Transport Committee grills authorities on community transport

In the second meeting in front of the transport committee, local authorities back the transport sector and questions are raised about why the situation was allowed to develop. James Day reports

The Transport Committee has held a second meeting on the subject of Community Transport (CT), which focused on evidence from Local Authorities (LAs), regulators and the Department for Transport (DfT).

Opening sessions

The first of two sessions had a panel consisting of Peter Shelley, Head of Passenger Transport at Hampshire County Council; Dominic Davidson, Senior Transport Coordinator at Staffordshire County Council; Sue Davey from the Association of Transport Coordinating Officers (ATCO); and Leon Daniels, Managing Director for Surface Transport at Transport for London (TfL).

What is non-commercial

The first question raised was asked to Sue Davey, and followed a note released by the DfT clarifying what it felt could constitute non-commercial CT permit services. Sue was asked if the definition set out was broader than what was outlined in the original DfT letter in July.

Sue said: “There still are some areas requiring clarification, and concerns about the focus on smaller CT operators. There’s still some ambiguity around services which charge fares which are substantially less than the cost of providing the service.

“There are concerns some operators may not be able to make the transition. Many larger CT organisations still use volunteer drivers, who may not be willing to undertake the level of training required.

“There are concerns about the timescales required for this transition. The majority of LAs are not issuing contracts currently, pending the consultation. There is a fear of potential legal challenge. This is causing quite some concern in the sector.”

Commercial sector not the same

Leon Daniels commented on the dial-a-ride services of London.

He said: “We use CT for 20% of our dial-a-ride division, which has developed on the back of DfT, Government and even EU guidance. CT has taken up slack and now performs a valuable role across the country and for us in London.

“If the CT sector was not able to operate in London, there would be some serious consequences. Inevitably, we would have less volume of service because it would cost us more to do and the quality would deteriorate.[wlm_nonmember][…]

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“The sorts of people who provide CT services for charities are providing a particular sort of service. If it is the case you now have to become in effect a bus driver, there is very little chance you will bother.

“We are particularly concerned because when we recently put out our dial-a-ride services to open procurement across the CT sector and commercial sector, the commercial operators all failed to pre-qualify. That’s because it’s not just about driving standards, but it’s about helping people. You need somebody willing to help passengers with shopping, escort them down the path home, help them to their seat and so on. They are not necessarily what you will get from a straightforward commercial operation.

“We feel strongly that the quality of the service we will get, as well as the quantity, will be negatively affected.”

Is the market contestable?

Leon was also asked whether he felt the market was contestable, since it seemed to not be desirable for commercial operators.

He responded: “The fact commercial operators were interested in getting to the PQQ stage for our contract suggests there is an interest, but it appears the services they are used to providing are not the ones we are looking for.

“The commercial sector will say it is inhibited by a higher cost base, but we would argue that since the charities are solely working for the benefit of their charitable objectives and reinvesting any surplus back into the community, compared to the commercial sector looking for an adequate return on investment, we believe it’s much better to have this money reinvested in the community, if possible. Nothing prevents a commercial operator bidding, but we would have to be satisfied on the price and quality.”

Peter Shelley added: In Hampshire we have had open tenders since 2009, but haven’t had a successful compliant bid from a commercial operator, even though they are all on the same electronic tendering system.

“We encourage CT operators to provide school contracts on open tender to make better use of the vehicles and to provide additional funding that does not solely rely on subsidy from us. That’s the area where there is an overlap, though we’ve had no complaints from commercial operators in our area. CT in Hampshire provides £700,000 worth of school contracts out of a total spend of £31m.”

Dominic commented: “Where we’ve tendered demand- responsive service contracts, there has been a very low response rate, and sometimes single bids from CT operators. With special educational needs and home to school transport requiring tail lifts, it’s more difficult to find operators to cover. That is something CT is very good at.”

Safety

The committee highlighted that there had been a suggestion that CT services were less safe, and asked whether the panel shared these concerns.

Leon Daniels said: “Our existing dial-a-ride and CT services show zero killed and seriously injured across our network. The safety record is excellent.

“If one takes the view that increased regulation is necessary in order to cure some concern about quality and safety of delivery, I feel that because the quality is so good, regulation on the sector would be disproportionate.”

Peter commented: “With their enhanced DBS checks and MiDAS training, I would argue that CT drivers are better equipped for the job than some commercial drivers.”

Dominic stated: “Personally when I audit systems I see very high standards of operation. If I had concerns about the standard of vehicles and drivers on this sort of work, it would be in the taxi sector.”

Value of CT

Leon Daniels stated that it would not be possible to provide the same level or quality of service if CT was driven out of the market.

He said: “When the people who are housebound and not able to get out without these services lose them, the cost would fall back on the community. Meals and health care may need to be delivered. Even if we ignore those costs to health and social services, there is no price we can put on the value of social enrichment that these people have from being able to get out.

“Some dial-a-ride passengers only see other human beings outside their houses when they go on their dial-a-ride trip. The social interaction of the journey is of great importance to them. If the services stopped, it would be a great pity for society in general.

“We already use taxi and private hire vehicles as part of the mix, providing door-to-door services. It would be fair to say that sector provides curb to curb services, not door to door, and the complaints level is greater.”

The DfT letter

Leon highlighted that an unintended consequence of the DfT letter was to place a number of local authorities in a state of panic, because they don’t want to be seen as encouraging people to operate illegally.

“Unless a meaningful consultation is started urgently, it’s entirely possible for starvation to occur before there has been a chance to treat the patient,” he argued.

Peter stated that it appears the DfT does not understand the sector: “It’s reasonable to me that the MOT standards of CT should be identical to that of a PSV operator, but two thirds of the journeys in Hampshire operated through section 19 are driven by volunteers who only drive a few times a year. Those people are hard enough to come by now – they’re not going to go through some new test.

“Likewise, even if the CT operator has a PSV licence for part of its organisation, those vehicles will be under different licensing and unable to move backwards and forwards.”

Sue added: “We’re already experiencing a reduced level of supply in the market.”

Commercial operators losing out?

The predicament of the commercial operators which had raised concerns to the transport committee was highlighted, where some had claimed to have lost a substantial amount of school contracts after a CT operator was established in the area.

Dominic said: “I can see that in some areas where there is overlap with some of the largest CT organisation, but in our experience CTs can only run up to 16-seater vehicles. Very few have a section 19 large vehicle permit, so anything over 16 seats they are not in the running for.

“Some of the competition for contestable contracts is with the taxi sector, which arguably enjoys lower overheads. I don’t think the impact for the most part is anywhere near the level that has been made out.

“I think some of the better quality PSV operators to my mind haven’t been concerned about section 19 providers, because those PSV operators are good at what they do, good at winning work and have a lot of other business. Section 19 providers can only carry smaller sections of the public.

“It could be argued that on paper there is a lower level of regulation, but in practice, I see exactly the same standards of vehicle maintenance, safety inspections, driver training and compliance. CT operators we deal with have consistently good compliance records. That is much more variable in the PSV sector.

“I think the abuse of restricted O-licences is doing much more damage to compliant PSV operators.”

Session two

The second session of the meeting included a panel of regulators and government officials. This panel consisted of Kevin Rooney, Traffic Commissioner for the West of England; Jesse Norman MP, Roads Minister; Stephen Fidler, Deputy Director of Road Investment Strategy Client at the DfT; and Peter Hearn, Operations Director (North) for DVSA.

DVSA Erewash guidance

Peter was asked about the guidance or advice followed ahead of the Erewash CT investigation. However, he described the case as an ongoing investigation which he did not wish to comment on.

He added: “We’re obligated as the enforcement authority to work through this. We work with the DfT in terms of the guidance it is offering.

“It’s a complex area at times and we’ve worked closely with operators as we’ve gone through this. We’re very keen to ensure people comply and we work with them actively to help them through that, and minimise the impact on their organisation.

“We’re here to educate and help people, it’s not all big stick.”

Withholding of permits

Kevin Rooney was asked about the approach of the traffic commissioners on permits, which have been withheld.

Kevin said: “Following the letter on July 31, we took it as revised guidance we had to adhere to. We took it as in line with decisions we, and myself personally, had made previously, in terms of the interpretation of what is commercial.

“We put things on hold for a few weeks to reflect on it and asked applicants more questions, so we could see whether or not they met the derogations. That introduced some delay.

“My understanding now is that application grants are underway again.

“Broadly speaking, we do agree with the updated guidance, which in line with decisions we have made at inquiries in the past.”

Case not concluded?

Stephen Fidler was asked if he shared the view of the Community Transport Association (CTA) that the Erewash CT case needs to be settled before the consultation is launched.

Stephen replied: “The law as we understand it applies now. DVSA took its decision, an enforcement decision, which was an important moment which had not occurred before. This is why we wrote the letter. That position applies in UK courts now.

“The reason we put our letter out was to seek to clarify the position, which we think the consultation will help to clarify further. It would seem sensible to progress with the consultation.”

Jesse Norman MP added: “I’d ask you to put yourself in the position of myself and officials at the time. As Bill Freeman has said, the record of these things becoming public is not unspoiled or unblemished.

“The important thing from the point-of-view of the department was to create a common understanding. We didn’t want rumours getting out and alarming people – we thought it was important to give a comprehensive treatment.”

The committee argued that the letter to Erewash was clearly stated to not be a decision, but preliminary findings. Panel Chair Lilian Greenwood questioned why the operator was invited to respond if it appeared the decision had already been made.

Stephen replied: “The letter doesn’t suggest another final decision would be made – it was not a draft finding. It was preliminary in the sense that it allowed Erewash to say the DVSA had got it wrong. The DVSA would be obliged to follow the precedent it had set for itself in the event of another case.”

The benefit of hindsight

Stephen was asked if he would you have handled anything differently. He said: “CT is a hugely important sector and we did not want to create additional uncertainty.

“There was going to be a vacuum following the decision if we didn’t put something out, and it was whether we as a department put something into that vacuum to provide information, or whether we allowed that to be the domain of the people taking legal action against the DVSA and their approach, which would no doubt have been put to every local authority.

“If we had not said anything, I think we would have been in a similar situation, if not worse, than what we are in now. However, I think I would do things differently with the benefit of hindsight, since the letter was interpreted as being much wider reaching than it actually was. The letter was specific and dealing with a specific set of circumstances and in retrospect we would have made some of that clearer.”

Safety

The panel agreed that the CT sector has a good safety record.

Peter has asked for his view on the MiDAS scheme used by many CT operators to train drivers. He responded: “I think there are some good schemes. We run the Driver CPC scheme, and depending on the consultation, some of those MiDAS schemes may be of benefit and able to be used within that scheme if that is the appropriate way to move this forward.

“I think CT is a safe sector. I think both the CT sector and the commercial sector can learn from each other.”

The minister was asked if his October letter implied the CT sector was less safe.

He responded: “The safety standards in the CT sector are not as high as in the commercial sector. The letter was intended to draw attention to that anomaly, not imply that the sector has a worse safety record. As we’ve heard, the safety record of the CT sector is very good.”

The Bus & Coach Association

The testimony of Martin Allen of the Bus & Coach Association (BCA) was brought up, specifically the allegation that the DfT had ignored his complaints for six years and the statement that the DfT’s handling of the case had been ‘shambolic.’ Stephen was asked if the concerns should have been taken more seriously earlier.

Stephen responded: “We have tried to have a good and constructive relationship with the BCA, but in a situation where there is legal action threatened it is quite a difficult conversation to have.

“My observation would be that the DfT was focused on doing the right thing by CT operators, and I suspect there may have been ways to do things differently, but I don’t think it would have led us to a fundamentally different place.

“I think we are where we are because of the legal action, rather than any lobbying.”

Inconsistent legislation

The question was raised of why the Transport Act of 1985 has never been updated, leading to inconsistency in EU and domestic legislation.

Stephen responded: “The main reason is that when the regulation was first brought in, it was the DfT’s understanding that non-commercial and not-for-profit (the wording used for section 19 and section 22) were essentially the same thing. Since then, that understanding has changed for a variety of reasons.“Until DVSA took the July 31 decision, there wasn’t a moment where things came to a head which made us say ‘we need to change the guidance.’ Our intention was that would then flow through in a more orderly way with the forthcoming consultation. Unfortunately, the position DVSA was in brought that forward. The intention had been to change it and update it in a more consultative and effective way than we have been able to do so far.

“The issue is complex and the DfT had been seeking to get to a position where it was interpreting things as sensibly and widely as possible. It wanted a set of guidelines and regulations which were workable in practice but did not have an adverse impact on the CT sector.”

Jesse commented: “Until you have a legal challenge, there is an incentive and onus on you not to act in advance of the problem actually being real. You can be certain there will be ramifying effects across a complex sector, and there may be every reason not to act if the legal process turns out not to be valid.

“In this case, it was clear that other EU countries did not have anything like the size or scope of the sector we have in this country.

“It had been known there was a concern, and the question was how serious the concern was.”

Stephen added: “I think the fuller picture the consultation will give us is a better understanding of exemptions. I don’t think it will alter the core position as we understand it. I will be surprised if that changes.

“I hope the consultation will give us richer data and information, along with some further ideas and suggestions around some of the interpretations of non-commercial and how we can minimise the impact of this. Potentially, it could offer some solutions to supporting the sector effectively.

Funding for CT O-licences

Jesse Norman said he wanted to stress that many CT operators would not be affected: “We do want to land this point squarely today – if you are running transport which is ancillary to your main activity, or vehicles with less than eight seats with volunteers, you are highly unlikely to be affected by this.

“The vast majority of small organisations will be exempted. I don’t personally expect an enormous change.

“We recognise that some organisations may fall the wrong size of that divide. We are announcing a fund of £250,000 in this financial year to assist operators that need to make the transition to getting an O-licence in order to be properly registered as PSV operators.”

Jesse added that he expects the consultation to launch before Christmas and take 12 weeks, concluding around the middle of March.
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