Local Transport Bill [HL]

moved Amendment No. 31: 31: Clause 25, page 25, line 18, leave out subsection (6) and insert— ““( ) In subsection (2), for paragraph (c) (maximum period for which scheme to remain in operation) substitute— ““(c) that the scheme is to remain in operation until such time as the authority or authorities that made the scheme determine that it should not remain in operation.””.”” The noble Lord said: My Lords, according to my papers I may speak to Amendments Nos. 32 and 37 together with this one. The purpose of Amendment No. 31 is to seek to put local transport authorities on a similar footing to Transport for London for the franchising of bus service networks. In London, when a bus franchise ends Transport for London simply tenders for the new contract; it does not have to undergo a process of demonstrating a case for bus franchising, neither it is subject to an outside body determining whether the policy of franchising bus networks should continue. In Committee, the Government argued that a long or unlimited quality contract scheme would be against the public interest if that contract was not achieving its set aims, or was not proving a success. Presumably, the judgment on whether a local transport policy succeeds should be locally determined by locally accountable transport authorities. Indeed, it is difficult to see why a local transport authority would continue with such a scheme if it deemed it a failure. There seems to be a difference between the approach in London and that suggested by the Bill for the rest of the country. I therefore hope that my noble friend will reflect further on this. Also within this group is Amendment No. 32. The Bill seeks to raise the maximum length of a quality contract from five to 10 years; Amendment No. 32 seeks to remove the absolute restriction on the length of such a contract and to allow it to be governed by general legal principles. Under EU law such a contract, while generally be limited to 10 years in duration, may, if the operator makes a significant investment in the service provided under the contract, be extended by up to 50 per cent. One of the principles underlying the amendment is that operators may be more willing to invest in assets such as garages, vehicles, staff development and matters of that kind under a longer-term contract than they would under a short-term contract. I appreciate that in Committee the Government argued that a bus contract, in any case, would be unlikely to qualify for a 50 per cent extension under EU law because the degree of investment in any bus contract would be limited given the nature of bus services. It was argued that that was unlike the situation in the railway industry where there might be considerable investment. However, I would have thought it would have been possible—I hope my noble friend will reflect further on this—for a major long-term quality contract franchise to include, for example, provision for new depots, offices and vehicles; that you could have a quality contract which provided for, or was based on, considerable investment by the bus operator in matters of that kind, which one might expect the bus operator to fund. The considerable investment that this implies may qualify under European law as a significant investment by the private sector but may only be commercially viable for the operator over a period longer than 10 years. The purpose of the amendment is to provide for that period of extension to be possible. Once again, for the reasons I have mentioned, I hope my noble friend will be prepared to reflect further on this issue. I beg to move.