Meeting documents

1 THE ISSUE

1.1 The Annual Progress Report of the Local Transport Plan recognises that a taxi policy is required in order to develop the integrated transport strategy for Bath and North East Somerset. This report presents a policy highlighting the key objectives.

1.2 The report also covers the issue of whether or not the Council should remove its current policy on the limitation on the number of hackney carriage vehicle licences in the city of Bath.

2 RECOMMENDATION

2.1 the Taxi Policy 2005, as provided in Annex A, be approved; and

3   FINANCIAL IMPLICATIONS

3.1 The cost of publishing and circulating the Taxi Policy is covered within the Council's Capital Programme for 2005/6.

3.2 As a result of delimiting the number of Hackney Carriage Licences there may be a need to expand the size of, or increase the number of, taxi ranks. However, there would no longer be a need to carry out Unmet Demand Surveys every 3 years in order to justify maintaining a limit.

3.3 It is assumed that, overall, the number of taxis plus private hire vehicles will remain about the same as at present with some private hire vehicles becoming hackney carriages. As a result, licensing costs are expected to remain the same.

3.4 It is anticipated that there will be savings in some areas of enforcement with increases in costs in other areas. Overall, there is not expected to be any significant change in costs.

3.5 The current estimated cost for an unmet demand survey is between £15,000 and £20,000. If the limitation policy is to continue then a survey will need to be carried out as soon as possible after the decision and every three years thereafter. However, the Bath Spa Taxis Association have made a provisional offer of paying for any unmet demand survey.

3.6 If the decision is taken to delimit the number of hackney carriage vehicle licences in zone 1 (Bath) then this may lead to a legal challenge from the existing hackney carriage trade. If a judicial review is called then this could cost the Council between £20,000 and £30,000 to defend.

4 THE REPORT

4.2 The Taxi Policy, provided at Annex A, has been produced following comments from many interested parties. The consultation process included workshops in June 2003 to discuss issues about the provision and operation of taxis in Bath and North East Somerset, and circulating the draft, entitled "Taxi Strategy", in September 2003 to over 100 consultees, including taxi operators, appropriate council officers, neighbouring local authorities, parish councils, libraries and other special interest and access groups in the area. Copies were also sent to the Regional Assembly and the Government Office for the South West. All Bath and North East Somerset Councillors were informed of the consultation document and its location on the Council's web site. All views received were considered in the revision process. A summary of the results of this consultation process is provided at Annex B.

4.3 In Bath and North East Somerset the licensing of taxis and private hire vehicles is undertaken by the Licensing Team which is part of Environmental and Consumer Services. The Licensing Team work closely with the Police and the Driver Vehicle Licensing Authority (DVLA) to ensure that public safety is maintained.

4.4 Bath and North East Somerset Council currently operates a two-zone system for licensing hackney carriages which it inherited from the former Bath City and Wansdyke District Councils.

4.5 Bath City Council historically limited taxi licences and its former area is currently retained as Zone 1 to which a limit of 89 taxis still applies. The former Wansdyke area, covering the rest of the local authority, had no limit on taxi licences and is identified as Zone 2.

4.6 In 1998 an independent survey into unmet demand was carried out, which recommended the continuation of the two zones and the regulation of 89 vehicles in Zone 1. This recommendation was subsequently adopted by the Housing and Public Protection Committee in 1999 and further endorsed in May 2000 following another report to the committee. A further unmet demand survey was due in 2003, but this was put on hold when the Government announced that the Office of Fair Trading (OFT) was going to carry out their own review of taxi regulation.

4.7 The recommendation of the report from the Office of Fair Trading study into the regulation of taxis and public hire vehicles in the UK, was that all local authorities should remove their limitation policies and allow market forces to dictate the number of taxis. The House of Commons Transport Committee published their opinion in February 2004 (The Regulation of Taxis and Private Hire Vehicle Services in the UK) - they were not convinced that the conclusions and recommendations were adequately supported by the evidence and criticised the limitations of the data which primarily arose from the limited time available for research.

"On the particular issue of restricting taxi licences, the Government considers that local authorities are best placed to judge local needs and circumstances, but where they restrict taxi licence numbers they should be able to justify their policy publicly, and continue to do so on a regular basis. Where such a policy cannot be justified, the Government would expect local authorities to derestrict. The Government itself will review the situation in three years, with a view to further action if it is needed."

4.9 The Department for Transport have written to all local authorities operating a limitation policy in June 2004 requesting them to review their local policy to restrict the number of taxi licences that they grant and to publish the outcome by 31^st March 2005 (following contact with the Department for Transport approval has been granted for this deadline to be extended to after the Executive Meeting) and to provide them with a copy of the outcomes by 30^th April.

4.11 The number of taxis and private hire vehicles licensed by Bath and North East Somerset Council, as at March 2005, is presented in Table 1. Alongside this information are the numbers of licences held in each area where the vehicles are fully accessible to disabled users.

Table 1: Number of Licensed Vehicles in Bath and North East Somerset in March 2005

4.14 If the Council decides to continue to limit numbers then an unmet demand survey will be required. However, the cost is high, with figures of £15,000 - £20,000 having been stated. The implications of carrying out a survey and then deregulating must also be considered. However, the Bath Spa Taxis Association have provisionally offered to pay for an unmet demand survey.

4.15 If the Council wishes to deregulate then relevant matters that need to be considered include:-

4.16 To improve accessibility for all, it is proposed that new hackney carriage vehicle licences will be granted only where operators and vehicles fulfil prescribed conditions, including a condition that the vehicle is fully wheelchair accessible.

4.17 Over 1000 consultations on the contents of this report were sent out on 10^th March 2005. These included all Councillors, Parish Councils, Resident's Associations and Forums, the 2 Chambers of Commerce, Hackney Carriage Drivers, Private Hire Drivers and Taxi Proprietors. The reports of this consultation will be reported to the Executive meeting.

4.18 It is recommended that, subject to consideration of the previous information and the consultation responses, the Taxi Policy is now ready for approval and the Council should remove the current limitations.

5 RISK MANAGEMENT

6 RATIONALE

6.1 Arguments for Continuing to Limit/Against De-Limitation

[However, regarding this aspect, the Office of Fair Trading states in paragraphs 4.76 - 4.79 of its report:

93It is argued that lifting quantity restrictions is unfair on those licence

holders who have paid a licence shortage premium to enter the taxi

market during times when quantity restrictions were in place, as they

bear the burden of being unable to recoup this cost when they exit the

market.94

93We have considered this view and conclude that protection of taxi

vehicle licence shortage premiums does not justify retaining quantity

controls. In economic terms the premium value attached to vehicle

licences in quantity restricted areas is an artificial one, created by the

constraints on the market caused by regulation. The premium value does

not relate to any effort of the licence holder to improve service levels and

quality, and therefore the licence holder has not `earned' it. Moreover, it

is unofficial - it is unrecognised by statute, and legal ownership of the

licence, and the licence plates attached to the taxi vehicle, remains at all

times with the LA that issued them.94

93Since section 16 of the Transport Act 1985 came into force on 6

January 1986, LAs in England and Wales outside London and in Scotland

have been permitted to restrict taxi licence quantities only if they

reasonably consider that there is no significant unmet demand for taxis

within their areas. LAs may lift quantity restrictions whether or not there

is unmet demand for taxis, and must lift quantity restrictions (whether

permanently or temporarily) if there is significant unmet demand. In 1985

the Department of Transport, the Scottish Development Department and

the Welsh Office suggested that LAs should consider lifting quantity

restrictions. As we have already noted, quantity restrictions are now only

in place in 45 per cent of UK LAs, and several LAs have lifted quantity

restrictions since the Transport Act 1985 came into force. Taxi licence

holders in areas where quantity restrictions apply have therefore been

aware for some time that these could be lifted at any time by their LA.94

93In our view the protection of certain taxi licence holders from a one off

loss of rental value that could lawfully occur under existing legislation

does not justify maintaining the market inefficiencies caused by taxi

licence quantity restrictions.94]

[In Bristol it was found that although the number of taxis increased by over 150% as a result of delimitation, the combined fleet of taxis and private hire vehicles increased by only four percent. (Source - Halcrow: Impact of Regulation on Taxi Markets - Case Study Analysis, July 2003)].

[some stands are currently under used].

[Quality controls will be maintained and continue to be enforced]

[The loss of private hire vehicles will be balanced by an increase in the number of taxis. If taxis move from Zone 2 to operate in the City of Bath, others could take their place as the unmet demand outside of Bath will present an opportunity to increase custom and takings, i.e. the market will find its own balance].

6.2 Arguments against Continuing to Limit/for De-Limiting

[figures of £15,000 - £20,000 are being stated for surveys. Further, the Office of Fair Trading in para. 4.52 of their report state:

93Unmet demand studies do not properly assess latent demand (i.e. the passenger who would choose to go by taxi if more were available or waiting times were lower)94 ].

[On 28^th October 2003, the Department for Transport issued proposals for the implementation of the taxi provisions of the Disability Discrimination Act 1995. In it was announced that the Department for Transport would set standards for wheelchair access and a range of other features to help disabled people use taxis, and introduce regulations in a 93first phase94 of authorities. Bath and North East Somerset is one of these 93first phase94 authorities with a requirement that all hackney carriages should be fully accessible by wheelchairs by 2010.]

[According to case law, the fares set by Local Authority's are maximum fares - it is open to taxi drivers to set lower rates if they wish].

[The Government's Response to the Transport Committee's Report on the Regulation of Taxis and Private Hire Vehicle Services in the UK, which followed the Office of Fair Trading Report, found:

9385there is no real evidence that waiting times are lower in areas without restrictions on the number of vehicle licences they issue, particularly if the telephone booking sector is also taken into account.94

and went on to say:

93There is no way we can be certain that lifting restrictions will not reduce the availability of taxis at off-peak hours, as vehicles are no longer shared by two drivers during a single day.94]

7 OTHER OPTIONS CONSIDERED

7.1 The production of a Taxi Strategy (Policy) is a commitment of the Council in the 2000 Local Transport Plan, and a short term objective in the response to the Best Value review process. No other options were considered.

7.2 In respect of the abolition of the two operating zones and the abolition of the limitation of the number of hackney carriage vehicle licences in zone 1 (Bath), the option of continuing to limit and maintaining the existing zoning has been rejected due to the balance of the rationale given in section 6.

8 CONSULTATION

8.1 Regarding the Taxi Policy (then called Taxi Strategy), consultations were carried out in June 2003 as set out in Paragraph 4.2.

8.2 In respect of this report on the Taxi Policy, the abolition of the two operating zones and the abolition of the limitation of the number of hackney carriage vehicle licences in zone 1 (Bath), consultations were carried out in March 2005 as set out in paragraph 4.17.

· promoting accessibility to everyday facilities for all, especially those without cars;

· improving safety for all travellers;

· contributing to an efficient economy and supporting sustainable economic growth in appropriate locations; and

· promoting the integration of all forms of transport and land-use planning, leading to a better, more efficient transport system.