DfT could end out-of-area licensing in wake of grooming gangs report

Home Secretary Yvette Cooper has announced that the Government is planning to tighten up taxi licensing – which could cause chaos for the private hire sector.

The plans could include an end to the current ability under the Deregulation Act of 2017 for rivers to register with another council outside their area. And it could force a return to the wasteful and inefficient practice of forcing drivers and operators only to accept jobs that start or finish in their “home” licensing area – the so-called “ABBA principle”.

The Government is planning to make changes in response to Baroness Casey’s recent national audit on group-based child sexual exploitation and abuse. The report has led to Prime Minister Kier Starmer’s decision to hold a national inquiry into the issue.

The report included a recommendation that “The Department for Transport should take immediate action to put a stop to ‘out of area taxis’ and bring in more rigorous statutory standards for local authority licensing and regulation of private hire drivers.”

Baroness Casey wrote: “The Department for Transport should close this loophole immediately and introduce more rigorous standards” as part of a national effort to reduce risk to children and improve the integrity of taxi services involved in school and care-related transport. However, most drivers only resort to licensing in other areas as a result of inefficiency and backlogs in their own areas. Drivers in Greater Manchester face delays of up to 10 months to get licenses, and as a result, hundreds of drivers apply for a license in Wolverhampton, which can be issued in a matter of days.

The taxi and private hire industry has instead called for national licensing standards, which would remove the issue of out-of-area licensing as it would require all councils to operate to the same standards – including safeguarding, so no licensing area could operate with lower standards.

Andrew Pakes MP (Labour, Peterborough), raised concerns in the Commons about this issue and called for action to establish uniform national standards.

But in response, the Home Secretary said the Department for Transport is examining the issue with a view to reforming the law. In response to Pakes, she said: “Many local authorities across the country have worked to ensure that they raise standards and checks in their licensing arrangements, particularly those in areas where there have been serious problems and criminal cases.”

“However, those checks and safeguards can end up being undermined by the licensing of taxis in other areas that do not have such checks, so we are looking to take forward reforms to the law. The Transport Secretary is looking at exactly this issue to make sure that we find a way to close the loophole.” No specific timelines or draft legislation have been announced.

A Freedom of Information request earlier this year, revealed that 96% of Wolverhampton taxi and private hire drivers licensed in the last year live outside the council area.

Greater Manchester Mayor Andy Burnham has pointed out that more than 11% of England’s private hire vehicles are licensed by Wolverhampton Council.

In April, he said: “The taxi licensing system is demonstrably a broken system. In our city region, we are on the verge of not licensing the majority of our taxis. We’re just about hanging on. But if the growth [in out-of-area] licenses continues, we will no longer licence the majority of our taxis.”

However, City of Wolverhampton Council defended its policies and denied that it operated to lower standards than other cities. In a statement, the council said: “Under the current law, applicants are able to apply to any licensing authority for taxi licenses and the council may not refuse an applicant simply because they live in a different area. It is illegal for licensing authorities to impose a limit on the number of private hire licences it issues.”

“Applicants are usually local to the area they drive in, but many choose to be licensed in Wolverhampton due to our efficient, yet rigorous, licensing process. Our early adoption of digital technology has allowed us to offer a simple and efficient online application procedure, with the requirement that drivers attend in person for training and strict assessment before an application can be processed.”

“In addition, City of Wolverhampton Council is the only authority which carries out daily checks of drivers’ DBS status. The council does not gain financially, as the fees for taxi licensing are legally ringfenced for spend only on related activities. Where our income generates a surplus, due to economies of scale, we return the money to the trade by reducing our fees.”

The council concluded: “Public safety is of paramount importance to us. Drivers are regulated by Wolverhampton and can legally work anywhere in the country. We take enforcement seriously and our officers are out across the country, every Friday and Saturday night, working to protect the public.”