Text Box: Appendix 2Section 3: zoning within one licensing authority

7.24 In around five per cent of LAs the licensing area is divided into two or more zones. These zones exist as a result of various local government reorganisations. If a new authority comprised part of two or more post­reorganisation districts then each of those constituent parts constituted a zone for the purposes of taxi licensing. The LA can overcome this by seeking Secretary of State approval for an extension resolution under the Local Government Act 1972 but the only action that an LA can take is to remove all zones or accept the situation as it is. LAs do not have the power to create zones or to merge individual zones - unless merging zones has the effect of removing all zones.

7.25      Since these zones are licensing districts in their own right, they increase the number of cross border problems and again restrict supply from better meeting demand. Some authorities have argued that the removal of zones would mean that drivers would concentrate on those, primarily urban, areas where they can make most profit to the detriment of the, primarily rural, areas where demand is lower. This argument, given an absence of quantity control, does not stand up. Demand in rural areas is unlikely to reduce because zones are removed and if taxis found it was profitable to serve a particular area with zoning, it will be profitable afterwards. If some taxis did migrate to urban areas then others would take their place.

 

7.26      Under current legislation LAs are permitted to remove all licensing zones with approval of the Secretary of State for Transport. This regulation is due to be amended by an RRO which will enable LAs to amalgamate licensing zones without seeking approval from the Secretary of State.135

7.27      We note the intention of the DfT to remove the legislative requirement for LAs to seek permission from the Secretary of State before amalgamating licensing zones. We think that LAs will bring greater clarity to the market if they remove zoning within their districts.

 

'135 Cabinet Office: Regulatory Reform. The Government's Action Plan 2002.

78 The regulation of licensed taxi    I November 2003

and PHV services in the UK