Consultation outcome

Summary of consultation responses, impact assessment and outcome

Updated 18 August 2020

Executive summary

The Department for Transport (DfT) is grateful for the time that the 42 individuals and organisations took to respond to the consultation. We sought views on two proposals relating to:

1. public service vehicle (PSV) operator licence procedures – this was about changing the rules to allow PSV operators who meet the necessary criteria for licensing to obtain an interim or provisional licence

2. formal tribunal rules – we posed the question: do you agree that introducing formal tribunal rules will be beneficial to the Traffic Commissioner for Great Britain (Traffic Commissioners’)’s tribunal functions?

Most of the respondents (34) were content with the proposed changes to the PSV operator licence procedures. These changes will enable applicants to have operational approval at the earliest opportunity, while ensuring that normal safeguards remain in place.

We note that most respondents – 34 of the 42 – agree with the DfT’s preferred option of offering a provisional licence. The main points raised related to the possible consequences of an operator being issued with an interim or provisional licence.

Some respondents cited safety concerns of applicants not making a full and complete application in the first instance. Other respondents (mainly councils) cited possible consequences (for example to passengers) of one of these licences being issued (and a contract awarded) only for the full licence to subsequently be refused. This concern was considered as part of the technical assessment and the impact is estimated in the impact assessment.

We also note that most respondents – 37 of the 42 – agreed that the proposed changes to the formal tribunal rules will be beneficial to the Traffic Commissioners’ tribunal functions; however, there was some concern expressed as to the potential for increased burdens on industry resulting from this introduction.

These burdens were considered by the DfT as part of the impact assessment for the consultation where an estimation of these costs is given. We expect the increased costs to have a negligible overall impact, however, as operators should already be aware, and compliant with, the conditions set out in the Traffic Commissioners’ existing statutory guidance and statutory directions.

The DfT is satisfied that, overall, there was support for the options listed to be covered in formal tribunal rules. Even those who did not feel able to comment on these changes supported the primary objective, which is to make things easier to understand for operators.

Further to the consultation, the DfT will consider the opportunities for:

• bringing forward legislation to change PSV operator licensing. The option of introducing a provisional licence, on a conditional basis while further checks are carried out was supported by most respondents and is the lead option. Implementation will depend on the place and priority for these proposals in the government’s legislative plans.

• introducing formal tribunal rules, which will be beneficial to the Traffic Commissioners’ tribunal functions. The DfT would like to see all the options listed in the consultation covered in formal tribunal rules, and will also consider the other suggestions from respondents when drafting the updated rules.

  Impact assessment

It is possible that operators could obtain a conditional grant or an interim licence but subsequently have their application for a full licence refused.

It is difficult to assess the likely number, but comparison figures in the goods sector for interim licences indicate there were 1,456 interim licences or directions issued to new applicants or existing licence holders applying for a major change to their operator’s licence in 2016 to 2017; of these, 20 (1.37%) applicants had their applications subsequently revoked or refused. This low number is due to the gatekeeping checks carried out by the Traffic Commissioners prior to granting an interim licence.

The main direct costs to businesses of complying with tribunal rules will be the fees to non-compliant operators. Due to the small number of fineable cases reported by the Office of Traffic Commissioners, we expect the total fines to non-compliant operators to be less than £10,000 per year.

Operators will be encouraged to increase compliance with tribunal rules and may face additional administration costs in doing so. We expect these costs to be negligible as operators are already aware of, and should already be compliant with, the conditions set out in the Traffic Commissioners’ existing statutory guidance and statutory directions.

Background

Between 3 April 2019 and 25 June 2019, the DfT held a 12-week public consultation about changing the rules to allow PSV operators who meet the necessary criteria for licensing to obtain an interim or provisional licence. This licence will enable them to commence vehicle operations as soon as possible.

The consultation also sought views on whether to create the power to introduce formal tribunal rules for the tribunal functions carried out by the Traffic Commissioners.

72% of the holders of PSV operator licences in England, Wales and Scotland are small operators with five vehicles or less – consequently, delays in obtaining licences can be particularly discouraging to this group of operators, deterring them from entering the market, and can jeopardise the success of their business plan.

Allowing operators to commence vehicle operations as soon as possible using an interim or provisional licence will assist businesses in providing essential public services and help to reduce business plan-associated risk.

The principal objective for the introduction of formal tribunal rules is to allow Traffic Commissioners to deal with cases fairly and justly. Clearly defined formal rules will bring greater certainty and will help operators to understand and comply with directions issued by a traffic commissioner.

The DfT has suggested four possible options for changing the PSV operator licence rules, specifically:

1. offering a provisional licence (our preferred option)

2. offering an interim licence

3. other legislative changes

4. other non-legislative changes

The provisional licence option would require the amendment of the Public Service Vehicles (Operators’ Licences) Regulations 1995, which allow Traffic Commissioners the authority to attach a condition to a licence limiting the time that the licence is valid. This change would have the effect of granting a licence on a conditional basis while further checks are carried out.

The introduction of an interim licence requires legislative change to the 1995 regulations to allow the issue of these types of licence. This change will enable some applicants for PSV operator licences to apply for temporary authority to operate while making their full application for a licence.

Other approaches considered include making legislative changes to reduce processing times. This option could include the removal of the statutory right of specified bodies to object to an application for a PSV operator’s licence, enabling applications to only be considered once all the information is available.

Alternatively, reductions in processing times for applications could be achieved through non-legislative methods, such as increasing staff resource employed or by reducing the level of scrutiny each applicant undergoes at the point of recruitment; however, both approaches may increase the costs and other risks associated in operating the service.

The consultation ran for 12 weeks, and covered England, Wales and Scotland only, as the jurisdiction of the Traffic Commissioners does not extend to Northern Ireland.

Consultation questions

PSV operator licences

Question 1

Do you agree with changing PSV operator licence procedures so that applicants can have operational approval at the earliest opportunity (subject to normal safeguards)?

Question 2

Do you agree with our proposal to implement option 2? If no, what is your preferred option?

Formal tribunal rules

Question 3

Do you agree that introducing formal tribunal rules will be beneficial to the Traffic Commissioners’ tribunal function?

Question 4

What would you like to see covered in formal tribunal rules?

Types of respondents

The department received a total of 42 responses from the following types of respondents:

• members of the public

• transport managers

• transport operators

• goods vehicles operators

• PSV operators

• consultants

• councils

• trade associations

The breakdown of those responses is as follows:

Are you responding…

on behalf of an organisation?	25
as a member of the public?	17

Are you a…

member of the public	17
association	6
goods vehicle operator	5
council	5
PSV operator	3
other	3
consultant	2
transport manager	1

Responses to the consultation questions – PSV operator licences

Question 1

Q1: Do you agree with changing PSV operator licence procedures so that applicants can have operational approval at the earliest opportunity (subject to normal safeguards)?

Yes	34
No	6
Don’t know	2

Q1.1: If no, the reason you are against this is because…

of the potential risks to safety	2
all checks should be completed before approving a licence	3
the current process works, why change it?	2
another reason	0

Although 6 respondents answered’No’ to Q1, 1 respondent didn’t give any reason against, and 2 respondents gave 2 reasons against, hence 7 responses to Q1.1.

Summary of responses

There was strong support – 34 of the 42 responses – for changing PSV operator licence procedures so that applicants can have operational approval at the earliest opportunity.

For those that opposed the change, there was a suggestion that things could be resolved simply by speeding up the administrative process. It was also suggested that a random audit of some applications may be useful in establishing where the hold-ups are.

There was also a suggestion that this change would be of greater benefit to existing operators who are looking to expand their operations, rather than new entrants to the industry, which may require – and should attract – greater scrutiny to ensure they understand the legislation and industry rules they need to comply with.

There were calls from some respondents to apply the proposed changes to operators of heavy goods vehicles (HGVs), as well as PSVs. As stated in the original consultation document (PDF, 454KB), the policy option that relates to provisional licences already applies in this area.

Question 2

Q2: Do you agree with our preferred option of the provisional licence approach?

Yes	31
No	6
Don’t know	2

Q2.1: If no, what is your preferred choice?

interim licence	1
other legislative changes	2
other non-legislative changes	0
no change	3

Summary of responses

The consultation set out five policy options:

1. no change – make no change to the primary legislation

2. provisional licence – amend the PSV (Operator’s Licences) Regulations 1995 to allow a traffic commissioner the authority to attach a condition to a licence limiting the time that the licence is valid; this would have the effect of granting an interim licence on a conditional basis whilst further checks are carried out

3. introduce legislative change – these changes would allow the issue of interim licences to enable some applicants for PSV operator licences to apply for temporary authority to operate upon making their full application for a licence

4. consider methods to reduce processing times through other legislative change – this could include the removal of the statutory right of specified bodies to object to an application for a PSV operator’s licence, enabling applications to be considered once all the information is available

5. consider other methods to reduce processing times through non-legislative measures – this could involve increasing the staff resource employed in the function or lowering the level of scrutiny each applicant undergoes

There was strong support – 31 of the 42 responses – for the government’s preferred policy option outlined in the consultation: option 2.

While there was support for the provisional licence option, several respondents – particularly local government – urged the DfT to consider any unintended consequences that might occur for local authorities should an operator enter into a contractual arrangement only to have their licence application subsequently refused.

Concerns cited in the responses included impacts on passengers and councils, who may have to go through the time-consuming process of contract re-tendering.

Some felt that a full and complete application to the Traffic Commissioners should be made at the outset to avoid any disruption. The impact of this is considered in the consultation document (page 14, paragraph 1.15–1.24) (PDF, 454KB).

It is possible that operators could obtain a conditional grant or an interim licence but subsequently have their application for a full licence refused.

It is difficult to assess the number who may be rejected; however, comparison figures in the goods sector for interim licences indicate there were 1.456 interim licences or directions issued to new applicants or existing licence holders applying for a major change to their operator’s licence in 2016 to 2017 – and, of these, 20 (1.37%) applicants had their applications subsequently revoked or refused. Plus, operators have a choice to opt for a full application from the outset, rather than an interim one.

There were several concerns related to the safety of issuing a licence without the full number of checks being carried out. One association felt that an average wait of 50 working days for a PSV licence was not unreasonable, given the responsibilities of having one, and that technology (it was hoped) could reduce this time in the future.

The DfT’s reasons for the recommendations, which are set out in the consultation document (pages 6–7, parahraphs 1.6–1.13) (PDF, 454KB), relate to the Traffic Commissioners triennial review 2015: implementation plan. In granting an interim licence option, a traffic commissioner could consider granting an application once satisfied that the applicant meets the initial requirement to hold a licence, subject to further investigation or the expiry of the objection period.

There was a suggestion that a provision should be made for existing operators to vary licences while a formal determination is made.

Responses to the consultation questions - formal tribunal rules

Question 3

Q3: Do you agree that introducing formal tribunal rules will be beneficial to the Traffic Commissioners’ tribunal functions? If you do not agree, why not?

Yes	37
No	2
Don’t know	3

Summary of responses

There was strong agreement – 37 of the 42 responses – that the introduction of formal tribunal rules would be beneficial to the Traffic Commissioners’ tribunal functions.

Some respondents questioned whether this introduction would, in fact, make it more difficult for operators to understand the rules.

Another respondent (trade body) flagged potential increased burdens on industry from this change, citing time and cost implications. This was considered as part of the DfT’s impact assessment, but we do not anticipate that this introduction would lead to an increase in the volume of public enquiries.

Some other respondents questioned whether such rules would negate the need for the statutory guidance and statutory directions issued by the Senior Traffic Commissioner, which they believed to be helpful. It is the DfT’s intention to continue with this arrangement in any case, as the introduction of these rules would reduce the amount of statutory guidance and statutory directions.

One respondent observed that the government had not presented sufficient evidence of the scale of the problem that needs addressing. It is critical that any new rules do not increase the regulatory burden on operators who seek to comply and act in good faith.

Introducing formal tribunal rules would have a significant time and cost implication on many operators. As a comparison, an increase in the procedural rules relating to employment tribunals has had a significant negative impact on our members.

Question 4

Q4: What would you like to see covered in formal tribunal rules?

Option	Yes	No
Q11.1 Case management	34	8
Q11.2. Dispensing of directions	25	17
Q11.3. Submission of evidence and productions	30	12
Q11.4. Attendance of witnesses	25	17
Q11.5. Procedures at hearings	32	10
Q11.6. Delegation of work to staff	19	23
Q11.7. Periods of grace	20	22
Q11.8. Orders for expenses	19	23
Q11.9. Orders for costs	21	21

Q4.1: If other, please provide more details.

Once the change to primary legislation to give the power to make tribunal rules is enacted, the government will consider the content of the tribunal rules; any comments received as a result of this consultation will be taken into account during this development.

Summary of responses

There was support for all tribunal rules options, although Q11.6 to 11.9 did not get majority support.

There were several additional suggestions for inclusion in tribunal rules. One respondent suggested rules for non-typical operating relationships, such as subcontracts, or instances where the operator uses infrastructure belonging to the local authority.

Tribunal rules will be introduced to apply to proceedings before a traffic commissioner; they are not intended to amend the general laws governing operator licensing. The DfT’s position on this is that we currently have no plans – aside from the changes arising from this consultation – to further amend legislation governing operator licensing.

The consultation is focused on the need for rules – not general changes; rules will apply to all hearings presided over by Traffic Commissioners and would cover the case management of those proceedings.

There was a call for the maximum orders for costs award to be increased to properly incentivise applicants, while another respondent suggested greater flexibility for operators to claim these against Traffic Commissioners.

We consider the current position is broadly consistent with the wide position, but the lack of tribunal rules for Traffic Commissioners is a specific and unusual gap.

Some of the questions in this consultation were about changing the rules to allow PSV operators who have met the necessary criteria for licensing to commence vehicle operations as soon as possible. Given this, there was a suggestion that, for submission of evidence, Traffic Commissioners continue to set attainable deadlines when requesting this from operators.

On a related point, there was a suggestion that operators should be given the opportunity to explain reasons for non-compliance in submission of evidence. Currently, operators called to a hearing are given a minimum statutory time period to make representations, including the provision of any evidence, to Traffic Commissioners.

This respondent also suggested giving Traffic Commissioners leniency in amending periods of grace. The government has no current intention of amending the maximum time periods as it is considered necessary to have a legal framework within which the discretionary decisions of commissioners can be made on a case by case basis. The Senior Traffic Commissioner has issued statutory guidance and statutory directions on how the provision may be applied.

Some respondents felt that they didn’t have the necessary expertise to comment on the content of tribunal rules, but stated that they should enable everyone involved to be fully aware of the process.

One member of the public was concerned that the transparency of primary legislation would be lost with the introduction of tribunal rules, particularly where the evidence is agreed in advance and is therefore subsequently not read out.

The option to delegate work raised some concerns around the qualifications of staff who would be assessing applications. Commissioners remain responsible/accountable for decisions made under delegated authority. All delegation is on an individual basis and commissioners only delegate to staff who have demonstrated the required level of competence in that function. Staff are recruited to roles on the basis that they will have sufficient capability to deliver the work delegated to them. See the Traffic Commissioners’ statutory guidance on delegation of authority for more information.

There was a suggestion that, as the majority of applicants and operators who appear before Traffic Commissioners are not represented and almost 75% of operators have small fleets, these operators are prejudiced. The DfT notes this concern and will address this in the rules. We envisage that the introduction of tribunal rules will make the process simpler to follow.

Another respondent suggested investigating whether Traffic Commissioners should have powers to exclude advocates that they do not believe are sufficiently capable of acting in an operator’s interest. Legally qualified representatives with rights of audience conferred upon them are authorised and regulated to carry out reserved legal activities; any other person seeking to represent a party to the hearing (usually a transport consultant) does not have the right of audience and must seek permission in advance from the presiding traffic commissioner.

In appropriate cases, Traffic Commissioners may refuse to hear representatives other than from counsel or solicitors. This distinction is based on the fact that, unlike that of other representatives, the conduct of counsel and solicitors is regulated in England and Wales by the Bar Standards Board or the Solicitors Regulation Authority, and in Scotland by the Law Society of Scotland or the Faculty of Advocates, and therefore the submissions from counsel and solicitors carry more weight than those from other representatives.

Transport consultants and representatives who are not counsel or solicitors are nevertheless expected to display a degree of competence and openness with the tribunal and, if they fail in that regard, it is open to the traffic commissioner to indicate that the person may not act as an advocate at public inquiries in the future.

There was a comment that the introduction of formal tribunal rules would create the very unusual situation where the tribunal would also be the regulator. The government can confirm that the current arrangements see the tribunal act as the regulator.

Rules for procedures are common across tribunals and their introduction will provide assistance to parties. The Traffic Commissioners are currently the regulator of the industry and the introduction of rules does not change the current position.

Other comments

Summary of responses

There was a suggestion that there should be more checks on applications by people that are banned or whose business is about to fail; Traffic Commissioners can and do check insolvency records.

Another respondent suggested that online training should be given to all applicants prior to commencing operations. Currently, operators are offered the opportunity to attend seminars run by the Driver and Vehicle Standards Agency (DVSA) after a licence is granted; however, standard licence holders must have suitably qualified transport managers at the time of application.

This is something we will continue to work on with Traffic Commissioners and the DVSA. The DVSA will continue its educational role, and we understand that it is seeking to improve the availability of high-quality training for operators and the wider transport community.

Another respondent suggested that the need for primary legislation in this area offers the government an opportunity to carry out reforms to the role of the Traffic Commissioners, including transferring their jurisdiction to the Ministry of Justice, which would enable them to demonstrate their judicial independence. We have no plans to do this but a tailored review is in progress.

Another response urged the government to progress recommendations:

• 4 – on a single Great Britain traffic area

• 9 – on Traffic Commissioners’ involvement in environmental matters

of the Traffic Commissioners triennial review 2015: implementation plan. We have no immediate plans to do this but a tailored review is in progress.