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DfT
letter
(21/7/2004)
The
main text of the Department for
Transport's June letter to local authorities
regarding the Government's Action Plan.
Rupert
Cope
Head of Taxi/PHV Branch
Dear Sir/Madam,
Government
request to all councils restricting the
number of taxi licences in England and
Wales outside London to review Quantity
Control policies
1. I am writing to ask you, following
the announcement of a Government Action
Plan for taxis (and private hire
vehicles), to review your local policy
to restrict the number of taxi licences
that you grant and to publish the
outcome by 31st March 2005.
Background
to this letter
2. As you will know, the Office of Fair
Trading published a market study into
the regulation of taxis and private hire
vehicles in the UK in November 2003. The
Government responded in respect of
England and Wales on 18th March by means
of a Written Statement in the House of
Commons.
3. The Written Statement included an
Action Plan for Taxis and Private Hire
Vehicles that I attach as annex A (Gov
Statement 18/03/04) to this letter.
Paragraphs 1 to 11 of the Action Plan,
in particular paragraphs 4 to 8, cover
restrictions on the number of taxi
licences issued by licensing
authorities.
4. As a result, this letter is for the
attention of those taxi licensing
authorities in England and Wales outside
London that restrict the number of taxi
licences that they issue. I am
addressing this letter to the Chief
Executives of the councils listed at
Annex B (list of quota councils). For
ease, I enclose a further copy for the
appropriate taxi licensing officer. I am
also copying this letter for information
to the Chief Executives of County
Councils and Passenger Transport
Executives who will need to include
justification of local policies to
restrict taxi licences in their Local
Transport Plans .
The
power to issue taxi licences
5. Section 37 of the Town Police Clauses
Act 1847, as amended by section 16 of
the Transport Act 1985, enables
district/borough councils or unitary
authorities to license taxis within
their area and to restrict the number of
taxi licences issued only if they are
satisfied that there is no significant
unmet demand for taxi services in their
area.
6. In effect, this means that a council
can:
· issue a taxi licence to any applicant
meeting the local application criteria
· grant at least such number of taxi
licences as it considers necessary to
ensure that no significant unmet demand
remains
· refuse to grant additional taxi
licences provided that it is satisfied
that there is no significant unmet
demand.
However
· if a council is unsure of the
presence or absence of significant unmet
demand it is not in a position to refuse
to grant a taxi licence provided the
application criteria are met.
The
Government's position
7. The Action Plan makes clear that the
Government believes restrictions should
only be retained where there is shown to
be a clear benefit for the consumer, and
that councils should publicly justify
their reasons for the retention of
restrictions and how decisions on
numbers have been reached. Thus, the
Government considers that, unless a
specific case can be made, it is not in
the interests of consumers for market
entry to be refused to those who meet
the application criteria.
8. However, the Government also makes
clear in the Action Plan that local
authorities remain best placed to
determine local transport needs and to
make the decisions about them in the
light of local circumstances. So it is
not proposing at this time to take away
the power to restrict taxi licences from
local authorities.
What
we are asking you to do
9. Accordingly,
we ask you to review the case for
restricting taxi licences for your area
and to make that review public.
10. Though this is a new request, we do
not consider that this should be
burdensome in the light of what you
should already be doing for your
licensing area in respect of issuing
taxi licences.
11. It is of course for you to make the
case for your area in the light of your
local knowledge of local needs and
circumstances. Inevitably, this will
mean that you will need to know whether
or not there is any unmet demand for
taxi services in your area. For example,
if your understanding of (unofficial)
taxi plate values in your district is
that they are high, this would seem to
indicate that there is significant unmet
demand for taxis in your area.
12. Unless you are confident of the
situation in this regard in your area,
your consideration may therefore
necessitate an unmet demand survey.
However, such a survey may not be
necessary if a recent survey can be
demonstrated to have addressed the
issues adequately.
13. In those areas that need to
undertake a new unmet demand survey, the
Action Plan makes clear that for the
survey to be effective, latent demand
should be taken into account.
14.To help you formulate and carry out a
comprehensive review and reach a
satisfactory conclusion, we thought it
might be useful to provide some
questions that highlight the issues that
you will almost certainly need to take
into consideration. The checklist of
questions is at Annex C. Please note
that the checklist is not exhaustive,
but is offered in the spirit of aiding
local consideration.
15. In reaching your decision, we would
also ask you to take into account the
advice we issued to all councils about
local accessibility policies in
September 2002. In particular, if you
are lifting restrictions or issuing new
taxi licences because you have found
unmet demand in your area, we would urge
you to consider whether the new licences
should be for accessible vehicles.
16. We would encourage you to make all
the evidence gathered to support the
decision-making process available for
public scrutiny.
17. Those councils who have not
undertaken an unmet demand survey for
some time and now decide to do so, might
find it helpful to consult neighbouring,
local councils who have recent
experience of such surveys.
18. We
would ask you to make your conclusions
public by 31st March 2005 and would
appreciate a copy of them no later than
30th April 2005.
19. It seems to us that the outcome of
your review will be either (i) to
deregulate and thereby grant a taxi
licence to anyone meeting the
application criteria, or (ii) to
continue restricting the number of taxi
licences issued. In that instance, three
scenarios would appear to be possible
outcomes:
· maintaining the current limit of taxi
licences;
· granting a number of new licences to
meet the unmet demand that you have
identified by means of a new survey;
· granting a specific number of new
taxi licences each year.
Future
requirements
20. The justification by 31st March 2005
is a one-off requirement for local
councils. The Action Plan sets out the
following on-going arrangements for
councils continuing to restrict taxi
licences:
· a three yearly review, with published
conclusions
· justification of the local policy for
quantity restrictions in the 5 yearly
Local Transport Plan process.
21. The Action Plan commits the
Government to review the situation
regarding quantity controls in three
years' time, with a view to further
action if necessary.
22. We look forward to hearing from you.
Yours faithfully,
R F Cope
ANNEX C
Useful
questions when assessing quantity
controls of taxi licences
· Have you taken into account the
Government's view that quantity controls
should be removed unless a specific case
that such controls benefit the consumer
can be made?
Questions
relating to the policy of controlling
numbers
· Have you recently reviewed the need
for your policy of quantity controls?
· What form did the review of your
policy of quantity controls take?
· Who was involved in the review?
· What decision was reached about
retaining or removing quantity controls?
· Are you satisfied that your policy
justifies restricting entry to the
trade?
· Are you satisfied that quantity
controls do not:
- reduce the availability of taxis;
- increase waiting times for consumers;
- reduce choice and safety for
consumers?
· What special circumstances justify
retention of quantity controls?
· How does your policy benefit
consumers, particularly in remote rural
areas?
· How does your policy benefit the
trade?
· If you have a local accessibility
policy, how does this fit with
restricting taxi licences?
Questions
relating to setting the number of taxi
licences
· When last did you assess unmet
demand?
· How is your taxi limit assessed?
· Have you taken into account latent
demand, ie potential consumers who would
use taxis if more were available, but
currently do not?
· Are you satisfied that your limit is
set at the correct level?
· How does the need for adequate taxi
ranks affect your policy of quantity
controls?
Questions
relating to consultation and other
public transport service provision
· When consulting, have you included
etc
- all those working in the market;
- consumer and passenger (including
disabled) groups;
- groups which represent those
passengers with special needs;
- local interest groups, eg hospitals or
visitor attractions;
- the police;
- a wide range of transport stakeholders
eg rail/bus/coach providers and traffic
managers?
· Do you receive representations about
taxi availability?
· What is the level of service
currently available to consumers
(including other public transport
modes)?
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