Agenda item

The Committee received a report on the taxi and private hire licensing budget review and fees and charges and were asked to consider whether to agree the proposed fees and charges set out at Appendix A of the report prior to consultation and statutory advertising.

In July 2021, taxi and private hire fees and charges were approved as part of the implementation of a new Taxi and Private Hire Licensing Policy for Buckinghamshire, which came into effect in September 2021. The Licensing Service also went through the Better Buckinghamshire programme in 2021 and new structures for a harmonised Licensing Service, organised by specialism rather than geographical location, came into effect from the 1st September 2021. This created a single taxi and private hire licensing service serving the whole of Buckinghamshire and operating under the new Policy. Since September 2021, the Taxi Licensing Service had delivered policy changes as well as improvements in systems and processes, which had required significant resource to deliver. This included the implementation of the Department for Transport’s (DfT) Statutory Taxi and Private Hire Vehicle Standards, which were introduced in July 2020 and aimed to protect children and vulnerable adults from exploitation. The Service had also moved to a single back-office system and redesigned the way that the Service was provided. Having undertaken significant implementation and improvement work, the Service was now stable and operating in a business-as-usual fashion.

Taxi and private hire licensing fees could only be set at levels to recover such costs as were prescribed in law.  The Council could not make a profit from licence fees and any shortfall in revenue, if not met by licence fee payers, must be borne by the Council as a whole.  In practice, this meant that the costs of the service should be covered entirely by taxi licensing fee income into the Council.  Any surplus or deficit must be carried forward and form part of any subsequent review of fees. In July 2021, taxi licensing fees were set based on both a combination of the available legacy district council information on volumes of activity into the services pre the Covid-19 pandemic and assumptions on how the future harmonised Taxi Licensing Service and Policy would operate. A rolling full-service review of fees was generally carried out every 3 years. However, there were a number of uncertainties and assumptions around service provision at the time that the fees were set. Given this, assurances were provided to the Licensing Committee that a full annual review of taxi licensing budgets and fees and charge would be carried out a year into implementation of the new Policy.  This would enable the Service to fully understand any surplus or deficit at that point and ensure that any adjustments required could be considered.

As requested by the Licensing Committee a full budget review for taxi and private hire licensing was carried out between September and December 2022, one year on from the introduction of the new Policy and the single service structure and back-office system. The report presented the key findings of that review and the actions that had been taken as a result. The 2022/23 end of year budget position showed a forecast overspend position of £100k. Vacancies within the Service have been proactively managed over several months relative to the ongoing budget forecast position and as a result there was a 13.5% forecast underspend on employee costs over the 2022/23 period of £131k. However, application income into the services was 19.8% lower than was anticipated and therefore, the underspend on employee costs did not fully mitigate this budget impact. Additionally, running costs had increased by 28.2% over this period, in part reflecting increased supplier costs.There were two key factors that were likely to have impacted the level of income into the Service since September 2021. The Department for Transport (DfT) Taxi and private hire vehicle statistics: England 2022 showed that nationally the number of licensed drivers had fallen by 9.4% and continued to fall, likely as a result of the 2020 Covid-19 pandemic and drivers ceasing to drive and moving to other forms of employment. The other key factor that was likely to have impacted the level of income received was that, prior to the formation of Buckinghamshire Council on the 1st April 2020, drivers and operators who wanted to work across more than one of the legacy district council areas would have needed to have held a licence with each of the legacy councils to legally do so. As a consequence of resolutions passed by the Council in April 2021, which created a single administrative area for taxi and private hire licensing purposes, since 6th September 2021 only one licence was required for the respective activities of operator, vehicle and driver. Driver licences were issued for a 3-year period and operator licences for a 5-year period and therefore, where multiple licences were held, the licence holder was able to let older licences lapse and work under the newest licence issued, up to its expiry date.

The Council could not make a profit from licence fees and any surplus or deficit must be carried forward and recovered from the licensed trade over a rolling 3-year period. This meant that the forecast £100k overspend at year end for 2022/23 should be recovered across the next 3-year period and the budget and fees and charges review have incorporated this requirement. In order to ensure and sustain a cost neutral budget position, where cost recovery adequately funds the service, a combination of measures was required. This included reducing overheads within the taxi and private hire licensing service as far as was possible to reflect current demand levels and increasing fees and charges to the licensed trade. The Taxi Licensing Service was currently undertaking formal consultation with staff within the Service on proposed structure changes which, if implemented as proposed, would reduce salary overheads by £146K. The new structure would be implemented on the 1st May 2023, dependent on the outcome of the consultation (this was an indicative timeline and might change as a result of consultation).

The new fees, which were being proposed, reflected both the full staffing costs of running the service, as well as the support service costs, with likely pay award and inflationary uplifts. As required, this review had factored in recoverable costs incurred by the Council such as IT provision, administration, supplies and services etc. A fee schedule of the proposed fees and charges was provided at Appendix A of the report. A benchmarking exercise had been carried out of current fee levels charged by 12 neighbouring local authority areas and this was attached at Appendix B of the report. A comparison of the proposed fees against the current average fee charged across the neighbouring local authorities was attached at Appendix C of the report. Fees charged by Transport for London (TfL) were excluded from the calculation of average fees charged because they were not comparable in terms of scale and operation, although TfL fees had been provided for information purposes.

Whilst the Service was mindful of the impacts of an increase in fee to licensed drivers, the legislative framework on cost recovery and the increased activity associated with the implementation of the new Policy and Statutory Standards meant that fees must be increased to cover the costs of the service or be borne by the taxpayer. The legislation did not require the Council to make a precise calculation so as to arrive at an income which exactly meets the cost of the administration of the various licences. However, councils were required to take a reasonable and proportionate approach and should aim to set a fee level that would be sufficient to cover the cost but not make a surplus or deficit.

Given the uncertainties around the wider economy and the trends on driver and vehicle numbers reported within the taxi and private hire statistics for England data, it was proposed that the taxi and private hire licensing budget and fees and charges position be reported to the Licensing Committee in Q4 of 2023/24, providing the opportunity to ensure that the position would be as anticipated. In addition to this, the fees and charges would be reviewed annually in relation to any increase in RPI and where appropriate an increase would be applied to the fee to recover related increased costs to the Council. The Government were currently reviewing RPI and might replace it with another inflationary measure. If this was the case an annual increase in relation to any new measure prescribed, where appropriate, would be applied as a minimum to the fee to recover related increased costs to the Council.

If approved, the proposed fees would be subject to a full consultation process with the licensed trade and other relevant parties. Section 70 of the Act set out statutory advertising requirements in relation to vehicle and operator licences, which require that an advert must be published within a local newspaper and at least 28 days provided for comments to be made. It was proposed that this consultation period would begin during February 2023. The licensed taxi and private hire trade would be made aware of the consultation and how to feed in via email as well as through the quarterly Taxi and Private Hire Newsletter. Following the statutory consultation process, a further report would be presented to this Committee at the next meeting on 11th April 2023, setting out the results of the consultation and any amendments made to the proposed fees as a result.  If approved, the final proposed fees would take effect across the whole Council area on or before 12th May 2023.  Fees would be reviewed annually and further reports would be provided to the Licensing Committee following review.

Members were invited to ask questions of officers.  In response to a question regarding the potential to reduce salary overheads by £146K, the Committee was advised that the fees which were being proposed had taken into account this potential saving. A Member enquired as to why the fee for the licence of an executive vehicle was slightly less than that of a private hire vehicle when the work involved was similar. In response, officers advised that the fee for an executive vehicle was less because, unlike private hire vehicles, executive vehicles did not have door signs so there was not a need to recover the cost of this from the applicant.

Following a query regarding why the 2022/23 budget had not accurately taken account of the likely reduction in income due to the impact of multiple licence holders, officers advised that prior to the harmonisation of the taxi licensing service in September 2021, data was held in 3 different and separate legacy back-office systems. As a result, it had not been possible to match datasets in a meaningful way to assess the likely impact of multiple licence holders.  Furthermore, the budget for 2022/23 was set in advance of the harmonisation of the Service when the Service was still operating under the legacy district councils’ policies and legacy district councils’ fees and charges.

It was confirmed that fees would be reviewed annually to ensure that fees and charges were set at an appropriate level and that any adjustments required could be considered if necessary.

On a vote being taken, the recommendation was proposed by Cllr Green and seconded by Cllr Barnes and: -

RESOLVED that the proposed fees and charges set out at Appendix A of the report be agreed prior to consultation and statutory advertising.