Transport Act 1985

• (6) Subject to section 68(3) of the 1981 Act (as applied by section 127(4) of this Act), if a London local service is provided in contravention of subsection (1) above, the operator of the service shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale.

London bus services under control of London Regional Transport

36

• (1) A London local service licence is not required for the provision of a London bus service—

• (a) by London Regional Transport or any subsidiary of theirs; or

• (b) by any other person in pursuance of any agreement entered into by London Regional Transport by virtue of section 3(2) or (2A)(a)of the London Regional Transport Act 1984 (referred to below in this section as the 1984 Act).

• (2) Where—

• (a) London Regional Transport or any subsidiary of theirs propose to provide a new bus service which is to be operated wholly or in part as a London bus service or to vary a bus service currently provided by them which is being so operated; or

• (b) London Regional Transport propose to enter into an agreement by virtue of section 3(2) or (2A)(a)of the 1984 Act for the provision of such a new bus service by any other person or to agree to a variation in any bus service currently provided in pursuance of any such agreement which is being so operated;

then, before deciding on, or on the provisions to be contained in any such agreement with respect to, or on any variation affecting, any relevant aspects of that service London Regional Transport shall, so far as the service is or is to be provided in London, consult with the commissioner or commissioners of police concerned, with the local authorities affected, with the Passengers’ Committee and with any other person they think fit.

• (3) In subsection (2) above the reference to relevant aspects of the service is a reference to the route of the service, a terminal point, a point at which passengers may or may not be taken up or set down, or a place at which, or street by the use of which, vehicles used for the service may turn at a terminal point.

• (4) Where—

• (a) London Regional Transport or any subsidiary of theirs propose to discontinue a bus service currently provided by them which is being operated wholly or in part as a London bus service; or

• (b) London Regional Transport propose not to renew any agreement entered into by them by virtue of section 3(2) or (2A)(a) of the 1984 Act for the provision by any other person of any bus service which is being so operated, or to agree to the discontinuance of any such bus service currently provided in pursuance of any such agreement;

then, before any decision is taken to that effect, London Regional Transport shall, so far as the service is provided in London, consult with the local authorities affected, with the Passengers’ Committee and with any other person they think fit.

• (5) Where an agreement entered into by London Regional Transport by virtue of section 3(2) or (2A)(a) of the 1984 Act for the provision of a bus service relates to such a service part only of which is operated as a London bus service, any provision contained in that agreement with respect to the carriage of passengers other than those who are both taken up and set down in London shall be of no effect if or so far as it is inconsistent with any condition for the time being attached under section 8 of this Act to—

• (a) a PSV operator’s licence; or

• (b) a permit under section 22 of this Act;

held by the operator of the service.

• (6) For the purposes of this section the local authorities affected by any proposal with respect to a bus service are any of the following councils, that is to say, the councils of the London boroughs and the Common Council, in whose area there is situated—

• (a) in the case of a proposal to which subsection (2) above applies, any part of the route in question or (as the case may be) the point, place or street in question; or

• (b) in the case of a proposal to which subsection (4) above applies, any part of the route of the service.

• (7) In this section—

• (a) references to a new bus service are references to a bus service which has not been provided continuously since before the date on which this section comes into force (disregarding, in the case of a bus service operated during certain periods of the year only, any period other than one during which the service is due to be operated);

• (b) “the Passengers’ Committee” means the London Regional Passengers’ Committee established under section 40 of the 1984 Act;

• (c) “subsidiary” has the same meaning as in that Act;

and section 6(5) of and paragraph 11(4) of Schedule 5 to that Act shall apply to references in this section to an agreement entered into by London Regional Transport by virtue of section 3(2) or (2A)(a)of that Act as they apply to such references in that Act.

Grant of licences

37

• (1) An application for a London local service licence shall be made in such a form as the metropolitan traffic commissioner may require, and an applicant shall give the commissioner such information as he may reasonably require for disposing of the application.

• (2) Where an application is made for the grant of a London local service licence, the commissioner—

• (a) shall grant the licence unless he is satisfied that to do so would be against the interests of the public; and

• (b) if he grants the licence, shall do so in accordance with the application except to the extent that he is satisfied that to do so would be against the interests of the public.

• (3) In considering under subsection (2) above whether the grant of a licence would be against the interests of the public, or the extent to which the grant of a licence in accordance with the application would be against those interests, the commissioner shall in particular have regard to—

• (a) the transport needs for the time being of London as a whole and of particular communities within London;

• (b) any transport policies or plans which have been made and drawn to his attention by the council of a London borough or by the Common Council; and

• (c) any objections or other representations made to the commissioner in the prescribed manner which in his opinion are relevant.

• (4) The metropolitan traffic commissioner, on granting a London local service licence, shall send notice of the grant, including particulars of the services to be provided under the licence, to the commissioner or commissioners of police concerned and to each of the local authorities affected.

Conditions attached to licences

38

• (1) Subject to subsection (3) below, and to any regulations, the metropolitan traffic commissioner may, on granting a London local service licence, attach to the licence such conditions as he thinks fit having regard to the interests of the public, and in particular to the matters mentioned in section 37(3)(a) to (c) of this Act.

• (2) The conditions that may be attached to a London local service licence by virtue of subsection (1) above include, in particular, such conditions as the commissioner thinks fit for securing—

• (a) that suitable routes are used in providing any service which may be provided under the licence; and

• (b) that passengers are not taken up or are not set down except at specified points, or are not taken up or are not set down between specified points;

and generally for securing the safety and convenience of the public, including persons who are elderly or disabled.

• (3) No condition as to fares shall be attached under this section to a London local service licence.

• (4) The metropolitan traffic commissioner may at any time while a London local service licence is in force vary the licence by—

• (a) altering, in such manner as he thinks fit having regard to the interests of the public, any condition attached to the licence; or

• (b) removing any condition attached to the licence, if he thinks fit having regard to those interests; or

• (c) attaching to the licence any such condition or additional condition as he thinks fit having regard to those interests.

• (5) Where the holder of such a licence makes an application to the commissioner requesting him to exercise his powers under subsection (4) above, the commissioner shall exercise those powers in accordance with the application except to the extent that he is satisfied that to do so would be against the interests of the public.

• (6) Compliance with any condition attached to a London local service licence under this section may be temporarily dispensed with by the commissioner if he is satisfied—

• (a) that compliance with the condition would be unduly onerous by reason of circumstances not foreseen when the condition was attached or, if the condition has been altered, when it was last altered; and

• (b) that such a dispensation would not be against the interests of the public.

• (7) Subject to section 68(3) of the 1981 Act (as applied by section 127(4) of this Act), if a condition attached under this section to a London local service licence is contravened, the holder of the licence shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale.

Grant of licences for certain excursions or tours

39

• (1) This section applies where, in the case of any application for a London local service licence, the metropolitan traffic commissioner is satisfied that the service which the applicant proposes to provide under the licence (“the proposed service”) would be an excursion or tour and is also satisfied either—

• (a) that the proposed service would not compete directly with any authorised London bus service; or

• (b) that the proposed service would operate only to enable passengers to attend special events.

• (2) In subsection (1)(a) above, “authorised London bus service” means—

• (a) any London bus service for which a London local service licence has been granted; and

• (b) any London bus service which, by virtue of section 36(1) of this Act, does not require a London local service licence.

• (3) In any case to which this section applies, sections 35, 37 and 38 of this Act shall apply subject to the modifications provided by the following provisions of this section.

• (4) Section 35(4) of this Act shall not prevent a London local service licence granted in pursuance of this section from having effect for the purposes of the provision of a service by means of a vehicle whose operator holds any such licence or permit as is there mentioned . . ..

• (5) The interests of the public falling to be considered under any provision of section 37 or 38 shall be confined to the interests of the public in securing that only places which are suitable for use as such are used as stopping places for the service in question in London.

The reference above in this subsection to the service in question is a reference to the proposed service or the service provided under any London local service licence granted on an application to which this section applies (as the case may require).

• (6) For the purposes of this section a place is to be regarded as not being suitable for use as a stopping place for any service if the commissioner is satisfied that its use as such would be prejudicial to the safety or convenience of the public.

• (7) Section 37 shall apply with the omission of paragraphs (a) and (b) of subsection (3); and paragraph (c) of that subsection shall apply only in relation to objections or representations made by the commissioner or commissioners of police concerned or by any of the local authorities affected.

• (8) Section 38 shall apply with the omission of subsections (1) and (2), but the metropolitan traffic commissioner in granting a licence on any application to which this section applies may attach to the licence such conditions of a description within section 38(2)(b) as he thinks fit, having regard to any objections or other representations that fall to be considered in relation to that application by virtue of section 37(3)(c), for securing that only places which are suitable for use as such are used as stopping places for the proposed service in London.

• (9) Any condition attached to a licence under subsection (8) above shall be treated for the purposes of section 38(6) and (7) as if it had been attached under that section.

• (10) Every London local service licence granted in pursuance of this section shall include a statement that it is so granted.

Revocation and suspension of licences

40

• (1) Subject to subsection (2) below, a London local service licence may be revoked or suspended by the metropolitan traffic commissioner on the ground that there has been a contravention of any condition attached to it.

• (2) The commissioner shall not revoke or suspend a London local service licence unless, owing to the frequency of the breach of conditions, or to the breach having been committed intentionally, or to the danger to the public involved in the breach, the commissioner is satisfied that the licence should be revoked or suspended.

• (3) On revoking or suspending a London local service licence the metropolitan traffic commissioner shall send notice of the revocation or suspension to every commissioner of police or local authority notified of the grant of the licence in accordance with section 37(4) of this Act.

• (4) A London local service licence suspended under this section shall during the time of suspension be of no effect.

Duration of licences

41

• (1) Subject to subsection (2) below, a London local service licence shall, unless previously revoked, continue in force until the end of the period of five years beginning with the date on which it takes effect, unless at the time of the granting of the licence the metropolitan traffic commissioner for special reasons determines that it shall continue in force only for a shorter period, in which case it shall, unless previously revoked, continue in force only until the end of that shorter period.

• (2) If, on the date on which a London local service licence is due to expire, proceedings are pending before the metropolitan traffic commissioner on an application for the grant of a new licence in substitution for it, the existing licence shall continue in force until the application is disposed of, but without prejudice to the exercise in the meantime of the powers conferred by section 40 of this Act.

• (3) Nothing in this section shall prevent—

• (a) the grant of a London local service licence limited to one or more particular periods or occasions; or

• (b) the attachment to a London local service licence of a condition that the service shall be so limited.

Supplementary provisions

Appeals to the Secretary of State

42

• (1) A person who has applied for the grant of a London local service licence may appeal to the Secretary of State against any decision of the metropolitan traffic commissioner—

• (a) to refuse to grant the licence in accordance with the application; or

• (b) to attach any condition to the licence otherwise than in accordance with the application.

• (2) Where a person who has applied for a new London local service licence in substitution for a licence held by him and in force at the date of his application appeals to the Secretary of State under subsection (1) above against any such decision as is mentioned in paragraph (a) or (b) of that subsection, the existing licence shall continue in force until the appeal is disposed of, but without prejudice to the exercise in the meantime of the powers conferred by section 40 of this Act.

• (3) The holder of a London local service licence may appeal to the Secretary of State against any decision of the metropolitan traffic commissioner—

• (a) to refuse an application by the holder for the variation or removal of any condition attached to the licence;

• (b) to vary any such condition, or to attach any new condition to the licence, otherwise than on an application by the holder; or

• (c) to revoke or suspend the licence.

• (4) Where the commissioner makes any such decision with respect to a licence as is mentioned in subsection (3)(b) or (c) above he may, if the holder of the licence so requests, direct that his decision shall not have effect until the expiration of the period within which an appeal against it may be made to the Secretary of State under that subsection and, if such an appeal is made, until the appeal is disposed of.

• (5) If the commissioner refuses to give a direction under subsection (4) above, the holder of the licence may apply to the Secretary of State for such a direction, and the Secretary of State shall give his decision on the application within fourteen days.

• (6) A person who has applied for the grant of a London local service licence, or for the variation or removal of any conditions attached to such a licence, shall, if the metropolitan traffic commissioner fails to come to a decision on the application within a reasonable time, have the same right to appeal to the Secretary of State as if the commissioner had decided to refuse the application.

• (7) A person other than the applicant for, or holder of, a London local service licence may, if he has standing in the matter in accordance with the following provisions of this section, appeal to the Secretary of State against any decision of the metropolitan traffic commissioner with respect to—

• (a) the grant, revocation or suspension of a London local service licence; or

• (b) the attachment of any condition to a London local service licence or the variation or removal of any condition attached to such a licence.

• (8) Subject to subsection (9) below, the persons having standing to appeal under subsection (7) above against a decision of the metropolitan traffic commissioner with respect to a London local service licence are—

• (a) any local authority affected; and

• (b) any person providing transport facilities along or near the route, or part of the route, of the service which is being or is to be provided under the licence;

being a local authority or person who has made objections or other representations to the commissioner in the course of the proceedings resulting in that decision.

• (9) Subsection (8)(b) above shall not apply in the case of any decision of the metropolitan traffic commissioner on an application to which section 39 of this Act applies or with respect to a London local service licence granted in pursuance of that section.

• (10) An appeal under this section must be made within the prescribed time and in the prescribed manner; and provision may be made by regulations as to the procedure to be followed in connection with appeals under this section.

• (11) On any appeal under this section the Secretary of State may, if he thinks fit, remit the matter to the metropolitan traffic commissioner for rehearing and determination by him; and, if he does so, he may give to the commissioner such directions as he thinks fit with respect to the consideration to be given to any circumstances of the case.

• (12) On the determination of an appeal under this section the Secretary of State may confirm, vary or reverse the decision appealed against, and may give such directions as he thinks fit to the metropolitan traffic commissioner for giving effect to his decision.

Further appeals on points of law

43

• (1) An appeal lies to the High Court at the instance of any of the persons mentioned in subsection (2) below on any point of law arising from a decision of the Secretary of State on an appeal from a decision of the metropolitan traffic commissioner.

• (2) The persons who may appeal against any such decision of the Secretary of State are—

• (a) the person who appealed to the Secretary of State;

• (b) any person who had a right to appeal to the Secretary of State against the relevant decision of the commissioner but did not exercise that right;

• (c) any person who would have had a right of appeal to the Secretary of State against the relevant decision of the commissioner if aggrieved by that decision and who is aggrieved by the decision of the Secretary of State on the appeal; and

• (d) the metropolitan traffic commissioner.

• (3) If on an appeal under this section the High Court is of opinion that the decision appealed against was erroneous in point of law, it shall remit the matter to the Secretary of State with the opinion of the court for rehearing and determination by him.

• (4) No appeal to the Court of Appeal may be brought from a decision of the High Court under this section except with the leave of the High Court or the Court of Appeal.

Application of provisions of the 1981 Act

44

• (1) The provision of the 1981 Act mentioned in subsection (2) below shall apply in relation to the grant of London local service licences, or to London local service licences granted, under this Part of this Act, as they apply in relation to the grant of PSV operators’ licences, or to PSV operators’ licences granted, under that Act.

• (2) Those provisions are—

• section 57 (death, bankruptcy, etc., of licence holder);

• section 58(2) (grant of licences to unincorporated body or to persons jointly); and

• section 59 (regulations with respect to procedure on applications for licences).

• (3) Section 84 of that Act (which relates to the effect of that Act in relation to general public interests) shall have effect as if the provisions of this Part of this Act were contained in that Act.

Interpretation of Part II

45

• (1) In this Part of this Act—

• “commissioner of police” means—

• (a) in relation to the metropolitan police district, the Commissioner of Police of the Metropolis; and

• (b) in relation to the City of London, the Commissioner of Police for the City of London;

• “the Common Council” means the Common Council of the City of London;

• “bus service” and “London bus service” have the meanings given by section 34(2) of this Act; and

• “metropolitan traffic commissioner” shall be read in accordance with section 35(3) of this Act.

• (2) Subject to subsection (3) below, for the purposes of—

• (a) section 37(4) of this Act; and

• (b) section 42(8)(a) of this Act;

the local authorities affected are any of the following councils, that is to say, the councils of the London boroughs and the Common Council, in whose area the service, or any part of the service, is being or (as the case may be) is to be provided under the licence in question.

• (3) For the purposes of—

• (a) section 39(7) of this Act; and

• (b) section 42(8)(a) of this Act as it applies in a case within subsection (9) of that section;

the local authorities affected are any of the councils mentioned in subsection (2) above in whose area there is situated any stopping place for the proposed service or (as the case may be) for the service which is being provided under the licence in question.

Repeal of Part II

Power of Secretary of State to repeal Part II

46

• (1) The Secretary of State may by order repeal this Part of this Act.

• (2) Any order made under this section may contain such supplementary, incidental, consequential and transitional provisions as may appear to the Secretary of State to be necessary or expedient (including provision making such amendments or repeals in any provision of this or any other Act as may appear to the Secretary of State to be required in consequence of the repeal of this Part of this Act).

• (3) No order shall be made under this section unless a draft of the order has been laid before, and approved by a resolution of, each House of Parliament.

Part III — The National Bus Company

The Bus Company’s disposal programme

Transfer of operations of the Bus Company to the private sector

47

General duties of the Bus Company

48

Powers of disposal

The Bus Company's powers of disposal

49

Provisions supplementary to section 49

50

Provision of services for related companies

51

Pensions for employees of related companies

52

Miscellaneous and supplementary

Financial provisions

53

Dissolution of the Bus Company

54

• (1) When it appears to the Secretary of State that the Bus Company have completed their disposal programme, the Secretary of State may by order provide for the dissolution of the Company.

• (2) Any such order may provide for the disposal of any remaining property, rights or liabilities of the Company, and may contain such supplementary, incidental and consequential provisions as may appear to the Secretary of State to be necessary or expedient.

• (3) Without prejudice to the generality of subsection (2) above, any such order may in particular make provision—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (d) making such amendments or repeals in any provision of the 1962 Act or the 1968 Act or of this or any other Act as appear to the Secretary of State to be required in consequence of the dissolution of the Company.

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reduction of assets of National Loans Fund

55

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interpretation of Part III

56

In this Part of this Act—

• (a) references to the Bus Company shall be read in accordance with section 47(1) of this Act; and

• (b) “the Company’s disposal programme” has the meaning given by subsection (4) of that section.

Part IV — Local Passenger Transport Services

Integrated Transport Areas and Passenger Transport Areas

Passenger Transport Areas, Authorities and Executives

57

• (1) In section 9 of the 1968 Act (designation of passenger transport areas and establishment of Passenger Transport Authorities and Executives)—

• (a) for subsections (1) to (4) there shall be substituted the following subsections—

(1) For the purposes of this Part of this Act— (a) each of the following areas, that is to say— (i) in England and Wales, the metropolitan counties; and (ii) in Scotland, that part of the Strathclyde region which was a designated area for the purposes of this Part of this Act immediately before the date on which section 57 of the Transport Act 1985 came into operation; shall be a passenger transport area; (a) the Passenger Transport Authority for a passenger transport area (referred to below in this Part of this Act, in relation to that area, as “the Authority”) shall be— (i) in relation to a passenger transport area in England and Wales, the metropolitan county council; and (ii) in relation to the Strathclyde passenger transport area, the Strathclyde regional council; and (c) the Passenger Transport Executive for a passenger transport area (referred to below in this Part of this Act, in relation to that area, as “the Executive”) shall be the body which immediately before the date mentioned in paragraph (a) above was the Passenger Transport Executive for the designated area for the purposes of this Part of this Act corresponding to that passenger transport area. (2) The Executive for a passenger transport area consists of— (a) a Director General appointed in accordance with Part II of Schedule 5 to this Act by the Authority; and (b) not less than two nor more than eight other members so appointed by the Authority after consultation with the Director General. (3) Subject to subsection (2) of this section and Part II of Schedule 5 to this Act, the Secretary of State may by order make with respect to the Executive for any passenger transport area— (a) such provision with respect to any of the matters referred to in Part III of that Schedule; and (b) such supplementary, incidental and consequential provision; as appears to the Secretary of State to be necessary or expedient. (4) Before making any order under subsection (3) of this section, the Secretary of State shall consult with the Passenger Transport Authority for the area and, where the area is in England and Wales, with the councils of the districts comprised in the area.

;

• (b) in subsection (5), as it applies to England and Wales, for the words “constituent areas” there shall be substituted the words “the districts comprised in a passenger transport area”;

• (c) in subsection (5), as it applies to Scotland, for the word “designated” there shall be substituted the words “passenger transport”; and

• (d) subsection (7) shall be omitted.

• (2) After section 9 there shall be inserted the following sections—

(9A) (1) It shall be the duty of the Authority for any passenger transport area to formulate from time to time general policies with respect to the descriptions of public passenger transport services they consider it appropriate for the Executive for their area to secure for the purpose of meeting any public transport requirements within their area which in the view of the Authority would not be met apart from any action taken by the Executive for that purpose. (2) The Authority shall seek and have regard to the advice of the Executive for their area in formulating their policies under subsection (1) of this section. (3) It shall be the duty of the Executive for any passenger transport area to secure the provision of such public passenger transport services as they consider it appropriate to secure for meeting any public transport requirements within their area in accordance with policies formulated by the Authority for their area under subsection (1) of this section. (4) The Executive shall have power to enter into an agreement providing for service subsidies for the purpose of securing the provision of any service under subsection (3) of this section; but their power to do so— (a) shall be exercisable only where the service in question would not be provided without subsidy; and (b) is subject to sections 89 to 92 of the Transport Act 1985 (tendering for local services, etc.). (5) Where it appears to the Authority for any passenger transport area that it would be appropriate for the Executive for that area to take any measures for the purpose of or in connection with promoting, so far as relates to that area— (a) the availability of public passenger transport services other than subsidised services and the operation of such services, in conjunction with each other and with any available subsidised services, so as to meet any public transport requirements the Authority consider it appropriate to meet; or (b) the convenience of the public (including persons who are elderly or disabled) in using all available public passenger transport services (whether subsidised or not); the Authority may from time to time formulate general policies with respect to the description of such measures to be taken by the Executive for that area, and the Executive shall take such measures for the purpose or in the connection mentioned above as appear to them to be appropriate for carrying out those policies. (6) It shall be the duty— (a) of the Authority for any passenger transport area, in formulating any such policies; and (b) of the Executive for any passenger transport area, in carrying out any such policies; so to conduct themselves as not to inhibit competition between persons providing or seeking to provide public passenger transport services in their area. (7) It shall be the duty both of the Authority and of the Executive for any passenger transport area, in exercising or performing any of their functions under the preceding provisions of this section, to have regard to the transport needs of members of the public who are elderly or disabled. (8) No person who is for the time being— (a) the operator of any public passenger transport services; (b) a director of any company or (as the case may be) an employee of any company or other person who is such an operator; (c) a director or employee of any company which is a member of a group of inter-connected bodies corporate any one or more of which is such an operator; (d) in Scotland, a partner or (as the case may be) an employee of a partner of such an operator; shall be appointed as a member, officer or servant of the Executive for any passenger transport area; and any person so appointed who subsequently becomes such an operator, director, partner or employee shall immediately vacate his membership of the Executive, or (as the case may be) his office or employment with the Executive. (9) References in subsection (5) above to subsidised services are references to services provided under an agreement providing for service subsidies entered into— (a) by the Executive for the area in question or for any other area under subsection (4) of this section; or (b) by any non-metropolitan county or district council in England and Wales or by any regional or islands council in Scotland under section 63 of the Transport Act 1985. (10) For the purposes of subsection (8) above, any two bodies corporate are to be treated as interconnected if one of them is a body corporate of which the other is a subsidiary or if both of them are subsidiaries of the same body corporate; and in that subsection “group of interconnected bodies corporate” means a group consisting of two or more bodies corporate all of which are interconnected with each other in the sense given above. (11) In this section and section 9B of this Act “public passenger transport services” has the same meaning as in the Transport Act 1985; and— (a) references in this section to agreements providing for service subsidies; and (b) references in this section and that section to the operator of, or to persons operating, any public passenger transport services; shall be read as if contained in that Act. (9B) (1) When considering from time to time the formulation of policies for the purposes of section 9A(1) of this Act, the Authority for a passenger transport area shall consult— (a) with every Passenger Transport Authority, county council or regional council whose area may be affected by those policies; and (b) either with persons operating public passenger transport services within their area or with organisations appearing to the Authority to be representative of such persons; and where the passenger transport area is in England and Wales the Authority shall also consult with the councils of the districts comprised in that area about the requirements of transport arising out of or in connection with the exercise and performance by those councils of their functions as local education authorities or of their social services functions. (2) As soon as practicable after any occasion when they formulate new or altered policies for those purposes, the Authority concerned shall publish a statement of all policies so formulated by them on that or any previous occasion which for the time being apply in relation to the performance by the Executive for their area of their duty to secure services under section 9A(3). (3) When the Authority publish such a statement, they shall send a copy of the statement— (a) to each Authority or council whom they were required to consult under subsection (1)(a) above; and (b) to each of the persons or (as the case may be) organisations whom they consulted under subsection (1)(b) above; in relation to the formulation of their policies on the occasion in question. (4) The Authority shall also— (a) cause a copy of the statement last published by them under subsection (2) above to be made available for inspection (at all reasonable hours) at such places as they think fit; and (b) give notice, by such means as they think expedient for bringing it to the attention of the public, as to the places at which a copy of that statement may be inspected.

• (3) Section 20 of the 1968 Act (which imposes a special duty on the Executive for any passenger transport area to which that section is applied by an order made by the Secretary of State under subsection (1) of that section to secure by agreement with the Railways Board the provision of such railway passenger services as the Authority decide to be necessary to ensure a proper contribution towards the provision of a properly integrated and efficient system of public passenger transport to meet the needs of their area) shall apply in relation to the Executive for every passenger transport area; and subsection (1) of that section shall accordingly cease to have effect.

• (4) Without prejudice to section 17(2)(b) of the Interpretation Act 1978 (preservation of subordinate legislation) any order under section 9(1) of the 1968 Act or under section 202(4) of the 1972 Act (orders establishing Passenger Transport Executives) which applies in relation to a Passenger Transport Executive immediately before this section comes into force shall have effect, so far as it makes with respect to that Executive any such provision as is mentioned in section 9(3) (as substituted by subsection (1) above), as if made under that provision (as so substituted).

• (5) Section 9A(8) of the 1968 Act shall not apply in relation to any person appointed before this section comes into force as a member, officer or servant of the Passenger Transport Executive for any passenger transport area.

• (6) Schedule 3 to this Act shall have effect for the purpose of making amendments consequential on the provisions of this section in the 1968 Act and in the other enactments there mentioned.

Local government reorganisation: transport functions

58

• (1) The following provisions of this section, with the exception of subsection (5), shall have effect from the abolition date within the meaning of the Local Government Act 1985 (that is to say, 1st April 1986).

• (2) In section 9 of the 1968 Act (as amended by section 57(1) of this Act)—

• (a) in subsection (1)—

• (i) at the beginning there shall be inserted the words “Subject to any order under section 42(1)(c) of the Local Government Act 1985 (alteration or abolition of passenger transport areas, etc.)”; and

• (ii) in paragraph (b)(i), for the word “council” there shall be substituted the words “passenger transport authority for the county which is coterminous with or includes that passenger transport area”;

• (b) in subsection (4), after the word “the” (where it last occurs) there shall be inserted the words “county which is coterminous with or includes that”; and

• (c) in subsection (5), as it applies in England and Wales, after the words “comprised in” there shall be inserted the words “a county which is coterminous with or includes”.

• (3) In section 9B(1) of that Act, after the words “comprised in” there shall be inserted the words “the county which is coterminous with or includes”.

• (4) In the Local Government Act 1985—

• (a) paragraphs 1, 2 and 4 of Schedule 12 shall be omitted;

• (b) in section 39(2) (operative dates for Schedule 12), for the words “paragraphs 1 to 4” there shall be substituted the words “paragraph 3”; and

• (c) in section 42(1)(c) (reorganisation of functions with respect to passenger transport), after the words “section 39 above” there shall be inserted the words “or section 58 of the Transport Act 1985”.

• (5) Provisions of that Act referring generally to that Act, or to any provision made by or under that Act, shall have effect as if subsections (1) to (3) above were contained in that Act.

Transfer of bus undertakings of Executives to companies owned by Authorities

59

• (1) Before such date as the Secretary of State may specify in the case of any Passenger Transport Executive in a direction given to that Executive, the Executive shall form a company for the purpose of carrying on—

• (a) activities of any description carried on by the Executive in or for the purposes of the provision of any service for the carriage of passengers by road currently provided by the Executive in exercise of any of their powers under section 10(1) of the 1968 Act; and

• (b) any activities which appear to the Executive to be incidental to or connected with any activities within paragraph (a) above or to be capable of being conveniently carried on in association with any such activities.

• (2) The company shall be a company limited by shares registered under the Companies Act 1985.

• (3) Where the Executive for any passenger transport area have formed a company in pursuance of this section, the Executive shall, before such date as the Secretary of State may specify in a direction given to the Executive, submit to the Secretary of State a scheme providing for the transfer to the company of any property, rights or liabilities of the Executive, or of any wholly-owned subsidiary of theirs, which it appears to the Executive to be appropriate to transfer to that company.

• (4) In preparing a scheme in pursuance of subsection (3) above, the Executive in question shall take into account any advice given by the Secretary of State as to the provisions he regards as appropriate for inclusion in the scheme (and in particular, but without prejudice to the generality of that, as to the description of property, rights and liabilities it is in his view appropriate to transfer to the company).

• (5) A scheme under subsection (3) above shall not come into force until it has been approved by the Secretary of State or until such date as the Secretary of State may, in giving his approval, specify; and the Secretary of State may approve a scheme either without modifications or with such modifications as, after consultation with the Executive and with the Passenger Transport Authority for the area in question, he thinks fit.

• (6) If the Secretary of State is not satisfied that a scheme submitted under subsection (3) above accords with any such advice given by him as is mentioned in subsection (4) above, or would do so with appropriate modifications, he may, after consultation with the Executive and with the Passenger Transport Authority for the area in question, instead of approving the scheme substitute for it a scheme of his own, to come into force on such date as may be specified in the scheme.

• (7) On the coming into force of a scheme under this section the property, rights and liabilities affected by the scheme shall, subject to section 129 of this Act, be transferred and vest in accordance with the scheme.

• (8) Following the transfer to the company under subsection (7) above of the property, rights and liabilities affected by the scheme, the Executive shall, before such date as the Secretary of State may specify in a direction given to the Executive, transfer all shares in or other securities of the company to the Passenger Transport Authority for their area.

• (9) Where—

• (a) the property, rights and liabilities transferred under subsection (7) above include the whole of the undertaking of any wholly-owned subsidiary of the Executive; and

• (b) it appears to the Executive that no further action is required on the part of that subsidiary to perfect any transfer under that subsection;

the Executive shall secure that that subsidiary is wound up.

• (10) Without prejudice to any other restriction on their powers, a Passenger Transport Executive may not dispose of any shares in or other securities of a company formed by that Executive in pursuance of this section otherwise than in accordance with subsection (8) above.

Exclusion of public sector co-operation requirements and bus operating powers

60

• (1) This section applies where in the case of any passenger transport area a company (referred to below in this Part of this Act, in relation to that area, as “the initial company”) has been formed by the Passenger Transport Executive for that area (“the Executive”) in pursuance of section 59 of this Act.

• (2) At any time after the Secretary of State has given to the Executive a direction under subsection (3) of that section the Secretary of State may by order provide that the Executive shall cease, on a day specified in the order, to be under the duty imposed by section 24(2) of the 1968 Act (duty to co-operate with the National Bus Company and the Scottish Transport Group and to enter into agreements for that purpose).

• (3) Where an order is made under subsection (2) above, any duty of the National Bus Company and the Scottish Transport Group under section 24(2) of the 1968 Act to co-operate with the Executive (or with each other) shall cease on the day specified in the order to apply in relation to the Executive’s area.

• (4) Any order under subsection (2) above may include provision for the termination of any agreements made under section 24(2) to which the Executive are a party, on such terms and such dates as may be specified in relation to those agreements in the order (and different terms and dates may be so specified in relation to different agreements).

• (5) At any time after the transfer required under section 59(8) of shares in or other securities of the initial company to the Passenger Transport Authority for the Executive’s area has taken place the Secretary of State may by order provide that the Executive shall cease, on a day specified in the order, to have the powers under section 10(1)(i) and (viii) of the 1968 Act (powers to carry passengers by road and to let passenger vehicles on hire with or without trailers for the carriage of goods).

• (6) Where an order is made under subsection (5) above in relation to the Executive, section 16(2) of the 1968 Act (which relates to the provision of special information in the annual report of Authorities and Executives as to certain businesses of providing services for the carriage of passengers by road) shall cease to apply in relation to any accounting period of the Executive beginning on or after the day specified in the order.

• (7) The Secretary of State may by order provide for the repeal of—

• (a) section 24(2) of the 1968 Act; and

• (b) section 10(1)(i) and (viii) of that Act;

on the date on which, by virtue of the cumulative effect of orders made under this section, there ceases to be any Passenger Transport Executive in Great Britain who are under the duty imposed by section 24(2) or have the powers under section 10(1)(i) and (viii).

• (8) Any order made under subsection (7) above may contain such supplementary, incidental and consequential provisions (including provisions modifying any enactment contained in this or any other Act) as may appear to the Secretary of State to be necessary or expedient in consequence of any repeals made by the order.

Division of undertakings of companies formed under section 59

61

• (1) Where in the case of any passenger transport area the transfer required under section 59(8) of this Act of shares in or other securities of the initial company to the Passenger Transport Authority for that area has taken place, the Secretary of State may by a direction given to that Authority require the Authority to submit to him in accordance with the following provisions of this section written proposals for the division of the undertaking of the initial company among two or more companies to be formed in pursuance of the proposals.

• (2) Where the initial company has any wholly-owned subsidiaries, the proposals may, instead of or (as the case may be) in addition to providing for the transfer to any one or more of those companies of the shares in or other securities of any such subsidiary comprised in the initial company’s undertaking, provide for—

• (a) the division among those companies; or

• (b) the transfer to any one of them;

of the whole or any part of the undertaking, or of any property, rights or liabilities, of that subsidiary.

• (3) The proposals shall be submitted to the Secretary of State before the end of such period as may be specified in the direction.

• (4) The proposals shall—

• (a) provide for each company to be formed in pursuance of the proposals (referred to below in this section as a transferee company) to be a company limited by shares and registered under the Companies Act 1985;

• (b) broadly describe the manner in which the undertaking of the initial company, and the whole or any part of the undertaking of any wholly-owned subsidiary of the initial company to which the proposals relate, is to be divided among the transferee companies or (as the case may be) transferred in accordance with the proposals to any one of those companies; and

• (c) provide for the winding up of the initial company, and of any wholly-owned subsidiary of the initial company the whole of whose undertaking is to be transferred in accordance with the proposals to any one or more of the transferee companies, on completion of the transfer of that company’s or (as the case may be) of that subsidiary’s undertaking.

• (5) In preparing their proposals the Authority shall take into account any advice given by the Secretary of State as to the provisions he regards as appropriate for inclusion in the proposals (and in particular, but without prejudice to the generality of that, as to the description of property, rights and liabilities of the initial company and of any wholly-owned subsidiary of the initial company it is in his view appropriate to transfer to each of the transferee companies).

• (6) The Secretary of State may approve the proposals either without modifications or with such modifications as, after consultation with the Authority, he thinks fit.

• (7) If the Secretary of State is not satisfied that the proposals accord with any such advice given by him as is mentioned in subsection (5) above, or would do so with appropriate modifications, he may, after consultation with the Authority, instead of approving the proposals substitute for them a plan of his own.

• (8) When the Secretary of State has approved the proposals or substituted for them a plan of his own, the Authority shall form each transferee company in accordance with the proposals as approved by the Secretary of State or (as the case may be) in accordance with the Secretary of State’s plan, and secure the registration of that company under the Companies Act 1985, before such date as the Secretary of State may specify in relation to that company in giving his approval to the proposals or (as the case may be) in that plan.

• (9) When all the transferee companies have been formed in accordance with the proposals as so approved or (as the case may be) in accordance with the Secretary of State’s plan, the Authority shall, before such date as the Secretary of State may specify in a direction given to the Authority, submit to the Secretary of State a scheme providing for the transfer to each transferee company of any property, rights and liabilities—

• (a) of the initial company; and

• (b) of any wholly-owned subsidiary of the initial company;

which are to be transferred in accordance with those proposals or (as the case may be) in accordance with that plan to that transferee company.

• (10) A scheme under subsection (9) above shall not come into force until it has been approved by the Secretary of State or until such date as the Secretary of State may, in giving his approval, specify; and the Secretary of State may approve a scheme either without modifications or with such modifications as, after consultation with the Authority, he thinks fit.

• (11) On the coming into force of a scheme under subsection (9) above the property, rights and liabilities affected by the scheme shall, subject to section 129 of this Act, be transferred and vest in accordance with the scheme.

• (12) When it appears to the Authority that no further action is required on the part of the initial company to perfect any transfer effected by the scheme, the Authority shall secure that the initial company is wound up in accordance with the proposals as approved by the Secretary of State or (as the case may be) in accordance with the Secretary of State’s plan.

• (13) Subsection (12) above shall apply in relation to any subsidiary of the initial company the whole of whose undertaking is transferred under the scheme to one or more of the transferee companies as it applies in relation to the initial company.

Protection of employee benefits on transfer and division of bus undertakings

62

• (1) In this section, as it applies in relation to the Passenger Transport Executive or (as the case may be) in relation to the Passenger Transport Authority for any passenger transport area—

• “the first transfer” means the transfer under section 59(7) of this Act to the initial company of property, rights and liabilities of the Executive for that area; and

• “the second transfer” means the transfer under section 61(11) of this Act to companies formed under that section of property, rights and liabilities of the initial company;

and “the first transfer date” and “the second transfer date” mean respectively the date on which the first transfer and the date on which the second transfer takes effect.

• (2) The Passenger Transport Executive for any passenger transport area shall have power to make, in such manner as they think fit, such provision as appears to them to be appropriate in connection with either the first or the second transfer for the maintenance to any extent of any concession, benefit or privilege of a description enjoyed immediately before the first transfer date by—

• (a) persons who then were or had been employed in such part of the Executive’s undertaking, or of the undertaking of any wholly-owned subsidiary of the Executive, as was transferred on that date to the initial company; or

• (b) members of the families of any such persons.

• (3) Subject to subsection (4) below, the Passenger Transport Authority for any passenger transport area shall have power to make, in such manner as they think fit, such provision as appears to them to be appropriate in connection with the second transfer for the maintenance to any extent of any concession, benefit or privilege of a description enjoyed immediately before the second transfer date by—

• (a) persons who then were or had been employed in any undertaking or part of an undertaking transferred on that date to a company formed under section 61 of this Act; or

• (b) members of the families of any such persons.

• (4) Subsection (3) above shall not apply to any concession, benefit or privilege of a description to which subsection (2) above applies.

• (5) Where provision for the maintenance of a concession, benefit or privilege of any description may be made under subsection (2) or (3) above provision may instead be made, in any cases or classes of case to which that subsection applies, for the making of any payment or the provision of any other concession, benefit or privilege in compensation for the loss or (as the case may be) for any reduction or limitation of concessions, benefits or privileges of that description.

Passenger transport in other areas

Functions of local councils with respect to passenger transport in areas other than passenger transport areas

63

• (1) In each non-metropolitan county of England and Wales it shall be the duty of the county council—

• (a) to secure the provision of such public passenger transport services as the council consider it appropriate to secure to meet any public transport requirements within the county which would not in their view be met apart from any action taken by them for that purpose; . . .

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) It shall be the duty of a . . . council in Scotland, in relation to any part of their area which is not a passenger transport area—

• (a) to secure the provision of such public passenger transport services as the council consider it appropriate to secure to meet any public transport requirements within their area which would not in their view be met apart from any action taken by them for that purpose; and

• (b) to formulate from time to time general policies as to the descriptions of services they propose to secure under paragraph (a) above.

• (3) In formulating policies under subsection . . . (2)(b) above with respect to the descriptions of services they propose to secure under subsection . . . (2)(a) above, a council shall have regard to any measures they are required or propose to take for meeting any transport requirements in exercise or performance of—

• (a) any of their functions . . . as an education authority; or

• (b) any of their . . . social work functions.

• (4) A non-metropolitan district council in England . . . shall have power to secure the provision of such public passenger transport services as they consider it appropriate to secure to meet any public transport requirements within their area which would not in their view be met apart from any action taken by them for that purpose.

• (5) For the purpose of securing the provision of any service under subsection (1)(a) or (2)(a) or (as the case may be) under subsection (4) above any council shall have power to enter into an agreement providing for service subsidies; but their power to do so—

• (a) in England and Wales, shall be exercisable only where the service in question would not be provided, or would not be provided to a particular standard, without subsidy;

• (aa) in Scotland, shall be exercisable only where the service in question would not be provided without subsidy; and

• (b) is subject to sections 89 to 92 of this Act.

• (5A) The reference in subsection (5)(a) above to the standard to which a service is provided includes—

• (a) the frequency or timing of the service;

• (b) the days, or times of day, when the service is provided;

• (c) the vehicles used to provide the service.

• (6) A non-metropolitan county council in England and Wales or, in Scotland, a . . . council shall have power to take any measures that appear to them to be appropriate for the purpose of or in connection with promoting, so far as relates to their area—

• (a) the availability of public passenger transport services other than subsidised services and the operation of such services, in conjunction with each other and with any available subsidised services, so as to meet any public transport requirements the council consider it appropriate to meet; or

• (b) the convenience of the public (including persons who are elderly or disabled) in using all available public passenger transport services (whether subsidised or not).

• (7) It shall be the duty of a county council or (as the case may be) of a regional or islands council, in exercising their power under subsection (6) above, to have regard to a combination of economy, efficiency and effectiveness.

• (8) It shall be the duty of any council, in exercising or performing any of their functions under the preceding provisions of this section, to have regard to the transport needs of members of the public who are elderly or disabled ....

• (8A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (9) References in subsection (6) above to subsidised services are references to services provided under an agreement providing for service subsidies entered into—

• (a) by the council in question or by any other county or district council or regional or islands council under this section; or

• (b) by the Passenger Transport Executive for any integrated transport area or passenger transport area under section 9A(4) of the 1968 Act.

• (10) In this Act—

• (a) “public passenger transport services” means all those services on which members of the public rely for getting from place to place, when not relying on private facilities of their own, including school transport but not—

• (i) services provided under permits under section 19 of this Act, other than services provided wholly or mainly to meet the needs of members of the public who are elderly or disabled; or

• (ii) excursions or tours; and

• (b) references, in relation to any Passenger Transport Executive, non-metropolitan county or district council or regional or islands council, to agreements providing for service subsidies are references to agreements under which any person undertakes to provide a public passenger transport service of any description on terms which include provision for the making of payments to that person by that Executive or council.

Consultation and publicity with respect to policies as to services

64

• (1) When considering from time to time the formulation of policies for the purposes of section 63(2)(b) of this Act, any council to whom that provision applies shall consult—

• (a) with every Integrated Transport Authority, combined authority, combined county authority, Passenger Transport Authority, county council orregional or islands council whose area may be affected by those policies; and

• (b) either with persons operating public passenger transport services within their area or with organisations appearing to the council to be representative of such persons;

. . .

• (2) As soon as practicable after any occasion when they formulate new or altered policies for those purposes, any such council shall publish a statement of all policies so formulated by them on that or any previous occasion which they propose for the time being to follow in the performance of their duty to secure services . . . under section 63(2)(a).

• (3) When any such council publish such a statement, they shall send a copy of the statement—

• (a) to each Authority or council whom they were required to consult under subsection (1)(a) above; and

• (b) to each of the persons or (as the case may be) organisations whom they consulted under subsection (1)(b) above;

in relation to the formulation of their policies on the occasion in question.

• (4) The council shall also—

• (a) cause a copy of the statement last published by them under subsection (2) above to be made available for inspection (at all reasonable hours) at such places as they think fit; and

• (b) give notice, by such means as they think expedient for bringing it to the attention of the public, as to the places at which a copy of that statement may be inspected.

Co-operation between certain councils and London Regional Transport

65

• (1) Subject to the following provisions of this section, any non-metropolitan county or district council in England and Wales and Transport for London or any of its subsidiaries (within the meaning of the Greater London Authority Act 1999) shall each have power to enter into any agreement or arrangements with the other under which that council or (as the case may be) Transport for London or that subsidiary undertake to contribute towards any expenditure incurred by the other party to the agreement or arrangements in making payments to a person providing a public passenger transport service under any agreement entered into by that other party in exercise of any power that other party may have to secure the provision of that service.

• (2) The agreement under which the payments are made must have been entered into in pursuance of the agreement or arrangements between the council in question and Transport for London or any of its subsidiaries (within the meaning of the Greater London Authority Act 1999) .

• (3) Transport for London shall not exercise its powers under section 156(2) or (3) of the Greater London Authority Act 1999, and no subsidiary of Transport for London shall enter into a transport subsidiary’s agreement (within the meaning of section 169 of that Act), in pursuance of any agreement or arrangement entered into under this section except—

• (a) in a case where the service in question would not be provided without a subsidy; and

• (b) in accordance with sections 89 to 92 of this Act.

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Exclusion of powers of certain councils to run bus undertakings

66

• (1) Subject to section 71 of this Act and subsections (1A) and (2) below and to sections 123O and 132C of the Transport Act 2000, but notwithstanding anything in any other statutory provision, a non-metropolitan district council in England a county council or county borough council in Wales or, in Scotland, a council (other than the council for Orkney Islands, Shetland Islands or Western Isles) shall not have power to provide a service for the carriage of passengers by road which requires a PSV operator’s licence.

• (1A) Subsection (1) does not prevent a non-metropolitan district council in England from forming a company for the purpose of providing a local service.

• (2) Subsection (1) above shall not have effect in relation to any council who, at the time when this section comes into force, are providing any such service until the end of such period as may be specified by order made by the Secretary of State.

References below in this Part of this Act to a council operating a bus undertaking are references to any council to whom this subsection applies.

• (3) Any order under subsection (2) above may apply to all councils within that subsection who are not for the time being exempt by virtue of section 71 of this Act from subsection (1) above, to any class of such councils, or to any such council specified in the order; and different periods may be specified by any such order in relation to different councils or classes of councils to whom it applies.

• (4) Any order under subsection (2) above shall, in relation to every period specified in the order for the purposes of that subsection (“the primary period”), specify also a period ending before the primary period as the period allowed to councils to whom the primary period applies for complying with such of the requirements of sections 67 to 69 of this Act as are applicable to them.

• (5) A period specified by virtue of subsection (4) above in an order under subsection (2) above is referred to in those sections, in relation to any council to whom it applies, as the council’s preparatory period.

• (6) Any order amending a previous order under subsection (2) above, in so far as it extends any period specified in the previous order for the purposes of that subsection, may be framed so as to have effect from a date earlier than the making of the order.

• (7) For the purposes of this Part of this Act—

• (a) a service for the carriage of passengers by road is a service which requires a PSV operator’s licence if vehicles used in providing the service are used in such circumstances that a PSV operator’s licence is required in respect of that use;

• (b) any council who have made (whether alone or jointly with any other authority or authorities) arrangements under any enactment for the discharge by any other authority or person of that council’s functions with respect to the operation of any such service shall be taken to be providing that service at any time when it is being provided under those arrangements; and

• (c) references, in relation to any council operating a bus undertaking, to the council’s bus undertaking are references (according to the context) to—

• (i) all activities carried on, whether by the council themselves or by any other authority or person in pursuance of any such arrangements as are mentioned in paragraph (b) above or otherwise, in or for the purposes of the provision by the council of any such service; or

• (ii) all property of the council used or appropriated for use and all rights and liabilities of the council subsisting for the purposes of any such activities.

Formation of companies to run council bus undertakings

67

• (1) Where an order is made under section 66(2) of this Act, the council or (as the case may be) each of the councils to whom the order applies shall, before the end of that council’s preparatory period, form (whether alone or jointly with any other council operating a bus undertaking) one or more companies for the purpose of carrying on—

• (a) activities of any description included among the activities of the bus undertaking of that council or (as the case may be) of any of the councils concerned in the formation of the company or companies in question;

• (b) activities of any other description included among the activities of any joint undertaking of which that council’s bus undertaking, or (as the case may be) the bus undertaking of any council so concerned, forms part; and

• (c) any other activities which appear to the council or (as the case may be) to both or all of the councils so concerned to be incidental to or connected with any activities within paragraph (a) or (b) above or to be capable of being conveniently carried on in association with any such activities.

• (2) Any company formed under this section shall be a company limited by shares registered under the Companies Act 1985.

• (3) Subject to subsections (4) and (5) below, a council’s bus undertaking shall be regarded for the purposes of this Part of this Act as forming part of a joint undertaking if the services for the carriage of passengers by road provided in the course of the activities of the council’s bus undertaking are wholly or mainly provided under any agreement for—

• (a) the provision or operation of those services by a body acting on the joint behalf of that council and one or more other councils; or

• (b) the operation of those services by any company operating those services in conjunction with services for the carriage of passengers by road provided by that company.

• (4) Subsection (3)(a) above only applies where the agreement provides for the distribution among the parties on its termination of—

• (a) all assets, or the proceeds of all assets, used or appropriated for use for the purpose of providing services for the carriage of passengers by road under the agreement; or

• (b) all such assets or proceeds excluding only land or the proceeds of disposal of land.

• (5) Subsection (3)(b) above only applies where—

• (a) the agreement includes provision for securing that the parties on termination of the agreement hold shares of equal value in assets required to be brought into account on termination of the agreement; and

• (b) those assets include all assets so used or appropriated for use.

• (6) References in this Part of this Act, in relation to a council whose bus undertaking forms part of a joint undertaking, to the joint undertaking are references to all activities carried on, or (according to the context) to all property used or appropriated for use and all rights and liabilities subsisting for the purposes of any activities carried on, in pursuance of the agreement by reference to which that council falls within subsection (3) above.

Schemes for transfer of individual council bus undertakings to companies formed under section 67

68

• (1) Subject to subsection (2) below, a council to whom section 67(1) of this Act applies shall, before the end of that council’s preparatory period, submit to the Secretary of State a scheme providing for the transfer to a company or companies formed by that council under that section of—

• (a) such of the property, rights and liabilities of the council comprised in the council’s bus undertaking; and

• (b) such other property, rights and liabilities of the council;

as it appears to the council to be appropriate to transfer to the company or companies in question.

• (2) This section does not apply to a council whose bus undertaking forms part of a joint undertaking, except where any of the activities of the council’s bus undertaking (“the separate activities”) are carried on by the council otherwise than in pursuance of any such agreement as is mentioned in section 67(3) of this Act; and in the latter case the reference in subsection (1)(a) above to property, rights and liabilities of the council shall be read as limited to property used or appropriated for use and rights and liabilities subsisting for the purposes of the separate activities.

• (3) Two or more councils to whom this section applies may submit a joint scheme for the purposes of subsection (1) above; and in any such case the scheme may provide for the transfer of any property, rights and liabilities within that subsection as it applies to any one of those councils to a company or companies formed under section 67 of this Act by any other of those councils.

• (4) In preparing a scheme for the purposes of subsection (1) above the council or councils concerned shall take into account any advice given by the Secretary of State as to the provisions he regards as appropriate for inclusion in the scheme (and in particular, but without prejudice to the generality of that, as to the description of property, rights and liabilities it is in his view appropriate to transfer to the company or companies in question).

• (5) A scheme under this section shall not come into force until it has been approved by the Secretary of State or until such date as the Secretary of State may, in giving his approval, specify; and the Secretary of State may approve a scheme either without modifications or with such modifications as, after consultation with the council or councils concerned, he thinks fit.

• (6) If the Secretary of State is not satisfied that a scheme submitted under subsection (1) above accords with any such advice given by him as is mentioned in subsection (4) above, or would do so with appropriate modifications, he may, after consultation with the council or councils concerned, instead of approving the scheme substitute for it a scheme of his own, to come into force on such date as may be specified in the scheme.

• (7) On the coming into force of a scheme under this section, the property, rights and liabilities affected by the scheme shall, subject to section 129 of this Act, be transferred and vest in accordance with the scheme.

Orders for transfer of joint undertakings to companies formed under section 67

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• (1) This section applies to a council to whom section 67(1) of this Act applies whose bus undertaking forms part of a joint undertaking (referred to below in this section and in section 70 of this Act as a council participating in a joint undertaking).

• (2) Any council participating in a joint undertaking shall, before the end of that council’s preparatory period, submit to the Secretary of State written proposals for the transfer to a company or companies formed by that council under section 67 of—

• (a) such of the property, rights and liabilities comprised in that council’s share of the joint undertaking (whether or not then vested in that council); and

• (b) such other property, rights and liabilities of the council;

as it appeals to the council to be appropriate to transfer to the company or companies in question.

• (3) In any case within section 67(3)(a) of this Act both or all the councils participating in the joint undertaking may submit joint proposals for the purposes of subsection (2) above; and in any such case the proposals—

• (a) may release to each council’s share of the joint undertaking and (without prejudice to that) to all property, rights and liabilities of the body carrying on that undertaking; and

• (b) may provide for the transfer of any property, rights and liabilities within subsection (2) above as it applies to each of those councils to a company or companies formed under section 67 of this Act by any one or more of those councils.

• (4) Any proposals submitted to the Secretary of State under this section must include proposals with respect to the terms on which the agreement under which the joint undertaking is carried on (referred to below in this section as the operating agreement) should be terminated.

• (5) Individual proposals submitted to the Secretary of State under this section by a single council participating in a joint undertaking must include proposals for the division of that undertaking between the parties to it and the determination of the property, rights and liabilities to be allocated to each as his share.

• (6) In preparing their proposals for the purposes of subsection (2) above the council or councils concerned shall take into account any advice given by the Secretary of State as to the provisions he regards as appropriate for inclusion in the proposals (and in particular, but without prejudice to the generality of that, as to the description of property, rights and liabilities it is in his view appropriate to transfer to the company or companies in question).

• (7) Where in relation to any joint undertaking the Secretary of State has received under this section proposals submitted to him (whether individually or jointly) by the council or (if more than one) by both or all of the councils participating in the undertaking, he shall, after considering those proposals and consulting the council or councils concerned, make an order in accordance with the following provisions of this section and section 70 of this Act.

• (8) Before making such an order in any case within section 67(3)(b) of this Act the Secretary of State shall—

• (a) give the company carrying on the joint undertaking an opportunity of making written representations with respect to any proposals submitted to the Secretary of State in relation to that undertaking by the council concerned; and

• (b) consider any such representations made to him within such time as he may allow for the purpose.

• (9) An order made by the Secretary of State under this section with respect to any joint undertaking may make provision—

• (a) where joint proposals were submitted under subsection (3) above with respect to that undertaking, for the transfer in accordance with the proposals of—

• (i) all property, rights and liabilities of the body carrying on that undertaking; and

• (ii) such of the property, rights and liabilities of the councils participating in the joint undertaking as may be specified in the order;

• (b) where individual proposals were submitted by any council participating in the joint undertaking, for the division of that undertaking between the parties to it and the determination of the property, rights and liabilities to be allocated to each as his share;

• (c) in a case within paragraph (b) above, for the transfer in accordance with the proposals submitted by any such council of—

• (i) such of the property, rights and liabilities comprised in that council’s share of the joint undertaking as determined by or under the order (whether or not then vested in that council) as may be specified in the order; and

• (ii) such other property, rights and liabilities of that council as may be so specified;

and, in any case within section 67(3)(b) of this Act, for the transfer to the company carrying on the joint undertaking of any property, rights and liabilities of the council concerned which are comprised in that company’s share as determined by or under the order;

• (d) for the transfer to such person as may be so specified from any council participating in the joint undertaking, or from the body carrying on the undertaking, of all such functions as may be determined by or under the order, being functions conferred or imposed on that council or body under any Act for the purposes of or in connection with the joint undertaking;

• (e) for determining the effect of any transfer under the order in relation to persons employed in the joint undertaking or any part of it;

• (f) for the protection of the interests of persons who by virtue of any transfer under the order fall to be treated as persons employed by the person taking that transfer;

• (g) for the termination of the operating agreement on such terms as may be specified in the order; and

• (h) in any case within section 67(3)(a) of this Act, for the dissolution of the body carrying on the joint undertaking.

• (10) An order made by the Secretary of State under this section—

• (a) may give effect to the proposals submitted to him under this section either without modifications or with such modifications as, after consultation with the council or councils concerned, the Secretary of State thinks fit; or

• (b) if the Secretary of State is not satisfied that the proposals accord with any such advice given by him as is mentioned in subsection (6) above, or would do so with appropriate modifications, may make such provision in substitution for those proposals as the Secretary of State, after such consultation, thinks fit;

and references in subsection (9) above to an order’s making provision for the transfer of any property, rights and liabilities in accordance with any such proposals shall be read as referring to those proposals as approved by the Secretary of State or to any provision made by the order by virtue of paragraph (b) above, as the case may require.

Supplementary provisions with respect to orders under section 69

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• (1) Any order under section 69 of this Act may contain such supplementary, incidental and consequential provisions as the Secretary of State thinks necessary or expedient for the purposes of the order, and in particular (but without prejudice to the generality of that) may include provision—

• (a) for the assumption by any council participating in the joint undertaking and by any person to whom any property, rights and liabilities are transferred under the order of such liabilities to one another as may be determined by or under the order to be appropriate having regard to the financial arrangements of that council before the severance from the other activities of the council of the joint undertaking or (as the case may be) of any activities of that council for the purposes of the joint undertaking;

• (b) for the settlement by a court or otherwise of any dispute or other matter arising in connection with the order;

• (c) for making in any statutory provision relating to, or to a class of undertakings which includes, the joint undertaking, such amendments or repeals as may appear to the Secretary of State to be required in consequence of any transfer under the order;

• (d) for the making by any person to whom any property, rights and liabilities are transferred under the order to any council participating in the joint undertaking of payments by way of contributions to the cost of any adjustments arising from the severance mentioned in paragraph (a) above; and

• (e) with respect to the consideration to be provided by any such person for any transfer under the order.

• (2) Subject to subsection (3) below, any property, rights and liabilities for the transfer of which provision is made by an order under section 69 of this Act shall be transferred and vest in accordance with the order on such date or dates as may be appointed by the order for that purpose.

• (3) Subject to the following provisions of this section, Schedule 4 to the 1968 Act (supplementary provisions as to certain transfers of property, rights and liabilities) shall apply to any transfer under subsection (2) above; and subsection (2) above shall have effect subject to the provisions of that Schedule.

• (4) In Schedule 4 as it applies by virtue of subsection (3) above—

• (a) any reference to a transfer by or a vesting by virtue of that Act shall be read as a reference to a transfer by or a vesting by virtue of the order; and

• (b) the reference in paragraph 13(5) to the relevant provisions of that Act shall be read as including a reference to the relevant provisions of this Act.

• (5) Any order under section 69 of this Act may make modifications in Schedule 4 for the purposes of its application to a transfer effected by that order.

Exemption for councils running small bus undertakings

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• (1) Where in the case of any council operating a bus undertaking the number of vehicles owned by the council and used or appropriated for use in providing any service for the carriage of passengers by road which requires a PSV operator’s licence does not exceed such number as may be specified by order made by the Secretary of State, the Secretary of State may on the application of that council grant to that council an exemption from section 66(1) of this Act for such period and on such terms and conditions as he thinks fit.

• (2) Any such exemption shall cease to have effect if any term or condition applicable to it is contravened.

• (3) Where a council operating a bus undertaking is in possession of a vehicle under an agreement for hire, hire-purchase, conditional sale or loan, that vehicle shall be treated for the purposes of subsection (1) above as owned by the council.

Further provisions with respect to companies formed under Part IV

The public transport companies and their controlling authorities

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• (1) References in this Part of this Act to a public transport company are references to any of the following—

• (a) any company which was formed under section 59 of this Act by the Passenger Transport Executive for any integrated transport area or passenger transport area and is for the time being a subsidiary of that Executive or of the Integrated Transport Authority or Passenger Transport Authority for that area;

• (b) any company which was formed under section 61 of this Act by the Integrated Transport Authority for any integrated transport area or by the Passenger Transport Authority for any passenger transport area and is for the time being a subsidiary of that Authority; and

• (c) any company which was formed by one or more councils under section 67 of this Act and is for the time being under local authority control.

• (2) A company formed under section 67 of this Act shall be treated for the purposes of subsection (1)(c) above as under local authority control at any time when either—

• (a) it is a subsidiary of a single district council in England and Wales or, in Scotland, of a single council (other than the council for Orkney Islands, Shetland Islands or Western Isles) or

• (b) if two or more such councils who are members of the company were a single body corporate, it would be a subsidiary of that body corporate.

• (3) References in this Part of this Act to a public transport company’s controlling authority—

• (a) in relation to a company within subsection (1)(a) or (b) above, are references to the Passenger Transport Executive or (as the case may be) the Integrated Transport Authority or the Passenger Transport Authority of whom it is a subsidiary; and

• (b) in relation to a company within subsection (1)(c) above, are references to the council or councils referred to in subsection (2) above.

• (4) References in this Part of this Act to a composite authority are references to a controlling authority consisting of two or more such councils as are referred to in subsection (2) above, and the councils concerned are referred to as the component councils of that authority.

• (5) For the purposes of this Part of this Act a public transport company is an associated company—

• (a) in relation to an Integrated Transport Authority or a Passenger Transport Authority if that Authority or the Passenger Transport Executive for that Authority’s area are its controlling authority;

• (b) in relation to a Passenger Transport Executive if that Executive or the Integrated Transport Authority or Passenger Transport Authority for that Executive’s area are its controlling authority; and

• (c) in relation to a district council in England and Wales or, in Scotland, a council (other than the council for Orkney Islands, Shetland Islands or Western Isles) if that council are its controlling authority or one of the component councils of a composite authority who are its controlling authority.

Control over constitution and activities of public transport companies

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• (1) It shall be the duty of any public transport company’s controlling authority to exercise their control over that company so as to ensure that the directors of the company include no more than the permitted maximum number of persons who are not full-time employees of the company.

• (2) Following the transfer to a public transport company of its initial undertaking, it shall be the duty of that company’s controlling authority to exercise their control over that company so as to ensure that the directors of the company include not less than the required minimum number of persons who are full-time employees of the company holding positions of responsibility for the management of the company’s business or any part of it.

The reference above in this subsection to the transfer to a public transport company of its initial undertaking is a reference, in relation to any such company, to the transfer or (if more than one) the first transfer of property, rights and liabilities to that company under section 59(7), 61(11), 68(7) or 70(2) of this Act.

• (3) Subject to subsection (5) below, it shall be the duty of any public transport company’s controlling authority to exercise their control over the company so as to ensure that the company—

• (a) does not engage in activities in which the controlling authority have no power to engage or permit any body corporate which is its subsidiary to engage in any such activities;

• (b) does not—

• (i) borrow money from any person other than the controlling authority; or

• (ii) permit any body corporate which is its subsidiary to borrow money from any person other than the company, any other subsidiary of the company, or the controlling authority;

with the exception in each case of borrowing by way of temporary loan or overdraft; and

• (c) does not—

• (i) raise money by the issue of shares or stock to any person other than the controlling authority; or

• (ii) permit any body corporate which is its subsidiary to raise money by the issue of shares or stock to any person other than the company.