Community transport in Ely and Soham under threat as county council study implications of Department of Transport ruling

Jo Philpott from FACT.

Jo Philpott from FACT. - Credit: Archant

The Government has moved to halt community transport providers such as the Ely and Soham For Community Transport (ESACT) from competing unfairly with the taxi industry.

The Department of Transport warned that operators whose activities mirror that of a bus company – i.e. employing paid drivers and touting for commercial contracts – must hold a public services vehicle (PSV) operator’s licence.

Lib Dem councillor Lorna Dupre says ESACT operate a number of services for the county council, including most recently winning the contract to provide the new ‘East Cambs Connect’ minibus service set up following cuts to a number of bus services.

She said: “It’s early days, and it’s not yet clear how all of this will work out. But at the very least it could cause some disruption while it is resolved, and at worst it could mean current contracts being withdrawn and re-tendered.”

For years the taxi industry has campaigned to halt the proliferation of community transport providers who on the one hand can secure charity grants and on the other can build up fleets of vehicles to under cut taxi firms on home to schools contracts.

ESACT is part of the Fenland Association of Community Transport (FACT) that also runs the Huntingdon equivalent (HACT).

Until now they have relied on section 19 and section 22 of the Transport Act of 1985 that allow them to provide transport for disadvantaged communities but at the same they have developed substantial portfolios of commercial work.

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Cambridgeshire is among those councils that have turned a blind eye to the regulations that insist holders of these licences must operate on a not-for-profit basis and that drivers must be voluntary.

Stephen Fidler, the DfT’s head of buses and taxis division, wrote to local councils and the traffic commissioners last week reminding them of a ruling by the Driving and Vehicle Standards Agency (DVSA) on a community transport row in Derbyshire.

Mr Fidler that although the case was specific to Derbyshire it had wider implications for the industry since any operator that has contract work, employs paid drivers and wins commercial contracts in an open market can no longer be regarded as carrying out its activities exclusively for non-commercial purposes.

That means operators – and that will include FACT and ESACT – will need to consider a fundamental change in the way they run if they wish to carry on with commercial work.

The DfT is to consult with local councils and Mr Fidler said there has been mixed messages about the law that have led to the fact that there may be “some organisations that are relying on such permits inappropriately”.

Cllr Dupre said that many community transport organisations have been operating under special arrangements established for ‘non-commercial’ transport operations.

“Under these special arrangements, drivers are regulated to a different standard than that which applies to commercial operators,” she said.

“This has caused friction for some time with drivers of hackney carriage and private hire vehicles, who have to comply with more demanding standards and have claimed that they face unfair competition from community transport organisations doing what amounts to commercial work.

“The DVSA has now ruled that these less stringent requirements do not necessarily apply to community transport organisations if they are carrying out commercial-type contracts won from a local authority in competition with other providers.

“And if such organisations are carrying out any services ‘exclusively for non-commercial purposes’, then all of the services they offer must be carried out to standards applied to commercial operators.”

David Humphrey, vice chairman of the Cambridgeshire Coach and Taxi Drivers Association (CCTDA) said the issue only arose with FACT and ESACT after their management developed “commercial ambitions that brought them into direct conflict with hard working private companies”.

He said: “On top of massive funding advantages, we have always maintained they have been using an illegal loophole to undertake and support their massive recent commercial expansion. This appears to have now been confirmed.

He said that since 2010 FACT have doubled their fleet size and their commercial revenue has grown by over 500 per cent, their 2016 accounts indicate approximately 75 per cent of their earned income was generated through commercial contracts “so it is difficult to believe FACT wasn’t aware of the exclusively non commercial element of the exemption”.

FACT manager Jo Philpott, who led the team that took over ESACT in 2015, said: “We are liaising with the authorities and other relevant agencies in understanding what this may mean for the community transport sector.”

A county council spokesman said they had been in touch with community transport operators “to determine their approach and response to the clarification letter from the DfT”.

The spokesman said: “We are treating this as urgent but will take no action until we have considered the responses provided.”

The county council is mid way through a £50,000 investigation into FACT begun as a result of complaints by the taxi industry over a range of issues ranging from funding, award of contracts and memberships.

A council spokesman said that if changes are needed in the light of the most recent DVLA ruling “and we need to re-tender these contracts, we have full contingency plans for this.

Following the announcement last year of the inquiry in FACT, East Cambs Council held back a £13,000 grant pending the outcome.