Local Transport Bill [HL]

My noble friend Lord Rosser has made some interesting and valid points, but in the end I am not convinced by the entirety of his argument. A quality contracts scheme must in current circumstances be regarded as something of an experiment. No one has yet tried one, and although the noble Lord referred to London and there are perhaps continental examples where a similar system is in force, we are very much at the experimental stage. Those are places where there has long been a publicly operated network, which has then been franchised out to private operators. A quality contracts scheme would replace deregulated services, and the task of setting up a regulated network from scratch is of a very different order from the task of adapting an existing one. It could well be that a quality contracts scheme is set up which simply does not work. ““Very well””, you may say, ““the local authority can always revoke it””, but institutional inertia may set in, and those who have a vested interest in keeping it going may seek to have their way. Other cases will be less clear-cut. The scheme may not be doing very well, not at all well even, but the local authority may still be optimistic that, given a bit more time, it will succeed. In the mean time, bus operators may be champing at the bit, noticing all the mistakes that the authority is making, but powerless to put them right. Under the current legislation, the local authority would effectively have to start again from scratch if it wanted a scheme to continue in force. In response to comments from stakeholders, the Bill provides a mechanism to enable a scheme to be continued, with a modified process for approval. At the end of the period for which the scheme is approved, which may not exceed 10 years, for it to continue in force it must be reviewed and a further consultation take place to ensure that it has delivered at least some of what was promised, and is still relevant and likely to deliver more. This new process provides that if the scheme will not expand in scope and not involve new areas or new bus services, it can go ahead without the board’s approval, though with an appeal mechanism. If it will expand, the approval of the board or, in Wales, the Ministers, will still be necessary. The second amendment in this group concerns the length of individual contracts rather than the whole scheme. In the Transport Act 2000, the contract length is set at five years and the scheme at 10 years. There were many representations from local transport authorities that five years was too short for a large-scale, good-value bus contract, and we tried to respond to those. I understand that my noble friend’s point is that a maximum length is set out in community legislation. That being the case, however, it need not be set in our own legislation. I cannot follow the noble Lord’s argument that local authorities should be able to take advantage of the extra 50 per cent that is allowed in some circumstances under the new EC regulation, which will come into force in 12 months. A contract to run a bus network, or part of a bus network, is not comparable to designing, building and operating a contract for a light rail system. The Community regulation recognises the difference by specifying a maximum of 15 years for rail contracts and 10 years for bus contracts. The extra 50 per cent on either limit for significant assets is not likely to be relevant in the case of a contract to run bus services, or even a whole bus network. There are many good arguments why a private company should not be given such a lengthy contract to run a public service. We are not persuaded by the noble Lord’s arguments, and I hope that he will withdraw his amendment.