A Dorset operator had its operations severely curtailed earlier this year as a result of significant failures to maintain its fleet along with questions over the legality of its operation
In March 2023, Traffic Commissioner Kevin Rooney issued his written decision in the case of North Dorset Community Accessible Transport (NORDCAT), a limited company which is also a registered charity, and its wholly owned subsidiary Nordcat Services.
The operator, which operated under a ‘limited’ minibus permit exemption, was called to a preliminary hearing in November 2020 following a DVSA maintenance investigation which found systems lacking. At that hearing, the TC identified that the operator was involved in a substantial home-to-school contract that seemed to form potentially a significant part of the operation, and urged it to take legal advice. The maintenance concerns were addressed by statements of intent that, were the company a holder of a PSV operator’s licence, would normally be recorded formally on the licence; no such facility exists for minibus permit operations.
The TC heard that a decelerometer had been purchased and would be used at every inspection thereafter, that the operator’s general manager, a Ms Reed, would attend a passenger operator licence awareness course and that the apprenticed technician would undergo relevant training on inspection procedures.
Maintenance investigation
DVSA Vehicle Examiner (VE) John Foster conducted a maintenance investigation on 9 August 2022 and found no evidence of a safety defect and recall system; no evidence of brake tests completed at PMI; it was difficult to establish how effective driver defect reporting system was; an MOT failure rate of 76.6% and vehicles presented for test with obvious failure items; an ineffective system of wheel security and tyre management; a prohibition received at annual test for several defects on DY07 OBL; and that it was unclear who makes the decision to take a vehicle out of service.
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The operator gave a response but VE Foster concluded that more was required to be done, leading the TC’s office to call it to public inquiry (PI) to consider whether it was necessary that the operator’s permit be varied or revoked. The operator’s small bus permits had been issued by the Community Transport Association (CTA), and three large bus permits were issued by the TC. It should be noted that unlike with the legislation for PSV operator licensing, the grounds for revoking a permit are not specific; in this case, the TC said he took the grounds applied to PSV licence holders as guidance. Nor is a PI required before revocation, though the TC felt it fair to give the operator a hearing. Trustee/Director Gerald Rose and Ms Reed attended unrepresented.
Asked about maintenance records for vehicle P401 MDT, which were different from all the others, and how that vehicle was licensed, Ms Reed explained that it belonged to maintenance provider Liam Stacey but it was operated by NORDCAT. The operator had been set up by Dorset County Council in 2001 to provide community transport, and Nordcat Services (NS) was set up to carry out commercial operations. It was explained by Mr Rose that NS held a contract with Kingston Maurward College, though the matter was confused as Ms Reed said that the college contract was with NORDCAT.
It was explained that any surplus generated by NS was paid to NORDCAT. Having seen the accounts, and taking account of the details provided, the TC believed that NS was a commercial organisation operating a commercial service without the benefit of an operator’s licence. He asked whether legal advice had been sought as had been recommended in 2020, to which Ms Reed replied that NORDCAT had sought further advice from the CTA, and that it had not been possible to find a lawyer who had knowledge of PSV operator licence law. She contended that they had never thought of NS as a separate company.
The journey length for the contract was given as 25 miles, above the 10 miles given in the guidance as having a small impact. The contract also involved 10 minibuses and one 33-seater. The large bus permits were only used on the school contract, and non-school work included transport for the elderly to and from the shops, totalling three or four journeys per day, as well as to clubs, hospital appointments and other similar activities, carried out using the minibuses. A further smaller vehicle was operated but driven by volunteer drivers so fell outside the scope of any licence.
Asking about maintenance, the TC noted that there was still no evidence of any brake performance testing at any inspection; it was stated that they had now bought a decelerometer but had been told that it was not appropriate for their vehicles so it had not been used, but had now found someone who had a roller brake tester. VE Foster had been told in August 2022 that brake testing would happen and by January 2023 it had not happened; Ms Reed said that the problem was finding someone who knew how to use it. Since the issue had first been raised in summer 2020, the TC said that promises being made at the PI could carry only limited weight, despite promises from trustee Mr Rose.
Considering the 76% MOT failure rate, Ms Reed said she hadn’t realised that it was so bad. Time and cost were said to have been a major issue, and the operator had lost its main mechanic. A Mr Stacey was undertaking inspections and in-house staff carrying out rectification work. Mr Stacey had worked for a medium-size bus company, was qualified and had attended a vehicle inspection course in 2018.
Following the MOT of DY07 OBL, which had failed with three loose wheel nuts, all the vehicles now had wheel nut pointers, though the reason for the second failure, no brake effort at all on one wheel, was unexplained; a brake pipe which had split was fine when it left the yard and must have split on the eighteen miles to the centre, it was said.
The week after the inquiry, the TC’s office was contacted by Backhouse Jones solicitors asking for further information on the case, and subsequently seven pages of submissions were provided in which it was said that NS was a non-operational company which, contrary to that stated in the accounts for 2021, did not hold any contracts for work and does not handle any money. NORDCAT was said to provide transport for the students of the college, and that many of them had special educational needs, requiring a very bespoke service, whilst others lived in remote areas where there was no viable commercial service. The college contract was said to represent around 90% of NORDCAT’s operation.
Legality of operation
The TC found that Mr Backhouse’s submissions muddied the waters considerably, leaving two possible ways that the college contract was conducted; the first of which aligned with documents published at Companies House and with the oral evidence of the Mr Rose, which would point to NS being an active, wholly owned, subsidiary of NORDCAT. If that were correct, then the TC said he could not help but find that NS was an illegal operator of public service vehicles, and that it is being facilitated by NORDCAT loaning the authority of its section 19 permits.
The second option, as put forward by Mr Backhouse, was that Nordcat Services has no part to play and NORDCAT directly operates the college contract. “This calls severely in to question the governance of NORDCAT having apparently published false accounts for a number of years,” the TC stated. “It may be that the question of the operation’s structure and the organisations’ governance is not one I have to resolve and may fall instead to the Charity Commission. It is only relevant if, in the second scenario, I would find that the operation falls within the law by reference to the DfT guidance.”
The TC analysed the situation and found that NORDCAT’s charitable status was not sufficient in itself to satisfy a non-commercial status; guidance states that an operator needs to consider each and every one of the purposes for which it is providing road passenger transport services to ensure that is satisfies the exclusively non-commercial purposes requirement. He agreed that, as far as he could see, any surplus was reinvested within the business.
The TC was also led by guidance that “the overall extent of competitively tendered contracts […] can be indicative of its purposes and therefore should be taken in to account” and “the amount of competitive tendering is not in itself sufficient to prevent an operator being able to fall within the non-commercial exemption.”
He took account of the fact that the charity had 23 permits, which he said classified the operator as medium size when compared with typical bus and coach operations. “It is certainly not small, being ten times that allowed for a restricted PSV operator,” he noted, adding that apart from the major bus operator in the area, it appeared to be amongst the bigger operators in North Dorset.
The TC found, by looking at a previous case, where an operator provides road passenger transport services simply for the purpose of generating surpluses to fund other transport or non-transport activities, the operator does not fall within the exclusively non-commercial exemption, though that same judgment did not completely preclude cross-subsidies, going on to give an example being a rural bus service operated for the purpose of social inclusion; some of the college work might fall in to that, but only a small proportion, he believed, having looked at the evidence and submissions.
Looking at the ‘main occupation’ test, the TC said it was clear that the college contract was the operator’s main occupation, representing almost all of its income. Mr Backhouse did point to the lower pay of the minibus drivers in particular compared to commercial operators but that must, the TC believed, be to a large extent because they benefit from the operator’s status and do not need a PCV entitlement on their licence.
Challenging the claim that the college has a high number of learners with special needs, which would fall within the charitable aims of the operator, TC Rooney noted that the latest OFSTED report did not identify any significant number of learners with such needs, lending further weight to his belief that the contract was anything other than income generation.
Charitable work
The TC heard that around five jobs a day were done which fell within the charitable aims, though the large buses are never used on that work. He believed that the operator could have met the definition of an exempt body if he were to revoke all of the large bus permits and all bar five of the small bus permits, and attached a condition to the remaining permits that they are not to be used for home to school transport.
He went on to consider further matters relating to vehicle maintenance in more detail, including matters relating to DY07 OBL, a Mercedes-Benz 816 Plaxton Cheetah with 33 seats, which was presented for its MOT on 23 July 2021 and failed due to concerns with the body exterior, brake systems and components, and headlamp aim. There were also advisory defects for wheels, hubs and suspension, and it was prohibited with immediate effect because it has three loose wheel nuts on the rear axle, nearside. It was presented for a retest on 10 August, whereupon it was found that the rear nearside wheel now had no braking effort whatsoever; whether this was linked to the rectification work on the braking system components was not known.
TC Rooney went on to review further records, including for Ford Transit K30 NCT which failed its MOT on 12 July 2022 due to low parking brake efficiency and because tyres of different sizes were fitted to wheels on the rear axle. One of the number plate lamps was also inoperative.
The TC’s conclusion was that maintenance systems were “about as poor as anything I have ever seen.” Inspections appeared to follow no logical pattern, he said, and were at times 15 to 21 weeks apart but sometimes as close as a fortnight. There was not one compliant inspection record in the entire evidence bundle for the PI, he said, and noted with alarm that although the law changed in early 2021 to ban the use of tyres over 10 years old on the front axle of PSVs, the operator did not seem to see the need to check the age of the tyres. There were indications that second-hand tyres were being fitted.
In looking for positives to provide balance, the TC found that the only positive was that there was a new technician who seemed to have a reasonable background – although noting that even his own vehicle has not been subject to a brake performance test over the last four inspections.
“This is a permit operation. That does not mean that the passengers and other road users do not deserve to be safe. I cannot apply a lower standard for maintenance than I would for a PSV operation. I find that the operator does not have the competence or capability to maintain larger vehicles. It does not have the competence or capability to maintain any significant number of smaller vehicles,” he concluded.
Decision
Following on from his a findings that the operator in its present state was not an exempt body and that the operator did not have suitable arrangements to keep the large vehicles fit and serviceable, the large vehicle section 19 permits issued were revoked with effect from 24 July 2023. Following consultation with the Community Transport Association as the issuing body of the small vehicle permits, TC Rooney also revoked 15 of the 20 small vehicle section 19 permits with effect from the same date.
Following the publication of the decision, the Community Transport Association urged operators to prioritise robust maintenance programmes to ensure the safety and compliance of their vehicles on the road.
“If operators are concerned that they are falling below the required standard or want to ensure they have considered everything and are operating legally, we encourage them to contact us. The CTA can offer recommendations, guidance, and advice to prevent operators from jeopardising their operation,” said Community Transport Association Chief Executive Victoria Armstrong, directing them to the range of advice mechanisms it can provide to support operators in delivering a safe and legal community transport service.
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