ITEM NO.
REPORT OF THE ASSISTANT DIRECTOR OF LEGAL SERVICES
To the: LICENSING REGULATORY PANEL
On:
TITLE:
THURSDAY 23RD SEPTEMBER, 2004
TAXI LICENCES - UNMET DEMAND
RECOMMENDATIONS:
It is recommended that Halcro Limited be selected to
carry out the survey on Unmet Demand.
EXECUTIVE SUMMARY: The Council is required to carry out a survey to assess
whether there is any Unmet Demand for taxis.
BACKGROUND DOCUMENTS:
None
ASSESSMENT OF RISK:
Low
THE SOURCE OF FUNDING IS:
Existing Licensing Budget
LEGAL ADVICE OBTAINED:
Ian Sheard, Assistant Director (Legal)
FINANCIAL ADVICE OBTAINED:
N/A
CONTACT OFFICER:
Martin Seel ext. 3115
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WARD(S) TO WHICH REPORT RELATES:
All
KEY COUNCIL POLICIES:
-
BACKGROUND:
Under Section 37 Town Police Clauses Act 1847, amended by Section 16 of the
Transport Act 1985, District Councils’ have had the power to restrict the number of
taxi licences they issue, but only if they are satisfied that there is no significant unmet
demand for taxi services in their area.
The Council can, therefore, grant at least such numbers of taxi licences as it considers
necessary to ensure that there is no significant unmet demand, or refuse to grant taxi
licences provided that it is satisfied that there is no significant unmet demand.
Salford Council adopted a policy of restrictions in 1976 under the above legislation.
The numbers were limited to 78 and have remained unchanged since that date. The
decision to restrict was made in the belief that there was no significant unmet demand
and this view has been held up to the present time.
In March, 2003, the Government commissioned The Office of Fair Trading to carry
out a market study to establish whether or not, in present times, Local Authorities
should still have the power to restrict the number of taxi licences they issue.
The results of the study were published in November 2003 and included an action
plan to cover restrictions on the number of taxi licences issued by Licensing
Authorities.
Government’s Position
The Government responded to the OFT report on 18th March, 2004, and made it clear
that it believes restrictions should only be retained where there is shown to be clear
benefits for the consumer and that Councils’ should publicly justify their reasons for
retention of restrictions and how decisions and numbers have been reached.
This 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.
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However, the Government also makes it clear that Local Authorities remain best
placed to determine local transport needs and to make decisions about them in the
light of local circumstances. It is not, therefore, proposing at this time to take away
the power to restrict taxi licences from Local Authorities.
Government’s Advice to Local Councils
As a result of the findings of the OFT survey and the Government’s response, the
Department of Transport has issued a directive to all Local Authorities.
The advice is that Local Authorities who restrict the number of licences they issue,
should review the case for their restriction policy and make the impending report
public by the 31st March, 2005.
Salford Council’s Position
As previously mentioned, Salford Council has currently a restriction policy in force
and the numbers have remained unchanged since 1976. The policy has always been
justified in the belief that there has never been a significant unmet demand for further
licences, based on the requirements of the Act that the Council is satisfied in relation
to its knowledge of the local needs and circumstances in the area.
Included in the advice given to Local Authorities by the Department of Transport, is
that to enable them to make a case for further restrictions, Local Authorities must be
confident with regard to the situation in their area and if there is no evidence to
support their policies, then consideration must be given to carrying out a survey for
significant unmet demand.
Many Local Authorities, in order to justify their policies of either restriction or
deregulation, already carry out independent surveys of this type and are, therefore,
able to support their decisions if challenged through the Courts.
Salford Council has never carried out such a survey and are, therefore, currently in the
position where the presence or absence of significant unmet demand cannot be
proven.
It is, therefore, believed that in order to defend its existing policy of restriction and to
determine, by recorded evidence, whether or not there exists a significant unmet
demand for Hackney services within the Salford area, it is deemed necessary to carry
out an independent survey to:-
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1)
Advise on the action required to restore a position of no significant unmet
demand, and
2)
To prepare the basis for this Authority to make a submission to the
Department of Transport in March 2005, as requested by the Government in
their response to the OFT’s report on this subject.
The surveys themselves comprise of many hours of observations at taxi ranks,
interviews with the general public, postal questionnaires and consultations with
numerous interested parties.
Because of the complexity of the studies, only a limited number of specialist
Transport Management Consultant companies are able to provide the necessary
expertise.
A list of four companies has been compiled, based on endorsements provided by
neighbouring Local Authorities. They have been approached and, as a result, have
forwarded their action plans and costing levels for the study.
They are as follows:1.
Messrs. Faber-Maunsell, Warrington
The estimated costing provided by this company is £16,000, exclusive of
VAT. The time scale was quoted as up to 3 months. The quote is based on
studies carried out with other similar sized Local Authorities.
2.
Messrs. Kielder Newport West Limited, Burnley
Estimated costing is £6,695 exclusive of VAT. The time scale quoted is 6
working weeks. The costing is based on information provided by the
Council’s Licensing Officer.
3.
‘Halcro’, Leeds
Estimated costing is £8,968 plus VAT. The time scale quoted is up to 13
weeks. The quote is based on information provided by the Council’s
Licensing Officer during a personal visit by a representative of the Company.
Halcro also provide an alternative method of carrying out a study. The system
uses a mathematical model that enable the company to predict whether there is
an unmet demand market, based in the results of previous studies. This
method is said to provide the potential for a quick and cost effective way of
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determining the existence of significant unmet demand and at £6,158, is
cheaper than the rank observation method, but will still provide the basis for
the defence of Council’s policy.
4.
Transport Planning (International) Limited, Huddersfield
Estimated costing of £5,800 exclusive of VAT. The timescale is 12 weeks.
The costing is based in information provided by the Council’s Licensing
Officer.
The costing quotes provided by the listed companies are estimated and could vary,
dependent on which study module is best suited for this Authority. It must be
remembered that no survey has ever been carried out by Salford Council since their
restriction policy was imposed and, therefore, no previous data is available.
Members of the Licensing Regulatory Panel are asked to study this report with a view
to authorising the commission of a survey for the reasons stated.
In helping Members decide, it has been discovered that the companies Halcro and
Transport Planning (International) Limited of the four listed, are the most experienced
in their field.
Halcro are arguably the market leaders and the longest established, having carried out
surveys for Manchester City Council, Wigan Council and many others throughout the
UK and Europe.
Transport Planning (International) Limited have a similar pedigree and have carried
out numerous studies in the UK and abroad.
Of the other two companies, Faber Maunsell’s costing figures appear quite high in
comparison.
KWN Limited, the final company listed, appear to have the same expertise and
experience as Halcro and Transport Planning (International), albeit they are a smaller
organisation.
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