and secretive regime.

Lord Ahmad of Wimbledon (Conservative)

My Lords, there are a number of amendments in this group—I will seek to take them in turn—which relate to enabling franchising authorities to request information from local bus operators in connection with their franchising functions.

My noble friend Lord Attlee made some important points on Amendment 71 in relation to the purpose for which authorities may use information. The powers given to franchising authorities in this section are designed to ensure that they can obtain the information they need to take informed decisions about franchising schemes. We want the elected mayors and local transport authorities who take these decisions to have an appropriate understanding of the local bus market and robust information to inform their views of potential benefits, costs and risks.

Franchising authorities are able to request relevant information in connection with their functions only in relation to franchising schemes. They are not able to request the information for any other purpose under this section and would not be able to use this section to require information in the context of developing an enhanced or advanced partnership or an advanced ticketing scheme.

I can see that the industry might have concerns if this power were used regularly by authorities who were repeatedly contemplating high-level options—perhaps even without the agreement of elected members, or if the information, once obtained, was used for a different purpose. I also recognise that there are some potentially significant commercial risks for operators in providing this information.

It may be helpful if I clarify that the Bill ensures that franchising authorities are not obliged to publish information if they could refuse to disclose such information under freedom of information or environmental information legislation. There is nothing to prevent a bus operator informing a franchising authority of any concerns it may have about the impact of releasing certain information on its commercial interests. Let me assure the House that I expect all franchising authorities to consider such concerns before deciding how to use the information provided. I hope that that reassures my noble friend that I have sympathy with the spirit of his amendment. I do, however, have some concerns about how the change he proposes would work in practice.

First, the amendment would prevent the use of information in a franchising context after a scheme has been developed or made, such as at the procurement stage, which could have a material impact on the ability to implement a franchising scheme in practice. Secondly, the amendment could prevent appropriate information being included in the published consultation document or provided to third parties, such as the auditor of the scheme, who has an integral role in the process. I would therefore like to reflect on the helpful contribution from my noble friend on this issue and take time to consider how his points could best be addressed.

Amendment 72 in my noble friend’s name would require franchising authorities to pay a fee to local bus service operators from which they have required information in connection with their franchising functions. I know that my noble friend spoke very eloquently on this subject at Second Reading, and I understand that he is concerned about the commercially sensitive nature of the data, and value of those data. I also know that bus operators across the country have put years of hard work into developing their businesses, and have built up strong reputations and good will with customers and local people. I sympathise with the concerns that my noble friend expresses on behalf of the bus industry, but I need to balance those concerns against a desire to see well-informed decisions being made.

I am therefore concerned that this amendment will act as a block to authorities getting the information they need to make those informed decisions, which I think acts against the interests of all parties. I hope that this discussion has persuaded my noble friend that, though I am very cognisant of the issues and sensitivities raised by the requirement to provide information, the provisions in the Bill are designed to make the franchising decision-making process as robust as possible.

Moving on, I agree with the spirit of Amendments 69A, 72A, 72B, 73 and 73A. It is not in the interests of passengers or other stakeholders for the development of a franchising scheme, for example, to take any longer than necessary. Extended uncertainty is also likely to hold commercial operators back from innovating or making significant investments in their existing services.

Amendment 73 specifies a 30-day timescale within which a bus operator is expected to have taken all reasonable steps to provide the information requested. However, the amendment does not place any obligation on an operator to take action within the 30-day period proposed. Rather, it requires the franchising authority to notify the traffic commissioner if it appears to them that an operator has not taken reasonable steps to provide information within that period.

I also remain to be convinced that 30 days is an appropriate timescale to specify in the legislation. There may be some circumstances where a more rapid response may be necessary and others where a longer timescale is needed. I do, however, appreciate the purpose of these amendments and wish to consider further how the issues might best be addressed. I hope that this reassures noble Lords that I am sympathetic to the views expressed through the amendments and will be considering carefully the valuable contributions they have made.

The noble Baroness, Lady Jones, proposes Amendment 70, to require bus operators to provide information to franchising authorities about the environmental impact of bus services and their safety records. The Bill includes provision to allow franchising authorities to request information from bus operators about their services, to enable the authority to develop a robust assessment of their franchising scheme. The Bill lists types of information that can be requested, including information relating to revenue and patronage. The Bill also enables further categories of information to be specified in regulations, and I know that officials are working closely with local authorities and the bus industry to determine the nature of further categories of information that could be usefully specified.

Let me assure the noble Baroness that I agree entirely that the environmental impact of bus services and the safety of the public are issues that the franchising authority is likely to consider, and may look to address through its franchising proposal. However, some of the information that the amendment would enable franchising authorities to require will already be held by local authorities, such as the environmental impact of buses on the local area, and I am concerned about additional burdens being placed on bus operators. Therefore I would welcome further discussion on this topic, to determine how best we can achieve the objectives set out in the amendment.

The noble Baroness, Lady Randerson, proposed Amendment 74, to ensure that franchising authorities are not prevented from releasing information acquired from bus operators if that information is required for certain purposes, including for the purposes of criminal or civil proceedings. As she herself said, this is a probing amendment. In earlier Committee debates, she highlighted the differences in drafting between sections of the Bill. It may be helpful if I say a little more to explain the reasons behind this.

Once franchising is introduced in an area, there will be competition for contracts rather than competition on the road. Enhanced partnerships are a different scenario, with bus operators continuing to compete with each other on the road, albeit within the partnership framework. That is why different approaches are taken to the protection of information in the franchising and enhanced partnership sections of the Bill. Information acquired from operators in connection with enhanced partnerships must not be released if the authority could refuse to disclose it in response to a Freedom of Information Act request by relying on certain exemptions, particularly the exemption relating to commercial interests.

The aim is to protect bus operators’ commercial interests, as they will be competing with each other on the road. It would therefore be unfair for such information to make its way into the public domain where it could be used by a competitor. However, the enhanced partnership provisions make it clear that authorities are not prevented from disclosing certain information—for example, for the purposes of civil or criminal proceedings. The Bill simply makes it clear that the obligation to publish certain documents and information, such as the assessment of the franchising scheme, does not require franchising authorities to publish information that they could refuse to disclose in response to a request under the Freedom of Information Act, so I think the Bill already addresses many of the noble Baroness’s concerns and the objective behind her amendment.

I thank all noble Lords for their contributions to this debate. I hope that the detail I have outlined has addressed most of the concerns which noble Lords have raised and therefore that the noble Lord will be willing to withdraw the amendment.

Earl Attlee (Conservative)

My Lords, I am grateful to the Minister for his response to my Amendment 71, which he obviously understands. I admit that Amendment 72 was slightly tongue in cheek. I said that I would never press it to a vote. However, it is important that the Committee understands that operators will be giving valuable commercial information to the authority.

Lord Berkeley (Labour)

My Lords, I am grateful to the Minister for his reply to Amendment 69A and the other amendments in my name. I recall that he said that he would write to my noble friend Lord Bradley in connection with Amendment 69. Given that Amendments 69A, 72A, 72B, 73 and 74 all have time-related issues, I wonder whether he could extend his letter to cover those as well. On that basis, I beg leave to withdraw the amendment.

Amendment 69A withdrawn.

Amendments 70 to 74 not moved.

Clause 5 agreed.

Clause 6 agreed.

Schedule 2: Further amendments: franchising schemes

Baroness Randerson (Liberal Democrat)

My Lords, I will be brief as I am very conscious of the hour. This amendment is another of those which seeks to replace “may” with “must”, this time in relation to advanced ticketing as part of franchise schemes.

Research by Greener Journeys shows that smart ticketing across all services would improve bus journey times by 10% at a time when congestion is a very serious problem on our roads. Some 90% of buses on our roads nowadays have smart ticket readers, so there is very little practical reason why schemes such as this should not be part of franchising. We want to encourage advanced ticketing in all arrangements for the provision of bus services. I believe it is a reasonable expectation that it should be required above all in franchising services.

The Bill makes some very admirable attempts at future-proofing in certain respects, for example, in relation to information. We live in a time when I can order a theatre ticket online and take my phone along to the theatre as proof that I have bought the ticket. My Oyster card is rapidly being overtaken by the ability to use a credit card or a smart phone. Tickets for flights, trains or whatever you mention are rapidly being converted to smart applications. In that respect, the Bill is downright unimaginative and unambitious because it does not maximise the potential that is growing, literally by the month, for advance ticketing schemes. On that basis, I urge the Minister to give serious consideration to the amendment. I beg to move.

Lord Berkeley (Labour)

My Lords, I shall be even briefer. I fully support Amendment 77. The noble Baroness, Lady Randerson, is absolutely right. We have talked about ticketing before and the word “shall” should go in there. It is an excellent amendment.

Amendment 78 would require the ticketing system to be extended to demand-responsive transport and flexible bus services, assuming that the operators agree. I am sure they will but, as the noble Baroness said, if we do not put something like this in, they could argue that it should never be and we will be left for the next 30 years without a flexible bus ticket that you can interchange. That is why I tabled this amendment.

Lord Ahmad of Wimbledon (Conservative)

My Lords, I thank both noble Lords for their contributions. As noble Lords have heard me say many times, this is an enabling Bill. It will make powers available that local authorities may adopt to improve bus services in their area. Noble Lords will know that this Bill also forms part of our approach to devolution, giving local authorities the tools for local decision-making on these important issues. I believe and, indeed, expect that local authorities will give full consideration to these new powers and adopt them where they can show that they will make a clear improvement to bus services.

Based on these contributions, I do not think it is necessary to amend the Bill as proposed. As it stands, the Bill provides the carrot in the form of practical powers while local interests provide the stick. I would argue that this is the right balance for local decision-making. I am also confident that local authorities will implement advanced ticketing schemes where they conclude that such schemes would both be in the interests of the public and contribute to the implementation of their local transport policies. I assure all noble Lords that we have taken ticketing seriously across the whole of the Bill, not just by making changes to the existing ticketing provisions but also through the powers available under two new types of partnership and franchising schemes. I fully expect to see some significant developments across the country in the next few years, in part enabled by this Bill.

Ultimately, however, I believe that decisions about new local ticketing arrangements should be taken locally. On that basis, and given the undertaking I have given, I hope the noble Baroness is minded to withdraw her amendment.

I thank the noble Lord, Lord Berkeley, for tabling Amendment 78. I know he has a close personal connection to Cornwall, where community transport delivered under Section 22 of the Transport Act has done much to improve connectivity for rural communities. I understand that the aim of this amendment is to extend the proposed powers to make advanced ticketing schemes, so that such schemes may also cover tickets for journeys on services operated by educational and other bodies, and on vehicles used under a community bus permit, where operators of such services agree to be part of such a scheme. This is an issue I would like to consider further. I can see some merit in bringing community bus services operated under Section 22 of the Transport Act 1985 into advanced ticketing schemes. It could generate additional income for operators of such services and help integrate community transport into the wider network. Noble Lords will note, however, that services operated under Sections 19 and 22 of the Transport Act are not classified as local services and, as such, are exempt from the franchising and partnership provisions of the Bill. It is right that these services remain outside the scope of franchises and partnerships, as they are particularly focused on the needs of the local community.

Services operated under Section 19 of the Transport Act 1985 are those operated by bodies concerned with education, religion, social welfare and other activities of benefit to the community. Therefore, apart from the issue of extending the scope of ticketing schemes, the noble Lord’s amendment would require a change to existing legislation, given that vehicles used under a Section 19 permit cannot carry members of the general public. Any change to the way services are provided under Section 19 would require consultation and careful consideration.

The amendment of the noble Lord, Lord Berkeley, has some merit in enabling community transport to be part of a ticketing scheme; it raises important issues regarding services operated by educational and other bodies; and edges towards the area of total transport, in which the Government have a growing interest. As such I would like to consider it further.

I turn briefly to government Amendments 79 to 82 and Clause 7. These amendments concern the procedures for varying or revoking an advanced ticketing scheme, so that the consultation requirements for variation and revocation mirror those for making a scheme. This corrects the drafting of the Bill—I hope that the noble Lord, Lord Kennedy will not suddenly rush to his feet and ask me to give way at this late hour—but I assure the noble Lord that it does not change the policy intention. It was always the Government’s intention that variation and revocation of an advanced ticketing scheme should be subject to these procedures, and as such I beg to move the amendments in my name.

Baroness Randerson (Liberal Democrat)

My Lords, as ever, I appreciate the understanding of the Minister, but I hope that he will give serious consideration to a more even approach towards advanced ticketing throughout the Bill. On that basis I beg leave to withdraw the amendment.

Amendment 77 withdrawn.

Amendment 78 not moved.