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Why are so many taxi and PHV drivers licenced in Wolverhampton?

As is acknowledged in 2023 Government statistics on taxi/PHVs, Wolverhampton City Council has seen a notable rise in licences issued in recent years.

The council told the Express and Star in October 2023 that their popularity as a licensing authority can be traced to their early investment in their digital application process, which has made the process more efficient and cheaper than other authorities’. Due to ‘cross-border’ working being legal, drivers can be licenced by Wolverhampton and live and work elsewhere. The council maintain that they still adhere to high driver and vehicle standards:

The council has never actively encouraged applications from drivers outside the city, existing legislation requires that if an application is submitted and requirements are met, the application must be granted. The council may not refuse an applicant simply because they live in a different area.

Our early adoption of digital technology has allowed us to offer a simple and efficient online application procedure, with the requirement that drivers attend in person for training and strict assessment before an application can be processed.

Applicants are usually local to the area they drive in, but many have chosen to be licensed in Wolverhampton due to our efficient, yet rigorous, licensing process.

Public safety is of paramount importance to us. Partnership working with our Licensing colleagues and other agencies shows our commitment to upholding our responsibilities; we expect drivers and vehicles licensed by us to always maintain the highest standards.

In March 2023 Wolverhampton Council’s taxi licensing team noted a “huge increase in the number of drivers applying for licences during 2021/22”. They also said that, because of legal restraints preventing them using ‘profit’ from taxi applications for non-licensing purposes, they are reinvesting ‘profits’ into lowering their application fees. This may make Wolverhampton an even more attractive place for drivers to get their taxi/PHV licence.

The GMB Union has noted [PDF] that so many drivers being licenced by Wolverhampton City Council can be a problem because it can “starve” other licensing authorities of potential licensing funding, and make enforcement of Wolverhampton-licenced vehicles and drivers working in their areas difficult.

How can local authorities in England have more control over local buses?

In England it is currently prohibited for local authorities to set up municipal, council-owned bus companies, but the Government has said it will review this prohibition. 

Since the publication of the Government’s 2021 National Bus Strategy all local authorities must create “enhanced partnerships” with local bus operators, which allow them to collaborate on bus provision. Alternatively, since the introduction of the Bus Services Act 2017, local authorities can opt to introduce bus franchising which gives them far greater control over bus services. Great Manchester Combined Authority is, so far, the only authority in England to have introduced franchising outside of London.

Municipal Buses

In England, the creation of municipal council-operated bus services is prohibited under the Bus Services Act 2017. In 2017 time there were six municipal bus companies in England: Blackpool Transport Services Ltd., Halton Borough Transport Ltd., Ipswich Buses Ltd., Nottingham City Transport Ltd., Reading Buses, and Network Warrington. All other municipal bus companies were sold or merged in the 30 years following the Transport Act 1985, which allowed deregulation and privatisation of the sector.

The Government has said it will issue a Call for Evidence during this Parliament as the first part of a review “into whether it remains right that local authorities cannot set up new municipal bus companies”.

Franchising

Since deregulation, local authorities’ role in the provision of local bus services has been limited, with little control over the level and structure of fares, integrated ticketing, the stability of the network, branding and marketing, and the overall integration of the bus network into wider transport policy. This is why councils have for decades been calling for increased powers to ‘re-regulate’ bus services in their areas – so even if they cannot own the buses, they can have more control over the network and the fares charged.

The Conservative Government legislated under the Bus Services Act 2017 to allow Mayoral Combined Authorities (MCAs) to ‘franchise’ their bus services and take back control of routes, timetables and fares, in a similar way to Transport for London. MCAs can instigate franchising without the consent of the Secretary of State, while all other councils must obtain this consent first.

Greater Manchester used these powers to start its own ‘Bee Network’ bus franchising system in September 2023, which is expected to cover the entire Manchester city-region by January 2025. The Liverpool City Region and Cambridgeshire & Peterborough MCAs have also signalled an intention to introduce franchising.

In 2017, the DfT published guidance on how local authorities can establish franchising for bus services. The DfT told the Transport Committee in 2023, in response to its report on the Implementation of the National Bus Strategy, that it will update this guidance “as soon as possible”.

Enhanced Partnerships

Local authorities were required under the 2021 National Bus Strategy to set up either a franchising scheme, or an “Enhanced Partnership” (EP) with local bus operators. If they did neither then they would not receive discretionary bus funding from the DfT. Apart from Greater Manchester, all local authorities have, so far, chosen the EP option.

An EP Scheme entails an exchange: local authorities, for example, may agree to fund bus lanes, parking restrictions or other facilities which make bus services more attractive and profitable. Operators, in return, agree to a set of standards, such as on the time and frequency of services and vehicle standards.

In its inquiry into the Implementation of the National Bus Strategy, the Transport Committee said EPs were “a largely untested” idea and the “Government has made a big bet on them being the right model. It must carefully monitor how well they are working and ensure appropriate contingencies are in place.”

For more information see the Commons Library Briefing Paper The National Bus Strategy: Bus policy in England outside London.

How can local authorities in Scotland and Wales have more control over buses?

Scotland

Part 3 of the Transport (Scotland) Act 2019 provided powers for local transport authorities to run their own bus services; franchise bus services in their areas; or enter into a Bus Service Improvement Partnerships (BSIPs) with bus operators within their areas. These powers were brought into force on 4 December 2023 by regulations.

The Scottish Government has created a Community Bus Fund (CBF). Local authorities can apply for CBF funding to both help them prepare potential franchising or partnership schemes.

Section 34 of the Transport (Scotland) Act 2019 gives local transport authorities the power to run local bus services that they were previously prohibited from doing under the Transport Act 1985. The Scottish Government has issued guidance on this.

Wales

The Welsh Government published a White Paper on bus reform in March 2022, titled One network, one timetable, one ticket: planning buses as a public service for Wales. This committed to:

  • removing the Transport Act 1985 ban on council-run bus companies
  • pursuing franchising, co-ordinated at a local, regional and ultimately national level, with Welsh Ministers bearing revenue risk and co-ordinating bus services with train services

Unlike the Bus Services (Wales) Bill (which was introduced and then withdrawn in 2020), the 2022 White Paper removed an alternative option for local authority/bus operator ‘partnerships’, and focus solely on franchising:

a [partnerships] system does not allow us, quickly and surely, to deliver a ‘One Network, One Timetable, One Ticket’ system across Wales that works alongside trains. We believe that to achieve the pace and certainty that the climate emergency demands of us bus networks in Wales need to be franchised. That assessment concluded that, even taking the conservative (i.e. high) cost estimate of implementing franchising at the individual local authority level, the benefits available from franchising outweigh those delivered either by partnership models or the current legislative framework. It also shows that if significant wider investment is made in the bus system, franchising continues to deliver more benefits than partnerships as an alternative.

Further information on these reforms can be found in the Senedd Research article, Bus services on life support: can franchising deliver for Wales?

How are taxis and PHV services regulated?

In Great Britain, taxi and PHV licenses are issued by local licensing authorities, which are usually local councils, with the exception of TfL in London.

In Northern Ireland taxi licences are issued centrally via the Department for Infrastructure and the Driver and Vehicle Agency. In all parts of the UK, and for both taxis and PHVs, three licences are required: driver licences, operator licences, and vehicle licences.

According to the Local Government Association’s Councillor Handbook for Taxi and PHV Licensing, councils typically:

  • set a local framework for the licensing of taxis and PHVs. This can cover fares, standards for drivers and vehicles and limits on the number of taxis that are allowed to operate;
  • consider licence applications;
  • issue, review and revoke licences;
  • carry out inspections and take enforcement action.

Taxi licensing authorities in England and Wales are required to abide by Statutory Taxi and Private Hire Vehicle Standards, which are primarily aimed at safeguarding children and vulnerable adult passengers.

In England, the DfT has published non-statutory best practice guidance for licensing authorities, which was updated in November 2023.

In Wales, licensing authorities and drivers should abide by the conditions set out by the Welsh Government.

In Scotland, central responsibility for taxis and PHV licensing lies with the Justice Directorate of the Scottish Government (having moved from Transport Scotland, who were previously responsible) who have their own best practice guidance for licensing authorities.

Under section 70 of the Local Government (Miscellaneous Provisions) Act 1976 councils in England and Wales may charge fees to cover the costs of their regulatory activities. However, councils are not allowed to use these fees to subsidise other forms of council activity, and are required to consult upon the fees they intend to levy through a public notice procedure.

The Government said in 2019 that there should be national minimum standards for taxi and PHV licensing in England, and that it will take forward legislation to introduce such standard when parliamentary time allows, a commitment it repeated in October 2022.

Other topics addressed in this paper

This paper also answers FAQs on the following topics:

Bus services: General

Definitions of local bus services; municipal bus services; the role of Traffic Commissioners; changes to bus routes; bus passenger behaviour; accessibility

Bus funding, fares and concessions

Bus funding; green bus funding; bus fares; contactless ticketing; bus passes, community transport

Taxis and Private Hire Vehicles

Regulation of taxis and Private Hire Vehicles; limits on taxi numbers; ‘cross-border’ taxis; minibuses; complaints

Further information on related topics can be found in Commons Library briefings on: 

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