Local Bus Services - Is an Enhanced Partnership your next destination?

 

Introduced by the Bus Services Act 2017 (the “2017 Act”), Enhanced Partnerships (“EP's”) build upon previous arrangements in the sector including voluntary partnerships or more formal statutory partnerships implemented under earlier legislation. An EP will be initiated by a sponsor Local Transport Authority (”LTA”). The project can involve other local authorities including those having just highways functions and will be developed in conjunction with bus operators.

Now, the government wants LTAs to move quickly developing and implementing partnerships of this kind. And future grant funding is going to be dependant upon a successful implementation. Freeth’s team of transport law advisors are ready to support EP projects with advice and tools that will help LTAs progress schemes in the way expected of them.An EP takes the concept of bus service partnership to a higher level, involving an overarching plan (an “EP Plan”) with, under that plan, one or more individual schemes (each to be known as an “EP Scheme”).An EP scheme may relate to a wide geographic area such as a town or be focussed upon as small an area as a particular housing estate.The objectives of an EP are to be developed by agreement between the LTA other participating local authorities who have an interest in the proposed plan together with bus  operators. A key objective will be to develop a shared vision document (to be known as an “EP Plan”) articulating a vision for local bus services within the area served by the EP Plan and one or more EP Schemes  that are developed to implement the vision in specific geographical areas. The EP Plan will reflect the LTA’s Bus Service Improvement Plan – to be developed by this autumn at the latest.The outcomes that are expected to be achieved include more public sector investment in infrastructure on a targeted basis, measures to help address congestion issues affecting bus services and requirements that bus operators will agree to that are calculated to increase bus patronage.

What is the difference between an EP and bus franchising?

Bus franchising has been very much in the news following the decision by the Greater Manchester Elected Mayor to proceed with a scheme of this kind.Under franchising, responsibility for determining what services are to be provided where and by what routes and at what fares becomes the responsibility of the authority promoting the scheme. Bus operators will bid to run, usually, packages of services within a defined geographic area under a service contract in return for which they receive a an operating fee from the authority.Under an EP Scheme bus operators will have had a say in the development of the overall vision, with the bus operations remaining within the ownership of the operator. The operator retains the revenue risk involved in operating the services as well as meeting all operating costs. In addition, the operator will have to operate services in the area that is the subject of the EP Scheme in line with requirements made of operators in the detail of the EP Scheme.An EP Scheme will usually commit an LTA to providing investment in infrastructure that is calculated to support local use of bus services (such as improved interchange facilities, highway improvements and even measures taken such as a traffic orders restricting use of roads by other vehicles and bus prioritisation measures).In return, operators will agree to accept common branding with other operators within the scheme area and are likely to agree increased cooperation with other operators over timetabling. Co-operation in the area of accepting each other’s tickets and the acceptance of multi-operator ticketing schemes are also likely to feature as a key characteristic in EP Schemes. 

Why are we going to hear more about enhanced partnerships at this time?When the 2017 Act was passed, EPs became available to all LTAs to explore as an alternative to franchising which has also been introduced through that Act. Crucially, a scheme of this kind can only be taken forward with the support of the majority of bus operators within a given area.When in March of this year the government published a new bus strategy they linked, for the first time, various source of grants available in the sector to pursuit by all LTAs of either franchising or EPs. £3bn is committed over the medium term to support investment in local bus services – predominantly for the acquisition of clean energy powered vehicles and in the short term, a minimum of £1bn of Covid-19 relief grant funding and which is now expected to be extended and available for some time yet. Both sources of funding will, however, only be available to LTAs that have committed to Enhanced Partnerships if not yet ready to move to bus franchising by the end of June of this year.The LTA is expected to have achieved sufficient consensus with operators concerning an EP  approach  to be able to commit to the publication of  an EP Notice of Intent by the June 30^th deadline. This will signify the authority’s commitment to the project. 

What is an LTA expected to do in developing an enhanced partnership?There is a defined route to be taken by an LTA that decides to initiate a project of this kind. Most likely, it will have consulted informally with operators prior to initiating formal work. It will also have consulted with other stakeholders such as passenger consultation groups.Once an authority decides to initiate an EP it must follow a process prescribed by the legislation taking into account guidance published by DfT.  A significant number of requirements of that guidance will be statutory in nature meaning that it should be followed by the authority promoting the EP.In the early stages of the development of an EP, operators may be required by the LTA to provide information relating to current service operations that they hold and which is of interest to the LTA as it develops proposals for the EP. Operators must comply with information requests when these are made within guidelines set by the EP guidanceAn operator need not participate in the development of an EP but if any EP Schemes that are contemplated under the EP involve routes that the operator provides services on, that operator will want to participate as, once the scheme is implemented, the services provided (unless meeting a limited range of exemptions) will have to meet the requirements of the scheme. The operator might then be required to accept multi-operator tickets, include particular branding in its marketing material and only run services against a timetable that is coordinated with that of other operators. How will an EP plan proposal fit in with competition law requirements?There are a range of competition issues that can affect bus operations ranging from ticketing to ensuring operators have fair access to bus stations.EP legislation has been designed with competition law requirements in mind, An LTA will be required to produce and publish an opinion on compatibility with competition legislation. 

Will an EP proposal squeeze out small and medium-sized bus operators?Again this has been taken into account. The legislation is designed to ensure that small and medium-sized operators can play an effective part in both the development of an EP and then, its operation.A number of decisions concerning the detail of an EP have to be agreed between the LTA and operators and a weighted voting system will need to be devised to ensure that there is appropriate recognition of the interests of all operators affected.An open issue at the present time is how capital investment requirements that will have to be borne by operators can be effectively addressed by those that are small or medium-sized in scale. This brings us back to government thinking on the targeting of grant funding available to the sector where, undoubtedly, proposals will follow that support the investment requirements where that support is required. 

How can we find out more?

Please get in touch. Freeths provides legal services that support the development and progression through to adoption of statutory partnership schemes in the bus sector. 

Services that we can provide include

• Workshop SessionsSharing with you our experience in progressing and implementing schemes of this kind under earlier legislation we can help you to understand the route map to completing an EP. We will draw attention to the outputs required at each stage of the project and the key risk issues that can be encountered.
• Template DocumentationFreeths will have available starting points for a number of documentation requirements necessary for the progression of an EP. This will include a template EP Scheme document, supporting template reports to be available at the significant decision making stages and a risk evaluation document.
• A Compliance ChecklistDeveloped on a continual basis, as each phase of the project is completed the compliance checklist charts in detail each decision taken during the process and is expected to provide compelling evidence of the LTA’s attention to detail together with a demonstration that it has followed the requirements of the legislation and statutory guidance.
• Competition Law OpinionThe mandatory competition law opinion will be developed on a bespoke basis addressing the elements of EP Schemes that are sensitive to competition law considerations.

 Who will lead the Freeths advisory team?Expert practitioner Frank Suttie will lead an advisory team supporting the development of EPs. With experience of working in the local transport sector prior to qualifying as a Solicitor, Frank has undertaken numerous relevant engagements– most recently for combined authorities and a unitary authority working with a county council in the development of statutory quality partnership schemes.Frank will have the support of a team that includes competition law and highways experts and other relevant disciplines to ensure that LTAs receive relevant and effective advice from Feethinking practitioners.