Committee
Net Zero, Energy and Transport Committee 29 October 2024
29 Oct 2024 · S6 · Net Zero, Energy and Transport Committee
Item of business
Subordinate Legislation
Local Services Franchises (Traffic Commissioner Notices and Panels) (Scotland) Regulations 2024 (SSI 2024/229)
Good morning. Thank you for inviting me to discuss the regulations. As we know, franchising is an important tool for local transport authorities to improve services in their area. However, it is also a significant intervention in the local bus market. The franchising provisions in the Transport (Scotland) Act 2019 set out a new franchising model that seeks to deliver greater scrutiny and transparency in the franchising process. A key aspect of that is the inclusion of a final approval stage that is external to the authority, which assesses the proposals before the franchise can take effect. The act provides that safeguard to ensure that local authority transport authorities’ franchising proposals have been carefully considered. Rather than providing for the decision to be made by the Scottish ministers, the 2019 act provides for an independent panel to be appointed by the traffic commissioner, with the intention of depoliticising the final decision-making process. Those measures were included in the Transport (Scotland) Bill at its introduction, they remained throughout the bill stages and they were agreed to by Parliament. Parliament also agreed that detail about the operation of the panels would be set out in regulations. The regulations that we are considering set out that detail and are fundamental to the operation of the franchise process in Scotland, not least because they will give local transport authorities certainty about how their franchising proposals will be considered. The regulations make provision on a range of administrative and procedural matters in order to provide clarity and legal certainty on how panels should operate, and they include eligibility criteria that preclude the appointment to a panel of anybody who might be employed by operators that are affected by franchising proposals or who could otherwise not act impartially in deciding whether to approve a franchising framework. The approach is designed to secure the independence of the panel’s decision making. The regulations and the 2019 act provide guidance to panels on what they must consider when assessing a local transport authority’s franchising proposals and provide further clarity on what is and is not relevant to the panel’s decision making. We have engaged closely on the development of the regulations with key stakeholders, including local transport authorities and the traffic commissioner’s office, and their involvement has been crucial in creating procedures that will ensure that the approval process is transparent and impartial. There is a keen appetite among a range of parties and stakeholders—including MSPs, some of whom are sitting here today—for franchising to be available to local transport authorities. Calling for amendments to legislation or failing to pass the regulations will result in Scotland falling further behind in delivering franchising to improve services for passengers, as any proposal that would seek to significantly amend the panel process as set out in the 2019 act would require primary legislation. As committee members know, policy development of that sort can be significant and would not be completed before the end of this parliamentary session. As I have said, the regulations make important provision on the operation of panels as envisaged by Parliament when it passed the 2019 act, and annulling them could result in local transport authorities deciding to delay any franchising proposals, because of legislative uncertainty. I am happy to answer any questions that members might have.
In the same item of business
The Convener (Edward Mountain)
Con
Good morning, and welcome to the 31st meeting in 2024 of the Net Zero, Energy and Transport Committee. The first agenda item for consideration is evidence on...
The Minister for Agriculture and Connectivity (Jim Fairlie)
SNP
Good morning. Thank you for inviting me to discuss the regulations. As we know, franchising is an important tool for local transport authorities to improve s...
The Convener
Con
When I was welcoming people to the committee, I should also have welcomed Graham Simpson, who has joined us today. He will get to ask questions at the end of...
Jim Fairlie
SNP
I was not even sitting in the Parliament in 2019, so I cannot answer for the decision-making process at the time, but I trust the parliamentary procedure, an...
The Convener
Con
There were a lot of amendments to the 2019 act—I seem to remember sitting in the committee and dealing with more than 100 amendments on the workplace parking...
Jim Fairlie
SNP
We would not be minded to change just this provision. We would have to change the act, which would take us beyond 2026.
The Convener
Con
Why would you have to change the whole act, if this is just a part of it?
Jim Fairlie
SNP
Because it is set in primary legislation. It is part of the 2019 act, so we would have to go back to the beginning and start again.
The Convener
Con
Can you not change a section of an act through primary legislation? It looks as if Bridget Bryden wants to help me out—I might have got this confused.
Bridget Bryden (Scottish Government)
It would be possible to make such a change, but we would have to look at the whole Scottish franchising model. The provision has been built in as a safeguard...
The Convener
Con
Committee members have a lot of questions. I will bring in Mark Ruskell first, to be followed by Douglas Lumsden and Monica Lennon.
Mark Ruskell (Mid Scotland and Fife) (Green)
Green
Good morning. Minister, will you explain why a franchising scheme that is approved by a panel is less likely to be subject to legal challenge than one that i...
Jim Fairlie
SNP
Such a scheme could still be challenged legally but, if it has gone through a panel, that panel will have looked at the requirement for a franchise to be est...
Mark Ruskell
Green
In relation to the risk, you will understand that there is concern about the panel model, and there is not good evidence that that kind of system has worked ...
Jim Fairlie
SNP
Under that approach, a scheme is robustly scrutinised by an independent body that has no political input and is separate from the organisations and the autho...
Mark Ruskell
Green
Is there evidence that panels reduce the risk?
Jim Fairlie
SNP
Clearly, this is the first one that we have done, so we do not have evidence. As I said, a scheme could still be legally challenged, but this is a safeguard ...
Mark Ruskell
Green
You said that we are where we are with the legislation, but 2019 was some time ago, and a lot of water has flowed under the bridge with progress on bus franc...
Jim Fairlie
SNP
Would I personally do that? I would not answer that question right now; I would go back and have a much broader look at everything right back to 2019. I have...
Mark Ruskell
Green
My final question is about the guidance that could come on the back of this Scottish statutory instrument. You understand the concerns that have been raised ...
Jim Fairlie
SNP
We will have a memorandum of understanding, and the guidance is under development. I suspect that somebody will ask whether franchising could go ahead whethe...
The Convener
Con
Douglas Lumsden has some questions.
Douglas Lumsden (North East Scotland) (Con)
Con
I will pick up on that point first. Minister, you seem to be saying that, if the instrument is annulled, the panels will continue anyway.
Jim Fairlie
SNP
Yes—that is in primary legislation.
Douglas Lumsden
Con
If the instrument was annulled, what would the Government’s response be? What would its next step be?
Jim Fairlie
SNP
If the regulations are to be annulled, I assure you that the rest of my day will be scrapped—let me put it that way. We will go away and have a long and deta...
Douglas Lumsden
Con
You say that that could happen. Would it happen, or would there be changes? I am slightly confused because such a system was tried in England, but it did not...
Jim Fairlie
SNP
The process that you talk about being used down south is the Nexus process, which was different from this one. That looked at financial aspects; we are looki...
Douglas Lumsden
Con
Yes, but after speaking to your neighbours, you would think that you would learn some lessons. From your evidence at question 6, it seems that the Government...
Jim Fairlie
SNP
We could revisit the act if people wanted us to do that, but we would have to forget about franchising between now and 2026, because we would have to go back...