PART IV continued
(1)Where an order is made under section 66(2) of this Act, the council or (as the case may be) each of the councils to whom the order applies shall, before the end of that council’s preparatory period, form (whether alone or jointly with any other council operating a bus undertaking) one or more companies for the purpose of carrying on—
(a)activities of any description included among the activities of the bus undertaking of that council or (as the case may be) of any of the councils concerned in the formation of the company or companies in question;
(b)activities of any other description included among the activities of any joint undertaking of which that council’s bus undertaking, or (as the case may be) the bus undertaking of any council so concerned, forms part; and
(c)any other activities which appear to the council or (as the case may be) to both or all of the councils so concerned to be incidental to or connected with any activities within paragraph (a) or (b) above or to be capable of being conveniently carried on in association with any such activities.
(2)Any company formed under this section shall be a company limited by shares registered under the M1Companies Act 1985.
(3)Subject to subsections (4) and (5) below, a council’s bus undertaking shall be regarded for the purposes of this Part of this Act as forming part of a joint undertaking if the services for the carriage of passengers by road provided in the course of the activities of the council’s bus undertaking are wholly or mainly provided under any agreement for—
(a)the provision or operation of those services by a body acting on the joint behalf of that council and one or more other councils; or
(b)the operation of those services by any company operating those services in conjunction with services for the carriage of passengers by road provided by that company.
(4)Subsection (3)(a) above only applies where the agreement provides for the distribution among the parties on its termination of—
(a)all assets, or the proceeds of all assets, used or appropriated for use for the purpose of providing services for the carriage of passengers by road under the agreement; or
(b)all such assets or proceeds excluding only land or the proceeds of disposal of land.
(5)Subsection (3)(b) above only applies where—
(a)the agreement includes provision for securing that the parties on termination of the agreement hold shares of equal value in assets required to be brought into account on termination of the agreement; and
(b)those assets include all assets so used or appropriated for use.
(6)References in this Part of this Act, in relation to a council whose bus undertaking forms part of a joint undertaking, to the joint undertaking are references to all activities carried on, or (according to the context) to all property used or appropriated for use and all rights and liabilities subsisting for the purposes of any activities carried on, in pursuance of the agreement by reference to which that council falls within subsection (3) above.
(1)Subject to subsection (2) below, a council to whom section 67(1) of this Act applies shall, before the end of that council’s preparatory period, submit to the Secretary of State a scheme providing for the transfer to a company or companies formed by that council under that section of—
(a)such of the property, rights and liabilities of the council comprised in the council’s bus undertaking; and
(b)such other property, rights and liabilities of the council;
as it appears to the council to be appropriate to transfer to the company or companies in question.
(2)This section does not apply to a council whose bus undertaking forms part of a joint undertaking, except where any of the activities of the council’s bus undertaking (“the separate activities”) are carried on by the council otherwise than in pursuance of any such agreement as is mentioned in section 67(3) of this Act; and in the latter case the reference in subsection (1)(a) above to property, rights and liabilities of the council shall be read as limited to property used or appropriated for use and rights and liabilities subsisting for the purposes of the separate activities.
(3)Two or more councils to whom this section applies may submit a joint scheme for the purposes of subsection (1) above; and in any such case the scheme may provide for the transfer of any property, rights and liabilities within that subsection as it applies to any one of those councils to a company or companies formed under section 67 of this Act by any other of those councils.
(4)In preparing a scheme for the purposes of subsection (1) above the council or councils concerned shall take into account any advice given by the Secretary of State as to the provisions he regards as appropriate for inclusion in the scheme (and in particular, but without prejudice to the generality of that, as to the description of property, rights and liabilities it is in his view appropriate to transfer to the company or companies in question).
(5)A scheme under this section shall not come into force until it has been approved by the Secretary of State or until such date as the Secretary of State may, in giving his approval, specify; and the Secretary of State may approve a scheme either without modifications or with such modifications as, after consultation with the council or councils concerned, he thinks fit.
(6)If the Secretary of State is not satisfied that a scheme submitted under subsection (1) above accords with any such advice given by him as is mentioned in subsection (4) above, or would do so with appropriate modifications, he may, after consultation with the council or councils concerned, instead of approving the scheme substitute for it a scheme of his own, to come into force on such date as may be specified in the scheme.
(7)On the coming into force of a scheme under this section, the property, rights and liabilities affected by the scheme shall, subject to section 129 of this Act, be transferred and vest in accordance with the scheme.
(1)This section applies to a council to whom section 67(1) of this Act applies whose bus undertaking forms part of a joint undertaking (referred to below in this section and in section 70 of this Act as a council participating in a joint undertaking).
(2)Any council participating in a joint undertaking shall, before the end of that council’s preparatory period, submit to the Secretary of State written proposals for the transfer to a company or companies formed by that council under section 67 of—
(a)such of the property, rights and liabilities comprised in that council’s share of the joint undertaking (whether or not then vested in that council); and
(b)such other property, rights and liabilities of the council;
as it appeals to the council to be appropriate to transfer to the company or companies in question.
(3)In any case within section 67(3)(a) of this Act both or all the councils participating in the joint undertaking may submit joint proposals for the purposes of subsection (2) above; and in any such case the proposals—
(a)may release to each council’s share of the joint undertaking and (without prejudice to that) to all property, rights and liabilities of the body carrying on that undertaking; and
(b)may provide for the transfer of any property, rights and liabilities within subsection (2) above as it applies to each of those councils to a company or companies formed under section 67 of this Act by any one or more of those councils.
(4)Any proposals submitted to the Secretary of State under this section must include proposals with respect to the terms on which the agreement under which the joint undertaking is carried on (referred to below in this section as the operating agreement) should be terminated.
(5)Individual proposals submitted to the Secretary of State under this section by a single council participating in a joint undertaking must include proposals for the division of that undertaking between the parties to it and the determination of the property, rights and liabilities to be allocated to each as his share.
(6)In preparing their proposals for the purposes of subsection (2) above the council or councils concerned shall take into account any advice given by the Secretary of State as to the provisions he regards as appropriate for inclusion in the proposals (and in particular, but without prejudice to the generality of that, as to the description of property, rights and liabilities it is in his view appropriate to transfer to the company or companies in question).
(7)Where in relation to any joint undertaking the Secretary of State has received under this section proposals submitted to him (whether individually or jointly) by the council or (if more than one) by both or all of the councils participating in the undertaking, he shall, after considering those proposals and consulting the council or councils concerned, make an order in accordance with the following provisions of this section and section 70 of this Act.
(8)Before making such an order in any case within section 67(3)(b) of this Act the Secretary of State shall—
(a)give the company carrying on the joint undertaking an opportunity of making written representations with respect to any proposals submitted to the Secretary of State in relation to that undertaking by the council concerned; and
(b)consider any such representations made to him within such time as he may allow for the purpose.
(9)An order made by the Secretary of State under this section with respect to any joint undertaking may make provision—
(a)where joint proposals were submitted under subsection (3) above with respect to that undertaking, for the transfer in accordance with the proposals of—
(i)all property, rights and liabilities of the body carrying on that undertaking; and
(ii)such of the property, rights and liabilities of the councils participating in the joint undertaking as may be specified in the order;
(b)where individual proposals were submitted by any council participating in the joint undertaking, for the division of that undertaking between the parties to it and the determination of the property, rights and liabilities to be allocated to each as his share;
(c)in a case within paragraph (b) above, for the transfer in accordance with the proposals submitted by any such council of—
(i)such of the property, rights and liabilities comprised in that council’s share of the joint undertaking as determined by or under the order (whether or not then vested in that council) as may be specified in the order; and
(ii)such other property, rights and liabilities of that council as may be so specified;
and, in any case within section 67(3)(b) of this Act, for the transfer to the company carrying on the joint undertaking of any property, rights and liabilities of the council concerned which are comprised in that company’s share as determined by or under the order;
(d)for the transfer to such person as may be so specified from any council participating in the joint undertaking, or from the body carrying on the undertaking, of all such functions as may be determined by or under the order, being functions conferred or imposed on that council or body under any Act for the purposes of or in connection with the joint undertaking;
(e)for determining the effect of any transfer under the order in relation to persons employed in the joint undertaking or any part of it;
(f)for the protection of the interests of persons who by virtue of any transfer under the order fall to be treated as persons employed by the person taking that transfer;
(g)for the termination of the operating agreement on such terms as may be specified in the order; and
(h)in any case within section 67(3)(a) of this Act, for the dissolution of the body carrying on the joint undertaking.
(10)An order made by the Secretary of State under this section—
(a)may give effect to the proposals submitted to him under this section either without modifications or with such modifications as, after consultation with the council or councils concerned, the Secretary of State thinks fit; or
(b)if the Secretary of State is not satisfied that the proposals accord with any such advice given by him as is mentioned in subsection (6) above, or would do so with appropriate modifications, may make such provision in substitution for those proposals as the Secretary of State, after such consultation, thinks fit;
and references in subsection (9) above to an order’s making provision for the transfer of any property, rights and liabilities in accordance with any such proposals shall be read as referring to those proposals as approved by the Secretary of State or to any provision made by the order by virtue of paragraph (b) above, as the case may require.
(1)Any order under section 69 of this Act may contain such supplementary, incidental and consequential provisions as the Secretary of State thinks necessary or expedient for the purposes of the order, and in particular (but without prejudice to the generality of that) may include provision—
(a)for the assumption by any council participating in the joint undertaking and by any person to whom any property, rights and liabilities are transferred under the order of such liabilities to one another as may be determined by or under the order to be appropriate having regard to the financial arrangements of that council before the severance from the other activities of the council of the joint undertaking or (as the case may be) of any activities of that council for the purposes of the joint undertaking;
(b)for the settlement by a court or otherwise of any dispute or other matter arising in connection with the order;
(c)for making in any statutory provision relating to, or to a class of undertakings which includes, the joint undertaking, such amendments or repeals as may appear to the Secretary of State to be required in consequence of any transfer under the order;
(d)for the making by any person to whom any property, rights and liabilities are transferred under the order to any council participating in the joint undertaking of payments by way of contributions to the cost of any adjustments arising from the severance mentioned in paragraph (a) above; and
(e)with respect to the consideration to be provided by any such person for any transfer under the order.
(2)Subject to subsection (3) below, any property, rights and liabilities for the transfer of which provision is made by an order under section 69 of this Act shall be transferred and vest in accordance with the order on such date or dates as may be appointed by the order for that purpose.
(3)Subject to the following provisions of this section, Schedule 4 to the 1968 Act (supplementary provisions as to certain transfers of property, rights and liabilities) shall apply to any transfer under subsection (2) above; and subsection (2) above shall have effect subject to the provisions of that Schedule.
(4)In Schedule 4 as it applies by virtue of subsection (3) above—
(a)any reference to a transfer by or a vesting by virtue of that Act shall be read as a reference to a transfer by or a vesting by virtue of the order; and
(b)the reference in paragraph 13(5) to the relevant provisions of that Act shall be read as including a reference to the relevant provisions of this Act.
(5)Any order under section 69 of this Act may make modifications in Schedule 4 for the purposes of its application to a transfer effected by that order.
(1)Where in the case of any council operating a bus undertaking the number of vehicles owned by the council and used or appropriated for use in providing any service for the carriage of passengers by road which requires a PSV operator’s licence does not exceed such number as may be specified by order made by the Secretary of State, the Secretary of State may on the application of that council grant to that council an exemption from section 66(1) of this Act for such period and on such terms and conditions as he thinks fit.
(2)Any such exemption shall cease to have effect if any term or condition applicable to it is contravened.
(3)Where a council operating a bus undertaking is in possession of a vehicle under an agreement for hire, hire-purchase, conditional sale or loan, that vehicle shall be treated for the purposes of subsection (1) above as owned by the council.
(1)References in this Part of this Act to a public transport company are references to any of the following—
(a)any company which was formed under section 59 of this Act by the Passenger Transport Executive for any passenger transport area and is for the time being a subsidiary of that Executive or of the Passenger Transport Authority for that area;
(b)any company which was formed under section 61 of this Act by the Passenger Transport Authority for any passenger transport area and is for the time being a subsidiary of that Authority; and
(c)any company which was formed by one or more councils under section 67 of this Act and is for the time being under local authority control.
(2)A company formed under section 67 of this Act shall be treated for the purposes of subsection (1)(c) above as under local authority control at any time when either—
(a)it is a subsidiary of a single district council in England and Wales or, in Scotland, of a single [F1council (other than the council for Orkney Islands, Shetland Islands or Western Isles)] or
(b)if two or more such councils who are members of the company were a single body corporate, it would be a subsidiary of that body corporate.
(3)References in this Part of this Act to a public transport company’s controlling authority—
(a)in relation to a company within subsection (1)(a) or (b) above, are references to the Passenger Transport Executive or (as the case may be) the Passenger Transport Authority of whom it is a subsidiary; and
(b)in relation to a company within subsection (1)(c) above, are references to the council or councils referred to in subsection (2) above.
(4)References in this Part of this Act to a composite authority are references to a controlling authority consisting of two or more such councils as are referred to in subsection (2) above, and the councils concerned are referred to as the component councils of that authority.
(5)For the purposes of this Part of this Act a public transport company is an associated company—
(a)in relation to a Passenger Transport Authority if that Authority or the Passenger Transport Executive for that Authority’s area are its controlling authority;
(b)in relation to a Passenger Transport Executive if that Executive or the Passenger Transport Authority for that Executive’s area are its controlling authority; and
(c)in relation to a district council in England and Wales or, in Scotland, a [F1council (other than the council for Orkney Islands, Shetland Islands or Western Isles)] if that council are its controlling authority or one of the component councils of a composite authority who are its controlling authority.
F1Words in s. 72(2)(a)(5)(c) substituted (S.) (1.4.1996) by S.I. 1996/974, art. 2(1), Sch. 1 Pt. I para. 7(d)
(1)It shall be the duty of any public transport company’s controlling authority to exercise their control over that company so as to ensure that the directors of the company include no more than the permitted maximum number of persons who are not full-time employees of the company.
(2)Following the transfer to a public transport company of its initial undertaking, it shall be the duty of that company’s controlling authority to exercise their control over that company so as to ensure that the directors of the company include not less than the required minimum number of persons who are full-time employees of the company holding positions of responsibility for the management of the company’s business or any part of it.
The reference above in this subsection to the transfer to a public transport company of its initial undertaking is a reference, in relation to any such company, to the transfer or (if more than one) the first transfer of property, rights and liabilities to that company under section 59(7), 61(11), 68(7) or 70(2) of this Act.
(3)Subject to subsection (5) below, it shall be the duty of any public transport company’s controlling authority to exercise their control over the company so as to ensure that the company—
(a)does not engage in activities in which the controlling authority have no power to engage or permit any body corporate which is its subsidiary to engage in any such activities;
(b)does not—
(i)borrow money from any person other than the controlling authority; or
(ii)permit any body corporate which is its subsidiary to borrow money from any person other than the company, any other subsidiary of the company, or the controlling authority;
with the exception in each case of borrowing by way of temporary loan or overdraft; and
(c)does not—
(i)raise money by the issue of shares or stock to any person other than the controlling authority; or
(ii)permit any body corporate which is its subsidiary to raise money by the issue of shares or stock to any person other than the company.
(4)Where a public transport company’s controlling authority are a composite authority, the duties imposed by the preceding provisions of this section are joint duties of both or all of the component councils of that authority; and subsection (3) above shall apply in any such case as if—
(a)paragraph (a) referred to activities in which none of the component councils have power to engage; and
(b)references in paragraphs (b) and (c) to the controlling authority were references to the component councils.
(5)Subsection (3)(a) above shall not apply—
(a)in the case of a public transport company whose controlling authority are the Passenger Transport Authority for any passenger transport area, in relation to activities within the powers of the Executive for that area or activities which were formerly within those powers but have ceased to be so by virtue of any order made under section 60 of this Act;
(b)in the case of a public transport company within section 72(1)(c) of this Act, in relation to activities which were formerly within the powers of the council who formed or of any council who participated in forming that company, but have ceased to be so by virtue of section 66(1) of this Act.
(6)The Secretary of State may by order prescribe—
(a)the permitted maximum number for the purposes of subsection (1) above; and
(b)the required minimum number for the purposes of subsection (2) above.
(1)A director of a public transport company who is paid for acting as such or is an employee of the public transport company or a subsidiary of the public transport company shall be disqualified for being elected or being a member—
(a)of any council who are that company’s controlling authority; or
(b)where that company’s controlling authority are a composite authority, of any of the component councils.
(2)Where a public transport company’s controlling authority are a Passenger Transport Authority for a passenger transport area in England and Wales, a director of that company who is paid for acting as such or is an employee of that company or a subsidiary of that company shall be disqualified for being appointed or being a member of that Passenger Transport Authority.
(3)Subject to the following provisions of this section, if a director of a public transport company is a member of any such council as is mentioned in subsection (1)(a) or (b) above or of any such Passenger Transport Authority as is mentioned in subsection (2) above he shall not at any meeting of that council or Authority—
(a)take part in the consideration or discussion of any contract or proposed contract with, or any other matter relating to the activities of, the public transport company or a subsidiary of that company; or
(b)vote on any question with respect to any such contract, proposed contract or other matter.
[F1(3A)Subject to the following provisions of this section, where a director of a public transport company is a member of the executive of any such council as is mentioned in subsection (1)(a) or (b) above which are operating executive arrangements under Part II of the Local Government Act 2000, he shall not, in the course of the discharge of any function that is the responsibility of the executive, take any action in the consideration, or the making of any decision with respect to any contract or proposed contract with, or any other matter relating to the activities of, the public transport company or a subsidiary of that company.
(3B)Subsection (3) or (3A) above shall not prohibit a person from taking part in the consideration or discussion of, or from voting on any question with respect to, a local transport plan or bus strategy.]
[F2(4)The Secretary of State may grant a written dispensation from subsection (3) or (3A) above in the case of any individual member, except that no such dispensation may be granted in the case of a member of a council’s executive acting alone.]
(5)Any such dispensation—
(a)may extend both to the consideration or discussion of any such contract, proposed contract or other matter and to voting with respect to it, or to either alone;
(b)may relate to contracts, proposed contracts or other matters of all descriptions or of any particular description specified in the dispensation; and
(c)may be withdrawn or varied at any time by a notice in writing given by the Secretary of State to the member in question.
[F3(6)The Secretary of State may confer exemptions from subsection (3) or (3A) above either generally or in the case of any class or description of members except that no such exemption may be granted in the case of a member of a council’s executive acting alone; and—
(a)subsection (5)(a) and (b) above shall apply in relation to any such exemption as they apply in relation to any dispensation that may be granted under subsection (4) above; and
(b)any such exemption may be withdrawn or varied at any time by the Secretary of State.]
(7)If any person fails to comply with subsection (3) [F4or (3A)] above he shall for each offence be liable on summary conviction to a fine not exceeding level 4 on the standard scale, unless he proves that he did not know that a contract or proposed contract with, or any other matter relating to the activities of, the company concerned was the subject of consideration at the meeting in question.
(8)A prosecution for an offence under this section shall not, in England and Wales, be instituted except by or on behalf of the Director of Public Prosecutions.
(9)A council who are a public transport company’s controlling authority or one of the component councils of such an authority, and any Passenger Transport Authority for a passenger transport area in England and Wales who are a public transport company’s controlling authority, may by standing orders provide for the exclusion of a member of that council or authority who is a director of that company from a meeting of that council or Authority while any contract or proposed contract with, or any other matter relating to the activities of, the public transport company or a subsidiary of that company is under consideration.
(10)Subsections (3) and (9) above shall apply as respects members of—
(a)a committee of any such council or Passenger Transport Authority as is mentioned in subsection (9) above; or
(b)a joint committee of two or more local authorities one or more of whom is such a council or Passenger Transport Authority;(including in either case a sub-committee), as they apply in respect of members of that council or Authority, but with the substitution of references to meetings of any such committee for references to meetings of that council or Authority.
(11)In subsection (10)(b) above, “local authority”—
(a)as respects England and Wales, has the same meaning as in the 1972 Act, except that it includes also a metropolitan county passenger transport authority; and
(b)as respects Scotland, has the same meaning as in the M1Local Government (Scotland) Act 1973.
(12)For the purposes of section 94 of the 1972 Act or section 38 of the Local Government (Scotland) Act 1973 (disability of members of authorities for voting on account of interest in contracts, etc.) a member of any such council or Passenger Transport Authority as is mentioned in subsection (9) above who is a director of the public transport company in question shall not be treated as having a pecuniary interest in any contract or proposed contract with, or in any other matter relating to the activities of, the public transport company or a subsidiary of that company by reason only of any interest of his in that company or in a subsidiary of that company.
(13)The provisions of this section shall apply in relation to a director of a subsidiary of a public transport company as they apply in relation to a director of such a company.
F1S. 74(3A)(3B) substituted (E.) (11.7.2001) s. 74(3A) by S.I. 2001/2237, arts. 1, 2, 13(a)
F2S. 74(4) substituted (E.) (11.7.2001) by S.I. 2001/2237, arts. 1, 2, 13(b)
F3S. 74(6) substituted (E.) (11.7.2001) by S.I. 2001/2237, arts. 1, 2, 13(c)
F4WOrds in s. 74(7) inserted (E.) (11.7.2001) by S.I. 2001/2237, arts. 1, 2, 13(d)
C1S. 74 applied (with modifications) (E.W.) (1.2.2005) by The Local Authorities' Plans and Strategies (Disapplication) (England) Order 2005 (S.I. 2005/157), art. 7(2)(b), Sch. 2 Pt. 2 para. 2 (with art. 7(4))
E1This version of this provision extends to England only; a separate version has been created for Wales and Scotland only
M11973 c. 65
(1)A director of a public transport company who is paid for acting as such or is an employee of the public transport company or a subsidiary of the public transport company shall be disqualified for being elected or being a member—
(a)of any council who are that company’s controlling authority; or
(b)where that company’s controlling authority are a composite authority, of any of the component councils.
(2)Where a public transport company’s controlling authority are a Passenger Transport Authority for a passenger transport area in England and Wales, a director of that company who is paid for acting as such or is an employee of that company or a subsidiary of that company shall be disqualified for being appointed or being a member of that Passenger Transport Authority.
(3)Subject to the following provisions of this section, if a director of a public transport company is a member of any such council as is mentioned in subsection (1)(a) or (b) above or of any such Passenger Transport Authority as is mentioned in subsection (2) above he shall not at any meeting of that council or Authority—
(a)take part in the consideration or discussion of any contract or proposed contract with, or any other matter relating to the activities of, the public transport company or a subsidiary of that company; or
(b)vote on any question with respect to any such contract, proposed contract or other matter.
[F1(3A)Subject to the following provisions of this section, where a director of a public transport company is a member of the executive of any such council as is mentioned in subsection (1)(a) or (b) above which are operating executive arrangements under Part II of the Local Government Act 2000, he shall not, in the course of the discharge of any function that is the responsibility of the executive, take any action in the consideration, or the making of any decision with respect to any contract or proposed contract with, or any other matter relating to the activities of, the public transport company or a subsidiary of that company.
(3B)Subsection (3) or (3A) above shall not prohibit a person from taking part in the consideration or discussion of, or from voting on any question with respect to, a local transport plan or bus strategy.]
[F2(4A)The National Assembly for Wales may grant a written dispensation from subsection (3) or (3A) above in the case of any individual member, except that no such dispensation may be granted in the case of a member of a council’s executive acting alone.]
(5)Any such dispensation—
(a)may extend both to the consideration or discussion of any such contract, proposed contract or other matter and to voting with respect to it, or to either alone;
(b)may relate to contracts, proposed contracts or other matters of all descriptions or of any particular description specified in the dispensation; and
(c)may be withdrawn or varied at any time by a notice in writing given by the Secretary of State to the member in question.