Approval process for franchising proposals

The LTA needs to be content that all the implications of their franchising proposal has been thoroughly considered prior to their decision to proceed with making the framework.

The franchising framework and franchising assessment are subject to a high level of scrutiny. The role of the independent panel is to provide an additional safeguard to ensure that the local transport authority has complied with the relevant procedural requirements, had regard to the contents of statutory guidance issued by Scottish Ministers, given appropriate weight to matters prescribed in the 2024 Regulations when developing their franchising proposals, and have reached a reasonable conclusion in deciding to make the proposed franchising framework, based on evidence. These safeguards are also designed to protect passengers and the wider bus network from potential damage of a poorly developed franchise.

Notification to the Traffic Commissioner

Following the consultation and decision to proceed with the framework, the LTA must, under section 13I(2)(a), request the Traffic Commissioner (TC) to convene a panel under section 13J(2) for the purpose of considering whether to approve the making of the proposed franchising framework.

The request should be in the form of a formal letter from a senior official, such as the Chief Executive of the LTA to the TC requesting the formation of a panel to approve the proposed making of a franchising framework. The letter should include a statement that the LTA considers that the proposed framework will contribute to the implementation of their relevant general policies, and a copy of the following documents:

  • the proposed franchising framework,
  • a report of the franchising assessment (or most recent assessment) prepared under section 13E,
  • the report obtained from the auditor under section 13F,
  • those other documents (if any) that the LTA made available to consultees as part of the consultation process under section 13G,
  • a summary of the responses received to the consultation carried out under section 13G and any action that was taken to address the responses, and
  • a description and explanation of any modifications made to the proposed franchising framework.

Where a decision has been made not to prepare a new assessment following modifications, the LTA should include a statement of their reasoning. The LTA should also provide the TC with a list of consultees, and their contact details, to forward a copy of the notice to.

Notice issued by the Traffic Commissioner

The TC must give notice of the LTA’s intention to seek approval for its proposed franchising framework. The design of the notice will be in such a manner as the Commissioner considers appropriate for bringing to the attention of persons in the area of the authority. However, there is specific information that must be stated in the notice: -

  • the name of the LTA
  • a description of the proposed franchising framework that the LTA is seeking approval to make
  • a link to the documents listed in section 13I(3) of the 2001 Act (in electronic format), and
  • a statement explaining that a request to present oral evidence must: -
  1. be made in writing within the period of 28 days beginning with the day after the day on which the notice is issued by the TC; and
  2. includes a summary of the oral evidence which the person wishes to present.
  • a panel will be formed to consider the proposal, and persons may request an opportunity to present oral evidence to the panel.

The requirements on the TC to issue notices in respect of any new franchising proposals which are set out in 2024 Regulations. The purpose of the notices is to make people aware of an LTA’s proposals to make, vary or revoke a franchising framework, and to allow them an opportunity to make representations in relation to those proposals.

Individuals have 28 days beginning the day after the notice is issued by the TC to make representations in relation to an LTA’s franchising proposals.

Traffic Commissioner appointing a Panel

Under section 13J(2)(b) of the 2001 Act, the TC has to convene a panel of three members to decide whether or not to approve the making of the proposed framework.

The 2024 Regulations sets out the appointment process for panel members, including the eligibility criteria to become a panel member. This is to ensure that panel members have the appropriate knowledge and experience, and any real or perceived conflicts of interest are avoided. Decisions around the timing of the appointment process for panel members will be a matter for the TC to determine.

The 2024 Regulations also allows the TC to provide guidance to the panel as to the exercise of their functions under the 2001 Act and the Regulations.

Operation of the Panel

Once a panel has been appointed, the TC will provide the panel members copies of the documentation provided by the LTA. The TC must also provide the panel any representations made to them, and any requests to present oral evidence to the panel, received in response to the notice regarding the franchising proposal.

The panel will review all the information provided by the TC and make a decision as to whether to hold evidence sessions. This may be a result of a request made in representations to the TC or where more than one request to give oral evidence has been submitted to the panel.

Evidence sessions

If the panel receives a request to present oral evidence by an operator of a local service within the area in which the franchise proposals apply, or the LTA making the proposal, or from a person described under section 13G of the 2001 Act who, in the Panel’s opinion, ought to have been consulted about the proposals, then the panel must hold an oral evidence session. Where a request to present oral evidence is submitted by any other persons, the panel may decide to hold an oral evidence session.

Where more than one request has been received, the panel may decide to hold one or more evidence sessions.

The panel may determine the procedure to be followed in an oral evidence sessions, which must be held in public to ensure transparency, unless the panel determines that any person is to be excluded from a session or part of a session where the information likely to be disclosed is of a confidential or commercially sensitive nature.

Where a panel requires written evidence to be given by any person other than the LTA seeking approval of the proposed framework then the panel must send a copy of that evidence to the LTA.

In a situation where an oral evidence session is required the panel will issue a notice under regulation 11(1) of the 2024 Regulations. Information to be included in a notice can be found in Appendix B.

Decision of the panel

In making its decision under section 13J(4) or 13O(4) of the 2001 Act, the panel must consider whether the LTA has:

  • complied with the process set out in section 13C(1),
  • had regard to the guidance issued by Scottish Ministers under section 13E(5),
  • given appropriate weight to any matter prescribed for the purposes of this section, and
  • otherwise, reached a reasonable conclusion in deciding to make the proposed franchising framework.

This means that the LTA’s franchising assessment will need to have considered the deliverability, financial sustainability, and affordability of its franchising framework. The authority also needs to have considered the likely effect of making a proposed franchise framework on its existing bus network, neighbouring LTAs’ networks, and on the local economy and community, including possible benefits to the local community in terms of improving access to employment, healthcare, and educational opportunities.

The panel has up to six months beginning on the date on which the panel is convened to make a decision, although this can be extended to 12 months should the panel issue a notice to the TC. The panel will decide whether to:

  • approve the making of the proposed franchising framework
  • approve the making of the framework, subject to modifications, or
  • reject the framework.

Next Steps

If the panel approves the LTA’s franchising proposals without any modifications, then the LTA has up to six months to make their franchising framework.

Where the panel has given conditional approval to the LTA’s proposals subject to modifications, the LTA will need to apply the necessary modifications before they can proceed to make their franchise. This must be done in the six-month period as mentioned above.

There is no appeal against decisions made by the panel. If the panel rejects a franchising framework, the LTA will need to carefully consider the panel’s decision and determine if they wish to continue with their intention to franchise. If they do wish to continue, they will need to review and amend their franchising framework and assessment before undertaking the franchising process again for the new proposals, before reapplying to the panel. It is for the LTA to decide what is best to address any transport challenges in their local areas.

 The LTA cannot resubmit the same franchising framework if it has already been rejected by the panel.