House of Commons Library

Bus Services Act 2017

Published Monday, June 12, 2017

This paper explains the policy background to and contents and purpose of the Bus Services Act 2017. It will be updated as the Act is brought into force and implemented over coming years.

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The Bill was introduced in the House of Lords on 19 May 2016, it passed all its Parliamentary stages and received Royal Assent on 27 April 2017.

The Act largely extends to England and Wales but applies only in England. However, one provision also extends to Scotland. The main changes in the Act do not affect London.

The Act has been a long time coming. In the mid-1980s the Conservative Government deregulated the bus industry across Great Britain, except in London. From almost the moment deregulation was introduced in October 1986 there have been calls to reregulate it, particularly from the local authorities and Passenger Transport Executives in the metropolitan areas outside London.

These calls have been based on concerns about the decline in passenger numbers; requirements for local authorities to step in and subsidise ‘socially necessary’ services which are commercially unviable; uncertainty about services and timetables; and a lack of coordination particularly as regards fares.

The private bus industry has defended its record, arguing that since deregulation there has been massive investment and modernisation and that it has successfully navigated changes in passenger expectations based on accessibility, the environment and technology.

The Labour Government introduced a type of reregulation in 2000 in the form of a Quality Contract Scheme (QCS). However, no area has ever introduced such a scheme, largely due to concerns about the complexity of the process and a lack of protection from legal challenge on the part of incumbent private bus operators. The closest anyone has come to introducing a QCS is the North East, whose plans eventually fell by the wayside late in 2015.

Since 2010 the Conservatives in government, first in Coalition with the Liberal Democrats and since 2015 as a majority government on their own, have been moving slowly towards some sort of reregulation for those parts of the country that want it and which meet certain requirements (i.e. a combined authority with an elected mayor). This significant policy change has largely been driven by the ‘devolution agenda’ for England.

The Act is essentially an enabling Act, extending the ability of local transport authorities to introduce franchising or a new partnership arrangement called an enhanced partnership. It also makes amendments to Quality Partnerships and renames them Advanced Quality Partnerships in England; aims to make it easier to introduce multi-operator ticketing and improvements to enhance passenger accessibility and information.

The main concerns that were raised about the Act during its passage through Parliament were that the bar to implement franchising may still be too high and that the Competition and Markets Authority may be able to quash, water-down or delay franchising; that the Government does not intend to make franchising immediately available to all areas; and that local authorities would be prevented from forming new municipal bus companies.

A number of amendments were agreed in the House of Lords and overturned by the Commons; these included the removal of automatic franchising powers to all local authorities in England and the reintroduction of a ban on the formation of new municipal bus companies.

In its report of 25 November 2016 the Transport Select Committee generally welcomed the Act, though it supported many of the changes made by the Lords and later overturned in the Commons. It also criticised the Government for not bringing forwards draft secondary legislation and guidance in time for the Committee to scrutinise it. The Government published draft regulations and guidance on 8 February 2017.

On 4 May 2017 six regions of England held elections for newly created combined authority mayors (Tees Valley; Greater Manchester; Liverpool City Region; West Midlands; Cambridgeshire & Peterborough and the West of England). These mayors will have automatic access to the bus franchising powers contained in the Act from 27 June 2017. It remains to be seen who will take them up, how and when.

Further information on bus policy can be found on the bus policy page of the Parliament website.

Commons Briefing papers CBP-7545

Author: Louise Butcher

Topics: Buses, Local government

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