My Lords, I must admit that we are getting to this juncture slightly later than I anticipated. Nevertheless, we have again had a robust discussion—and this is one of those areas of the Bill that has caused a great deal of discussion. The noble Lord, Lord Kennedy, has proposed a series of amendments, which would enable all authorities listed at Section 123A(4), rather than just mayoral combined authorities, to access franchising powers without the need for regulations to be made or for the Secretary of State’s consent to be given. I want to focus on that first element—on regulations to be made. There would be a further opportunity for Parliament to discuss other authorities that fall within and wish to embark on a franchising route. That is a positive, because it allows Parliament to debate this important issue of franchising further; that should not be forgotten. The amendment in the name of the noble Baroness, Lady Randerson, also seeks to remove the Secretary of State’s consent from the process of accessing franchising powers.
I have had time to reflect on the various contributions and have met with various noble Lords outside the Chamber post-Committee, but it remains the Government’s position that the decision and model we are pursuing is the right one. The noble Lord, Lord Snape, mentioned passengers; we believe that it is the right one for passengers, British businesses and employees in this important sector. Bus companies invest in their staff, buses, new services and improvements for passengers, because they expect to achieve long-term benefits. If a local transport authority automatically has the power to pursue bus franchising at any point, the period of investment certainty is reduced. Operators in that area will think twice about these investment decisions. Let us be clear that we are not excluding anyone; we believe that the mayoral authorities have the key differential of having strategic transport as part of their direct responsibilities. When other local authorities see benefits for passengers in bus franchising, the risk of seeking access to franchising will have to be weighed up by the local authority, and their decision may be that the risk is worth taking. Similarly, where a mayoral combined authority has automatic access to franchising powers, there will be a single, elected individual with a fixed term of office with whom the decision on whether to pursue franchising rests. I would be surprised if most mayoral candidates did not set out their position on this issue at hustings or in their electoral manifestos. That remains to be seen.
For the risks that I have outlined to be present in relation to every local transport authority area, whether the authority is interested in franchising or not, is, however, another thing altogether. That is particularly true for investment in buses, where the ability of larger operators to assume they could get a return on their investment by moving a vehicle from one part of the country to another could be compromised. My issue with the amendments is not to do with protecting bus companies or anything to do with a principle of giving franchising powers automatically only to elected mayors. Rather, it is about the period of uncertainty there would be for operators, as my noble friend Lord Attlee said, if all local transport authorities had access to franchising powers as a matter of course. This would have real impacts on bus passengers, British bus manufacturing jobs and employees in the sector.
During our previous debates, noble Lords wanted to understand the kind of criteria that the Secretary of State would be considering as part of giving his consent to franchising. I am sure that noble Lords have received them; we provided them in the draft guidance and policy statement document that was issued to Peers last week—but it is important to summarise those criteria at this juncture. Noble Lords have referred to the issue of the Secretary of State and the powers that the Secretary of State would have. Let me be clear how that decision on franchising would be made.
First, an authority would need to articulate why and how franchising would deliver better bus services and improve the day-to-day experience of passengers. That puts passengers at the heart of that decision. It should also explain why the same outcomes could not be achieved in other ways.
Secondly, a local authority should have the powers to make franchising a success. Controlling local roads and parking policy, as well as having planning responsibilities, are key to being able to manage many of the factors that affect bus usage. If an authority does not have all those levers, it should explain how it will work with other authorities to do so.
That brings me to the third aspect: any decision to implement bus franchising needs to be transparent and accountable. An authority seeking to take up franchising powers should demonstrate clearly how this will be achieved. A named individual, such as a council leader, might be an appropriate approach.
Fourthly, an authority would need to illustrate why the geographical area that it proposes is appropriate. This should take into account travel patterns and consider the potential impact on other local authority areas.
Finally, it is vital that the authority has the capability and resources to deliver franchising. Those that can demonstrate a successful track record in delivering complex projects, a real commitment to improving public transport and explain how they will resource a franchising system would be best placed to apply for consent.
Those are the criteria that the Secretary of State will apply in any decision. I do not think that anyone in this Chamber or beyond would challenge them, because they are the right checks and balances to have in place to make an important long-term investment decision on the provision of local bus services.
We have talked about the differentiation with mayoral combined authorities. I am sure that many noble Lords would acknowledge that they already meet the vast majority of these criteria and have a genuine interest in bus franchising. So it is pragmatic to give them those powers in the Bill. It has been suggested that we are denying other local authorities the model, but that is not the case. We heard from the noble Lord, Lord Berkeley, about Cornwall. As part of devolution discussions, when those criteria can be met, clearly there is a case for other authority structures to be given exactly those powers—but there is a process to be followed. There will be secondary legislation and an affirmative instrument introduced on the type of authority; then it is right that a local authority on a case-by-case basis should show to the Secretary of State that the criteria that I have just illustrated,
which are important criteria in making franchising decisions, can be fully met. That is why the Bill requires the Secretary of State’s consent to be sought, following regulations that make the class of authority a franchising authority.
These are important issues that can be considered on a case-by-case basis. It is about long-term investment in the passengers’ interests. Under the criteria that I have outlined, franchising will be an option when it makes sense for passengers, it is clear that the authority can deliver on its promises and the authority concerned is clear how it will reach transparent and accountable decisions.
The prior requirement for regulations to enable other categories of authorities to become franchising authorities also serves an important purpose. It ensures that all of us here and in the other place—all of us in Parliament—are able to scrutinise the appropriateness of such a category of authorities before becoming a franchising authority. The existence of this step on the route to accessing franchising powers provides for that clarity and certainty of investment for bus operators serving types of authority that do not have automatic access to franchising powers.
The removal of such a parliamentary process, and the removal of the need for the Secretary of State’s consent, would reduce the period of certainty in the bus market with the potential for reduced investment and less—