Hansard

None of us can have failed to notice that, for the past few months, minimum frequencies and maximum fares in quality partnerships have been the subject of wide and intense discussion between all the parties that are interested in delivering high-quality bus services—MSPs, bus operators, local transport authorities, the SPTE, voluntary bodies and the Office of Fair Trading. The evidence that was given at stage 1 has provoked an enormous amount of discussion.

The Executive's response is based on careful consideration of the range of issues that Janis Hughes has put before us this morning. This matter goes to the heart of the bill—the philosophy underlying the parts of it that deal with buses. I want to elaborate on the issue at length because, as Janis Hughes said, it is a fundamental aspect of the bill.

At the outset, I want to clarify that I have been persuaded that minimum frequencies should be capable of being included in quality partnerships. There are strong public-interest arguments for that. Some of Janis Hughes's amendments aim to achieve that end, but they also cover maximum fares and it is not possible to separate the two issues.

Executive amendments 59 and 60 would achieve the inclusion of minimum frequencies in quality partnerships. Once I have explained the background, I hope that those amendments will be acceptable to Janis Hughes and to the committee.

We believe that the new toolkit for local authorities includes two separate approaches. Quality partnerships, which—unlike the current voluntary arrangements—will be statutory, will give local authorities new powers to set overall standards for bus services as a condition of the use of the facilities provided. We believe that that is clearly in the public interest and that it is encapsulated in the new statutory mechanisms. Quality contracts give local authorities much broader powers and are a different mechanism. They give authorities the power to determine all the details of bus services in a particular area, including fares and timetables.

There are different procedures for the two concepts. Partnerships are entirely a matter for negotiation by local authorities and bus companies and are not referred to ministers for approval. They are to be dealt with wholly at a local level, and the framework for achieving them is set out in the bill. Contracts are a much more far-reaching mechanism and we believe that they should require the consent of the Scottish Executive. That is a significant departure from current practice, although I have lodged amendments to the sections that deal with quality contracts to take on board elements of the discussion that took place over the summer and to respond to the committee's stage 1 report.

I believe strongly that if—in addition to defining minimum frequencies, which is the intention of our amendment—we put maximum fares into a partnership, we would give partnerships some of the key elements of contracts. We should not blur those two concepts.

It is important that the fixed service requirements that we could have under quality contracts go through a proper tendering process. There must be competition between the bus companies because, at the end of the day, the contract process is an exclusive relationship. Only the company that wins the contract gets to operate on the range of routes that are covered. It is important that the overriding set of powers in the contracts does not get blurred into the partnerships.

As the bill stands, quality partnership standards should apply evenly to all the bus operators who play a part. The standards should be set and publicised, and all bus operators should know where they stand. It is a simple test: the operator either meets the specified standards or they cannot use the partnership facilities. Partnerships, being statutory, can be tough. It is a question of how much we should put into the partnerships and how much would be appropriate for the contracts, because they are two different elements. It is worth emphasising that if the authority makes a QP scheme, the bus operators have to give an undertaking to the traffic commissioner that they will meet the specified quality standards; otherwise, they are not allowed in the quality partnership area. It is a tough power, and we think that it should be proportionate.

However, if the local authority had the power to set both the minimum frequencies and the fares, it would be taking a view on every local bus service that was provided in an area or a corridor. Every operator would, in effect, be negotiating fares and minimum frequencies for each service with the local authority. We think that that is the job of a contract; we should not confuse that with partnerships. It is important that we do not make the partnerships overly bureaucratic. A strong process is set out in the contracts—we will come to that later. We want to keep partnerships and contracts separate.

There is an issue about competition law and the attitude of the Office of Fair Trading. We think that broadening the powers under the quality partnerships, as Janis Hughes suggests, could lead to uncertainty about the whole quality partnership mechanism. It could cause delay, as the OFT is likely to become involved, and it potentially makes partnerships less attractive. We believe that if fares and affordability issues are seen as essential and core, the authority should think about a quality contract, rather than a quality partnership. The amendments that I will lodge on quality contracts will clarify the process by which authorities set them up.

At the heart of this discussion is balance, and making available to local authorities a toolkit of different options, to be used where appropriate. Quality partnerships are new powers. Because they do not represent an exclusive contract, they allow local authorities the opportunity to require bus operators to meet certain standards—a significant step forward—without going through the tendering process that is appropriate in contracts. The two concepts are different. Local authorities can be brought fully into play. It is about using traffic management, enforceable conditions and the local facilities that local authorities can bring to the table. However, it is also about delivering a degree of flexibility to the bus operators, enabling them to play to their strengths, to use their operational judgment and to improve the quality of services for all concerned.

Quality partnerships enable local authorities and bus operators to invest with confidence. They mean that, where it would undermine the quality standard, low-quality bus operators cannot make use of the free facilities provided.

I hope that that has been helpful, that it has explained fully where the Executive is coming from and that amendment 59 on minimum frequencies moves a long way towards what the committee was after when it produced its report at stage 1. We have considered the matter at great length. I hope that the committee agrees that we have struck the right balance and that it will consider the amendments in the context of the other amendments on contracts.

I believe that the aims of Cathy Jamieson's amendment 58, which is also in this group, would best be achieved through negotiations between employees, their representatives, trade unions and operators. We might be straying into employment law, which is another matter and should not be dealt with in the bus elements of the bill. Having said that, we want to put on record that the Executive believes that we need a modernised bus industry. The bill sets a new challenge for operators. A stakeholder approach is important. Good employer-employee relationships should be developed. We need a motivated and trained work force, not only in quality partnerships but throughout the whole bus industry. I agree with the aspirations behind Cathy Jamieson's amendment, but I do not agree that it is appropriate to include the detail in the bill.