Reform of taxi and private hire licensing in Wales: new Government White Paper

27 Feb 2019


By Tara O’Leary


In December 2018 the Welsh Government published Improving Public Transport: A Welsh Government White Paper on proposals to legislate for reforming the planning and delivery of local bus services and licensing of taxis and private hire vehicles and launched an accompanying public consultation. The White Paper sets out extensive proposals for reform of taxi and private hire licensing in Wales, and is likely to chart the course of reform in that jurisdiction.

The most radical proposal recommends the abolition of local authority licensing powers, to be replaced by a single, centralised Welsh national licensing authority: the Joint Transport Authority (“JTA”), which would also regulate other forms of public transport. The purpose of the JTA for taxis and private hire vehicles (“PHVs”) would be to create a standardised licensing area encompassing all of Wales, and to streamline enforcement and information-sharing. The White Paper also puts forward a number of other proposals designed to improve public safety.

The White Paper marks a conscientious attempt to implement some of the Law Commission’s key recommendations on taxi and PHV licensing from 2014. It also closely parallels the legislative plans and draft statutory guidance recently launched by the Department for Transport (“DfT”). However, the White Paper goes further than the English proposals by proposing to reshape the framework and foundations of the localised licensing structure.

Taxi and PHV licensing in Wales is currently regulated by the same legislation which applies in England: the Town Police Clauses Act 1847 for hackney carriages and the Local Government (Miscellaneous Provisions) Act 1976 for PHVs.

However, with effect from 1 April 2018, the Wales Act 2017 devolved competence to the Welsh Ministers for “Licensing of taxis, taxi drivers, private hire vehicles, private hire vehicle drivers and private hire vehicle operators (but not enforcement by means of penalty points)”.

It has been apparent that the Welsh Government favoured reform of the existing system since at least 2012, when it submitted a formal response to the Law Commission consultation on taxi and PHV licensing. A consultation paper published in June 2017 proposed abolishing the distinction between hackney carriages and private hire vehicles but made no mention of a national licensing authority. Note that the former proposal has been dropped from the current consultation whereas the latter proposal has been introduced for the first time in the White Paper.

The current consultation

The White Paper of December 2018 sets out legislative plans to modernise the existing taxi and PHV licensing system, acknowledging that the existing regime is regarded by many as outdated and unfit for purpose. The White Paper also recognises that in Wales – perhaps more so than in many parts in England – taxis and PHVs provide an essential element of the transport network, particularly in rural and remote areas where other forms of public transport are limited or non-existent.

The White Paper aims to address three key identified problems in the existing regime:

  • Inconsistent licensing standards between districts, with different costs for operators and variable qualify and safety standards for passengers;
  • The absence of a statutory enforcement mechanism to deal with “cross border” operations; and
  • Difficulties in sharing safeguarding information amongst local authorities, which impedes enforcement against drivers licensed in one area and working in another.

It makes four key proposals to address these problems:

  1. Introducing national standards to eliminate or reduce existing variations between the 22 local authority districts in Wales;
  2. Strengthening powers to take enforcement action against vehicles operating “out-of-area”;
  3. Clarifying and improving powers to share relevant safeguarding information, possibly by creating a Welsh database to track refusals, suspensions and revocations; and
  4. Creating the Joint Transport Authority (“JTA”) as a national, centralised body which would take over all taxi and PHV licensing functions currently exercised by local authorities.

Proposals 1-3 would be implemented by way of legislative reform: national standards would be introduced by the Welsh Ministers in the form of Regulations, and enforcement powers would be introduced by amending ss. 60 and 61 of the 1976 Act to allow the licensing authority to suspend or revoke a licence connected to any vehicle operating in its area, i.e. even if licensed by another district. These changes are closely linked to Proposal 3, which contemplates the creation of a national database or other information-sharing mechanism to ensure that information about licence-holders and applicants can be easily shared for the purpose of safeguarding. Legislation may also impose – for the first time – a positive duty on licensing authorities to share information with one another to assist in their decision-making.

The proposed creation of a “JTA” would redirect all existing taxi and PHV licensing functions away from local authorities into a new, centralised public authority which would also have responsibility for regulating other forms of public transport. Its functions would include licencing, fee- and fare-setting, enforcement, hearing appeals arising from licensing decisions, prosecutions and deciding matters such as whether to apply quantity controls to taxis.

The White Paper expressly recommends the creation of the JTA, but the public consultation does also seek views on the implementation of Proposals 1-3 in the event that centralisation does not take place.

This particular proposal goes much further than the recommendations of either the Law Commission or the Task and Finish Group, though it appears to take some inspiration from the centralisation of the London boroughs’ licensing functions under the umbrella of Transport for London.

Otherwise, the remaining proposals are similar to the plans recently published by the DfT for reform of taxi and PHV licensing in England. In some respects, Wales appears both ahead of and behind England. On the one hand, the DfT has already published draft Statutory Guidance for consultation, whereas the White Paper says that draft Regulations on Welsh national standards will be subject to further consultation in due course. On the other hand, the DfT has committed itself to legislative reform only “when time allows”, whereas one can reasonably assume that the legislative agenda in Wales is presently less constrained than in Westminster. It is therefore possible that we will see ultimate change on the ground in Wales sooner than in England.