UK Taxi Licensing: The 'Out-of-Area' Challenge

The intricate web of taxi and private hire vehicle licensing across the United Kingdom is facing unprecedented scrutiny, particularly concerning the contentious issue of ‘out-of-area’ operations. This practice, where vehicles and drivers are licensed by one local authority but predominantly operate in another, is creating significant challenges for councils, eroding local oversight, and raising serious questions about public safety and accountability. Greater Manchester, under the leadership of Metro Mayor Andy Burnham, has become a focal point in this debate, advocating for radical changes to a system increasingly described as broken, as nearly half of its private hire fleet now falls outside local control.

The current flexibility in licensing laws, while perhaps intended to streamline processes, has inadvertently severed the crucial link between taxi services and the communities they serve. This detachment means local authorities often have little to no enforcement power over vehicles licensed hundreds of miles away, even when they operate daily on their streets. The stark reality is that a taxi licensed 80 miles away in Wolverhampton might be operating freely in Bolton, with Bolton Council having 'no enforcement' capability. This geographical disconnect not only undermines local standards but also impacts the livelihoods of local drivers and the financial stability of local councils, who lose out on licensing fees and associated revenues.

The Unravelling Tapestry of Local Control: The ‘Out-of-Area’ Licensing Conundrum

At the heart of the current crisis is a loophole that allows private hire vehicle owners to obtain a licence from any local authority in England, regardless of where they intend to operate. This has led to a dramatic surge in 'out-of-area' vehicles, particularly in bustling urban centres like Greater Manchester. Figures reveal a startling trend: nearly half (49%) of private hire vehicles working in Greater Manchester are now licensed by authorities outside its ten constituent councils. This isn't a static problem; the number of out-of-area vehicles in the city-region has sharply risen from just under 7,000 in 2023 to more than 12,000 today. Nationally, the scale is equally concerning, with over 11 per cent of England’s private hire vehicles being licensed by a single local authority: City of Wolverhampton Council.

This phenomenon means that local councils, such as Bolton, find themselves in a precarious position. While their residents rely on these services daily, the local authority that should be responsible for ensuring safety, vehicle standards, and driver conduct has virtually no power. The phrase 'no enforcement' perfectly encapsulates the core of the problem. When a vehicle is licensed in a distant council, any issues, complaints, or enforcement actions become incredibly difficult, if not impossible, for the operating council to address effectively. This lack of direct accountability to local communities is a significant concern for both passengers and legitimate local taxi drivers.

A "Broken System": Erosion of Standards and Public Safety

The implications of this 'out-of-area' licensing model extend far beyond administrative inconvenience; they strike at the core of public safety and the integrity of the taxi industry. Andy Burnham has explicitly stated that the current system is "broken" because local leaders have "zero oversight over nearly half the private hire vehicles on our streets, with no relationship with the drivers, no levers to enforce the standards we want and no control over the numbers of taxis serving our communities."

Consider the potential ramifications:

• Public Safety: When local authorities cannot conduct swift investigations into incidents or collisions involving out-of-area taxis, it creates a significant gap in accountability. The crucial link between Greater Manchester Police and local licensing authorities, which would normally allow for quick and effective action, is severed. This delay or inability to investigate thoroughly can put passengers at risk and undermine public trust.
• Vehicle Standards: Different councils may have varying standards for vehicle inspections and maintenance. An out-of-area vehicle might meet the minimum requirements of its licensing authority but fall short of the higher standards expected by the community it primarily serves. Without local enforcement, ensuring consistent vehicle safety and emissions standards becomes a significant challenge.
• Driver Accountability: Local councils often have a deeper understanding of their communities and can apply local knowledge to driver vetting and conduct. When drivers are licensed elsewhere, their connection to the local community they serve is diminished, potentially impacting their adherence to local expectations and norms of behaviour.
• Economic Impact: Beyond safety, there's a tangible financial cost. Councils like Bolton lose potential licensing revenue that would otherwise be invested back into local services, including transport infrastructure or enforcement. This siphoning of funds away from the areas where taxis actually operate creates an unfair playing field for locally licensed drivers who contribute directly to their local economy.

The current system essentially creates a Wild West scenario where a significant portion of the taxi fleet operates without meaningful local oversight, compromising the very standards and safety measures designed to protect the public and support the industry.

Learning from the Bee Network: A Blueprint for Taxi Reform?

Andy Burnham and Greater Manchester leaders propose a solution inspired by their successful Bee Network for buses. In January, the Bee Network brought buses under local control, a move credited with driving up standards and increasing passenger numbers. The vision is to mirror this success for taxis, giving mayors and city-regions greater control over enforcing safety, vehicle standards, and accessibility conditions.

The Bee Network's success demonstrates that local control can lead to:

• Improved Standards: By allowing local authorities to set and enforce their own standards, quality of service can be significantly enhanced. This includes everything from vehicle cleanliness and emissions to driver training and conduct.
• Enhanced Public Confidence: When passengers know that their transport services are regulated and accountable to their local authorities, trust in the system increases. This encourages greater usage and supports the local economy.
• Strategic Planning: Local control enables integrated transport planning, where taxis are seen as a crucial component of a wider network, working seamlessly with buses, trams, and trains to provide comprehensive mobility solutions.

Applying this model to taxis would mean that local leaders would have the necessary "levers" to ensure that every taxi operating in their area meets the high standards expected across all public transport, regardless of where it originally obtained its licence.

‘Backing Our Taxis: Local. Licensed. Trusted.’ – The Campaign for Devolution

To address the systemic issues, Andy Burnham has launched a new campaign, ‘Backing our taxis: Local. Licensed. Trusted.’ The core demand is for the Government to devolve power over taxis to Mayoral Combined Authorities. This would require national legislative change, specifically through the English Devolution Bill.

The proposed changes are twofold:

1. Devolve Taxi Powers to City-Regions: This would grant mayors and combined authorities the authority to set and enforce their own licensing rules and standards, tailored to the specific needs and priorities of their areas.
2. Stop the Ability for Vehicles and Drivers Licensed in Non-GM Authorities to Operate Here: This is the crucial step to close the 'out-of-area' loophole. It would mean that a taxi primarily operating in Greater Manchester would need to be licensed by one of Greater Manchester's councils, ensuring direct local accountability.

Such changes would give political leaders more control over measures that directly impact public safety, vehicle standards, emissions, and accessibility. However, the campaign isn't solely about passengers; it's also about safeguarding the livelihoods of local taxi drivers. As Mr Burnham stated, "This is as much about making Greater Manchester the best place to be a taxi driver – and safeguarding the livelihoods of our cab drivers – as it is about passengers." The aim is to support drivers who have faced immense pressure in recent years, ensuring they can operate in a fair and well-regulated environment.

The campaign also calls on the government to support drivers in making the switch to greener, more accessible vehicles. Key recommendations include extending the VAT exemption to new wheelchair accessible taxis, extending the national Plug-In Taxi Grant for electric vehicles, and reducing the rate of VAT on public electric vehicle charging. These measures are vital for modernising the fleet and contributing to environmental goals.

Rebuilding Local Links: Greater Manchester's Licensing Review

In parallel with the national campaign, Greater Manchester has announced a comprehensive review of its current approach to taxi licensing. This will be supported by a 12-week period of engagement with the taxi trade, aiming to "get under the bonnet of the issues that affect them." The review seeks to understand how, even under the current system, drivers could be encouraged and incentivised to license within the city-region.

Discussions will cover practical aspects like:

• Process Efficiency: Streamlining the licensing application and renewal processes to make it less cumbersome for drivers.
• Standards: Reviewing existing standards to ensure they are robust yet fair, balancing public safety with driver practicality.
• Financial Incentives: Exploring ways to make local licensing more financially attractive, potentially through reduced fees or other benefits.
• Licence Conditions: Examining conditions such as requirements for vehicles to be serviced at specific garages, ensuring local quality control.

This commitment to in-depth discussion reflects a recognition that effective change requires collaboration with the very people who drive the industry. As Cllr Eamonn O'Brien, Leader of Bury Council, highlighted, "The importance of taxi and private hire vehicles cannot be underestimated in keeping people across Greater Manchester moving day in, day out." The goal is to find the best ways to ensure all journeys are safe and reliable for passengers, while also providing the right support for drivers.

Paving the Way for a Greener Fleet: Supporting Drivers in Transition

A significant aspect of Greater Manchester's strategy is to support taxi and private hire drivers in transitioning to cleaner, more modern vehicles. This aligns with the region's broader investment-led Clean Air Plan, which aims to improve air quality and cut emissions without the need for a charging zone.

Key initiatives include:

• Funding for Hackney Carriages: An £8 million fund has been allocated for drivers of Hackneys (black cabs) as part of the Clean Air Plan deal. This funding is crucial for helping them upgrade to cleaner vehicles.
• Support for Private Hire Vehicles: Greater Manchester will also explore how private hire vehicles can be supported in making the switch, potentially through subsidised, low-interest loans.
• Extended Compliance Dates: Recognising the pressures faced by drivers, leaders of Greater Manchester’s ten local authorities have endorsed proposals to give drivers more time to upgrade their vehicles, extending the emission compliance date from the end of 2025 to at least 31 December 2026. This also includes an exemption for vehicles until their maximum age limit, as part of existing licence agreements.

These measures demonstrate a pragmatic approach to environmental goals, combining strict standards with practical support to ensure a smooth and fair transition for drivers, ultimately leading to a cleaner, greener city-region.

The Path Forward: Collaborative Efforts for a Safer Future

The issue of 'out-of-area' taxi licensing is a complex one, deeply impacting local governance, public safety, and the economic viability of local taxi services. The situation in Greater Manchester, with nearly half of its private hire fleet licensed elsewhere, serves as a powerful illustration of a national problem that demands urgent attention.

Andy Burnham's campaign, 'Backing our taxis: Local. Licensed. Trusted.', offers a clear pathway forward: national legislative change to devolve powers to city-regions, coupled with robust local reviews and incentives to encourage drivers to license where they operate. The success of the Bee Network for buses provides a compelling precedent for how local control can elevate standards and build public trust.

Ultimately, a collaborative effort between national government, local authorities, and the taxi trade is essential. By working together, the UK can move towards a taxi licensing system that is not only fair and efficient but also guarantees the highest standards of safety and reliability for passengers, while simultaneously safeguarding the livelihoods of dedicated taxi drivers across the country.

Frequently Asked Questions (FAQs)

What is 'out-of-area' taxi licensing?
This refers to a practice where a taxi or private hire vehicle driver obtains their licence from one local authority, but primarily operates and picks up passengers in the area of a different local authority, often many miles away from where they are licensed.

Why is 'out-of-area' licensing a problem?
It creates a lack of local accountability and enforcement. Councils in the operating area have little to no oversight over these vehicles, making it difficult to enforce local standards for safety, vehicle condition, and driver conduct. It also leads to a loss of revenue for the operating councils and can disadvantage locally licensed drivers.

What is the Bee Network and how is it relevant to taxis?
The Bee Network is Greater Manchester's integrated public transport system, which brought buses under local control. Its success in improving standards and passenger numbers is seen as a blueprint for how greater local control over taxis could lead to similar improvements in safety, vehicle standards, and accessibility.

What is the ‘Backing Our Taxis: Local. Licensed. Trusted.’ campaign about?
It's a campaign led by Andy Burnham and Greater Manchester leaders calling for national legislative changes to devolve taxi licensing powers to Mayoral Combined Authorities. The aim is to give local leaders more control to enforce standards, improve public safety, and ensure taxis are licensed where they operate.

How will these proposed changes benefit taxi drivers?
The campaign also aims to make Greater Manchester (and similar city-regions) the best place to be a taxi driver. By bringing licensing under local control and encouraging local registration, it seeks to create a fairer playing field, provide better support, and offer incentives for drivers, including financial aid for transitioning to greener vehicles and extended compliance dates for emissions.

What about electric taxis and air quality?
The campaign includes calls for government support for drivers to switch to greener, more accessible vehicles. This involves extending VAT exemptions for wheelchair-accessible taxis, extending the national Plug-In Taxi Grant, and reducing VAT on public EV charging. Greater Manchester also has an £8 million fund for Hackney carriages as part of its Clean Air Plan, with plans to support private hire vehicles in transitioning to cleaner models.

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