Bus powers introduced by the Transport (Scotland) Act 2019

Local transport authority run bus services

The Transport Act 1985 made substantial changes to the model for bus service delivery across the UK by deregulating bus service provision and not allowing LTAs to provide bus services directly, except in certain specified circumstances. However, section 34 of the 2019 Act inserts a new section 2A into the 2001 Act, which came into force on 24 June 2022. This new section enables LTAs to provide services for the carriage of passengers by road using vehicles that require a Public Service Vehicle (PSV) operator’s licence to do so.

To do this, the LTA must be satisfied that the provision of such services will contribute to the implementation of their relevant general policies (as defined in the 2001 Act). Section 2A is not restrictive in the way LTAs can run their own buses, enabling them to use the power as they see fit within the wider context of their obligations. For example, the LTA may choose to provide services directly, meaning they are the owner of any associated assets (e.g., vehicles), or through an arm’s length external organisation. Under the latter scenario, the LTA can provide bus services through an independent commercial organisation with its own management board where the LTA is the main shareholder but is not involved in the day-to-day running of the buses. This would be broadly similar to the model under which Lothian Buses currently operates.

The 2019 Act does not provide LTAs with protection against competition when running their own service or if a competitor runs against them. Any proposed commercial LTA run service would need to make an entry into the market just as any commercial operator would do. Any LTA run service operating for commercial purposes would need to make a market entry compliant with competition law and associated guidance.

Bus Services Improvement Partnerships (BSIPs)

For bus services, whilst this can be done on a voluntary basis, such an approach may have limitations, such as a lack of enforcement in agreed service standards. While the 2001 Act introduced a form of statutory partnership, in the form of Quality Partnerships (QPs), there was limited uptake due to the restrictions of the model.

Section 35 of the 2019 Act addresses this by replacing QPs in the 2001 Act with a provision for a new type of statutory partnership in the form of a Bus Services Improvement Partnership (BSIP). The BSIP model within the 2019 Act is similar to the Enhanced Partnership model introduced by the Bus Services Act 2017. This model is different from the QP model in three ways: –

Firstly, it places a duty on the local transport authorities to invest in some way (whether through certain facilities or taking certain measures to assist operators, such as implementing policies on parking, for example).
Secondly, the range of standards in a BSIP is beyond that allowed in the QP, including being able to agree frequencies on certain routes and/or setting maximum fare levels.
Thirdly, and most fundamentally, the BSIP model is designed to be a collaborative partnership that provides a framework for long-term commitment to service improvements.

The BSIP model also provides for operators to be involved in the preparation of the partnership plans and schemes. Bus operators can have a say on whether the plans or schemes (see below), including proposed service standards for the qualifying operators of the BSIP area, are to proceed.

BSIP Plans

A BSIP plan may cover all or part of the local transport authority area(s). It must also:

Specify the area covered and the period to which it relates
Provide an analysis of local services
Specify policies relating to local services
Set out objectives on quality and effectiveness of local services
Set out how the scheme will meet these objectives
Describe the intended effect of any partnership scheme on adjacent areas
Specify how the views of users are to be obtained on the effectiveness of the plan and partnership scheme; and
Specify how to review the partnership plan.

BSIP Schemes

At the same time as making a BSIP plan, an LTA must also make one or more BSIP schemes relating to the whole or part of the area to which the plan relates. A scheme will:

Specify the area covered and period of time to which the scheme relates
Impose one or more service standards for services having one or more stopping places in the area, (and these service standards may be route service standards that cover frequency and timings of local services, or operational service standards which

relate to any other matter such as the vehicles to be used to provide services or ticketing); and

Specify one or more facilities to be provided by the LTA (such as infrastructure improvements) or measures to be taken by the LTA (such as improving parking enforcement or other action to incentivise bus use).

Detailed guidance on BSIP plans and schemes, including their development, operation, variation, and revocation will be published this year.

Voluntary Partnerships

As highlighted on page 8, local transport authorities can still decide to put in place an informal partnership, commonly known as a voluntary partnership, where they can attain the benefits of a partnership approach without having to agree any legal process. There are several voluntary partnerships across Scotland, some of which are developing ambitious schemes that target patronage growth, punctuality, and journey times, whilst also working towards a BSIP, such as the North East Bus Alliance and the Glasgow City Region Bus Partnership.

Local Services Franchises

Franchising is a system that allows an LTA to award exclusive rights to run certain bus services to the most competitive bidder for a set period. During this period, no other operator can run those services. Franchising via the statutory Quality Contract model has been available in Scotland under the 2001 Act, however, these powers were never used.

Section 38 of the 2019 Act replaces the statutory Quality Contract model in the 2001 Act with a new franchising model. This new model is designed to enable an LTA to streamline services and develop better integration and control over fares. It also increases the range of situations in which an LTA can consider using the franchising option. The system is designed to ensure that appropriate checks and balances are in place to assess whether an LTA’s franchise proposals are robust and deliverable. This structured approach will ensure that decision making is more transparent via a process of rigorous assessment and evidence-based analysis.

Detailed guidance on local services franchising, including the development, operation, variation, and revocation of a franchise will be published later this year.

There are several different franchise models that have been adopted in the UK and across Europe. The most widely used model is like that in London, in which all the services are franchised to a number of different operators. The franchising model provided by the 2019 Act involves the LTA putting in place an overarching franchising framework beneath which it can enter into separate franchise agreements with bus operators, similar to the approach taken by Transport for Greater Manchester’s recently commenced bus franchise.

Information Powers within the 2001 Act (introduced by the 2019 Act)

Access to relevant information for a BSIP or franchising framework

Sections 3K and 13R of the 2001 Act (inserted by the 2019 Act) provide LTAs with powers to gather relevant information from operators in connection with the preparation and reviewing of a BSIP plan or scheme and /or a franchising framework. However, it should be noted that information required under these provisions may only be used for the specific purpose for which it was gathered, and may only be disclosed to the persons listed in sections 3K(6) and 13R(6) (i.e. an LTA or persons providing services to an LTA in connection with the function being exercised).

On 7 December, the Scottish Government laid “The Bus Services Improvement Partnerships and Local Services Franchises (Provision of Information) (Scotland) Regulations 2023”, which set out the categories of relevant information that can be requested by an authority in connection with their BSIP and franchising functions, respectively. Seeking information (such as passenger data, revenue, or information on vehicles) from operators is one of the first steps an LTA will need to undertake if they wish to consider either a BSIP or franchise. The regulations are intended to come into force on 1 April 2024.

It is recommended that an LTA engages proactively with local operators before and throughout the information request process to understand the ways in which operators hold the relevant information and how long it may take them to collate and provide it.

The LTA may also wish to supplement the information gathered from operators with other information to ensure they have robust evidence on which to make decisions regarding the most suitable approach to improve service delivery. This could include information gathered from passenger surveys or information about local travel patterns, as well as other research and evidence about the benefits or impacts of changes to bus services.

Information-sharing process where operators intend to vary or cancel a service

Section 39 of the 2019 Act introduced a new information-sharing process via sections 6ZA and 6ZB of the 1985 Act, which specifically relates to the local bus service registration process. The new process applies where an operator proposes to vary or cancel the registration of a local bus service. When the operator notifies an affected authority of their proposed variation or cancellation, the affected authority can require the operator to provide them with certain information (e.g., number of journeys, fare types, etc.). This information can then be used by the affected authority to determine whether and to what extent, they can provide support for replacement services.

Full details of the information that an authority may be able to request is set out in “The Public Service Vehicles (Registration of Local Services) (Provision of Service Information) (Scotland) Regulations 2022”. In limited circumstances, the affected authority may also be able to share the information with other affected authorities, and with people who may wish to bid to provide a service to supplement or replace the one being varied or withdrawn.

Smart and Integrated Ticketing

The 2019 Act includes a number of provisions to enhance LTA provision of smart and integrated ticketing. These include extending LTA ticketing arrangements and ticketing schemes to include connecting rail and ferry services, in addition to local bus services. Rail and ferry services can only be included in ticketing arrangements and ticketing schemes if the operator on the rail or ferry service in question consents. This is different to bus operators in ticketing schemes, whereby they are required to implement the ticketing arrangements.

Section 42 of the 2019 Act allows the Scottish Ministers to set a national technological standard for the implementation and operation of smart ticketing arrangements. The standard is particularly relevant to ticketing schemes made under section 29 of the 2001 Act. Once a national technological standard is set, future ticketing schemes must require any arrangements made under the schemes to comply with the standard.

The Scottish Ministers must consult the National Smart Ticketing Advisory Board (“NSTAB”) before specifying any national technological standard. NSTAB commenced operation in November 2023 and is a pioneering board comprising different modes, transport authorities, users, and experts to advise Scottish Ministers on the future of smart ticketing.

Section 44 of the 2019 Act also makes changes to what a ticketing scheme can include and the process for making one. In developing a ticketing scheme, LTAs must:

Ensure the scheme uses smart ticketing arrangements that comply with the national technological standard for smart ticketing (when specified)
Co-operate with one another and consider making ticketing schemes that will facilitate travel, or the adoption of similar ticketing arrangements in adjoining areas; and
Be aware of the changes to the consultation requirements when establishing a scheme.

The 2019 Act also places a duty on LTAs to produce annual reports on ticketing arrangements and schemes. These reports should include information on the use of the Act powers relating to ticketing arrangements and schemes, whether ticketing schemes comply with the national technological standard, and whether the LTA has made, varied, or revoked any ticketing schemes during the year.

Passenger information and bus open data

Section 40 of the 2019 Act confers a power on the Scottish Ministers to introduce regulations that require bus operators, LTAs and the Scottish Traffic Commissioner to provide information about local bus services to improve the availability and standard of passenger journey planning information (including provision for the information to be made available free of charge and without restrictions on its use and disclosure). This includes information about routes, timetables, stopping places, fares, and tickets, in addition to information about the operation of services, including real time information about services.

Transport Scotland will consult on section 40 of the 2019 Act in due course to inform the development of the policy and regulations requiring information about bus services. Acknowledging the technology advancements in recent years and operators’ positive participation already through services such as Traveline Scotland, we will seek to enhance the range, amount, and quality of voluntary data being provided by operators, so passengers benefit from enhanced data as soon as possible.

It is our intention that this will complement the bus open data policy in England, so cross-border operators are not unfairly impacted.

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