Written evidence submitted by the Institute of Licensing (TPV0130)
About the IoL
The Institute of Licensing (IoL) is the professional body for licensing practitioners across the UK. Our areas of interest encompass all public regulatory licensing, and taxi / private hire licensing is a major area of licensing albeit with varying requirements across England, Wales, Scotland and Northern Ireland in addition to different provisions which apply in London. Our membership is broad, including local authorities, police, private practice and industry. Our interests concern all public regulatory licensing law and practice.
The IoL is submitting written evidence to the Transport Committee to support its view that reform of taxi and private hire licensing is necessary and to highlight areas of particular concern or where improvements will have the most benefit. The IoL’s interest is in achieving effective and proportionate licensing regimes which deliver the intended outcomes while minimising the burdens on regulators and industry.
This response has been compiled in consultation with the IoL’s Taxi Consultation Panel, a group of members from across the country including local authority, private practice and industry practitioners.
Summary of response
There are significant challenges with the current licensing regime for taxi and private hire licensing across England and Wales. Some of these challenges could (and should) be addressed through national standards covering licensing requirements, conditions and licensing processes. Cross border hiring and licence shopping would be positively impacted by national standards, and licensing authorities should be given power and resources to undertake compliance and enforcement work for any driver, vehicle or operator working in their local area.
There are constraints relating to the setting of licence fees, which exacerbate the cross-bordering issues currently causing significant concerns. Cross bordering is an extremely complex issue which the DfT have tried to address, but there is no simple legislative route. Providing a level playing field on fees, processing, and licence requirements is likely to be the best option in the absence of complete reform of the licensing regime.
The concerns highlighted in the Casey report come down to suitability of individual applicants and licence holders. A national standard for assessing the fitness and propriety for applicants and licence holders (drivers, operators and vehicles) could be based on the IoL’s non-statutory Suitability Guidance which was originally published in 2018 and subsequently reviewed in 2024.
We highlight in our response the work that is ongoing in Wales in relation to national standards and strongly recommend that government officials in England and Wales collaborate with a view to agreeing national standards across both countries. The Institute of Licensing would be keen to assist in this work and has previously approached the DfT, LGA, Welsh Government and WLGA with a view to establishing a working group to achieve this.
Call for Evidence Questions
In practice no. There are significant challenges with the current licensing regime for taxi and private hire licensing. National Standards are required across England and Wales to ensure the travelling public are safe and service expectations are the same wherever you travel.
Welsh local authorities have been working for a considerable amount of time now with Welsh Government officials to develop national standards for Wales, and the IoL would strongly recommend that this work is utilised as a draft for collaboration between government officials in Wales and England with a view to developing national standards across both countries.
The principal legislation governing taxi and private hire licensing across England and Wales[1] are the Town Police Clauses Act 1847 and the Local Government (Miscellaneous Provisions) Act 1976. A separate licensing regime applies in London, with different, separate but similar legislation. This legislation, despite being amended is significantly out of date, and the 1847 Act was passed at a time when hackney carriages services were provided via horse and carriage. Subsequent legislation and case law has amended licensing arrangements. The legislative provisions are:
In Scotland, taxi and private hire licensing is governed by the Civic Government (Scotland) Act 1982, and is administered by local authorities, while in Northern Ireland, the Department for Infrastructure (DfI) is the responsible body, with the Driver and Vehicle Agency (DVA), which is an executive agency of the DfI, administering the licensing regime.
Previous reviews of the existing laws governing taxi and private hire licensing have failed to impact, including the Law Commission review in 2011, which resulted in a set of proposals and a draft bill which was not taken forward. Subsequently in 2018 the Task and Finish Group chaired by Professor Mohammed Abdel-Haq published a set of recommendations which included the introduction of national standards. Again, this has not been taken forward, although the Government response published in February 2019 stated (emphasis added):
‘The Government accepts the three key measures recommended to achieve a safe service for passengers: ─ National Minimum Standards ─ National Enforcement Powers; and ─ A National Licensing Database’.
The main differences between taxis (hackney carriages) and private hire vehicles are:
Suitability of licence holders and applicants
The key message is that Baroness Casey’s report into child sexual exploitation clearly demonstrates the crucial role licensing authorities must play in safeguarding and has highlighted concerns around out of area working which have arisen through the current legislation not keeping pace with society, technology and the industry.
Licensing Authorities are required by law to satisfy themselves that an individual is a ‘fit and proper’ person before granting a licence (or allowing a licence to remain in force). The same test applies to private hire operator licences. Whilst there is no test of fitness and propriety for vehicle proprietors, licensing authorities have discretion over grant, and the DfT Guidance makes it clear that the character of the proprietor must be taken into account[2]. There are other requirements including the right to remain and work in the UK and tax conditionality checks.
The fit & proper test is assisted by the Statutory Standards published by the DfT in 2020 (Annex 10 – Assessment of previous convictions). Annex 10 closely mirrors the Institute of Licensing’s (IoL) Suitability Guidance published in April 2018.
The IoL’s Suitability Guidance was originally established in an attempt to provide guidance to local authorities when setting their own suitability policies. The IoL recognised at that time (2016), that there was wide inconsistency across local authorities, with some local authorities relying on an obsolete Home Office circular (DOT Circular 2/92; Home Office Circular 13/92). In addition, the notifiable occupations scheme had been replaced by Common Law Police Disclosure, placing more restrictions on the sharing of information by the police and exacerbating inconsistencies in relation to information disclosure. The IoL raised concerns about this with the Home Office initially in 2015 and subsequently through stakeholder meetings, but there are continued difficulties with information sharing even now, exacerbated by court decisions which have found in favour of perpetrators and to the detriment of the police, leading to additional caution when sharing information with licensing authorities. This should be addressed through legislative provision and government guidance to achieve a clear means of information sharing and protection for the relevant public bodies (police and licensing authorities).
An informal impact assessment undertaken by way of a survey by the IoL in November 2018 showed that 50% of respondents had either already reviewed their policy in light of the IoL’s Suitability Guidance or were planning to do so. 10% said they wouldn’t, and the rest either didn't know or didn't answer the question. Anecdotally, we believe that more followed between 2018 and certainly again after 2020 when the DfT’s Statutory Standards were published.
The IoL published a revised version of its suitability guidance in 2024. The revised version represented an extensive review, including significant changes to Chapter 2: Offenders, Offending, Re-offending and Risk of Harm - An overview (led by Professor of Criminality, James Treadwell). It included a thorough review of all categories of crime which resulted in some categories being expanded, some new categories being added and an extensive discussion and re-draft in relation to motoring convictions. The DfT were consulted and are aware of the revised version.
The DfT’s National Standards (which we hope might be reviewed to take account of the revised suitability guidance), should set the baseline when it comes to vetting the suitability of drivers, operators and vehicle proprietors. Applied properly, these standards should effectively prevent anyone with convictions for serious offences, or where intelligence and non-conviction information indicates that they are a potential danger, from being licensed.
In many cases, when an applicant or licensee falls outside the licensing authority’s own policy, decisions on suitability are referred by licensing authority officers, for determination by a subcommittee of the regulatory committee. These hearings are held in private, and the applicant is invited to address the committee and to argue their case as to why they are fit and proper to hold a licence, in the face of the information under consideration. While case law has shown beyond any doubt that the personal and private circumstances of the applicant or licence holder are not a valid consideration[3], anecdotally, we are confident that many of the departures from policies on suitability, are the result of subcommittee hearings, where elected councillors have been persuaded in relation to personal and private circumstances. There is an argument here that such decisions should be made by professional licensing officers rather than expecting elected councillors to make such judgments. This is a practice currently followed by some local authorities, but it is likely that a majority of councils currently rely on sub-committees for such decisions. Additionally, there are examples where decisions to refuse licences due to conviction or other information concerning suitability have been overturned on appeal by Magistrates.
It is also the case, that there is no official role for the police in the licensing of taxi and private hire drivers, operators and vehicle proprietors. Combined with significant barriers and inconsistencies relating to information sharing, this is a serious disadvantage. Licensing authorities must make their fit and proper assessments purely on the basis of the information available to them (DBS checks including any additional information provided by the police as part of the enhanced disclosure and local authority investigation reports or other intelligence if available) and the counter arguments presented by the applicant / licence holder, without the benefit of police input. We are informed by our members that additional information is rarely provided by the police on DBS checks and we have examples which demonstrate this including serious cases where relevant information has been withheld from the licensing authority due to concerns and restrictions on information sharing. These barriers affect information provided through the DBS checks, but also where information arises about individuals who are already licensed and is not shared with licensing authorities. This is a serious concern and an issue which the IoL strongly recommends is reviewed with a view to making legislative provision to allow relevant information to be shared with licensing authorities to enable them to assess whether a licence should be reviewed.
The appalling cases uncovered in Rotherham, Telford, Oxford and other areas concerning child sex exploitation, were the result of individuals working in gangs, and preying on vulnerable children. Suitability checks are the first line of defence against such individuals obtaining or retaining licences, although this is only effective where there is conviction or non-conviction information which can be taken into consideration.
Essentially, suitability standards are the one area where there is a national standard already in place in (through statutory guidance) which should mean greater consistency across England and Wales. It is not absolute and never will be given that each decision is a judgement call by the person or person(s) determining the application on its individual merits.
It is clearly also the case that the vast majority of drivers, vehicle proprietors and operators are decent, honest professional individuals who do an excellent job and provide an essential and invaluable service in local communities – it is in their interests as much as for the travelling public, that suitability assessments are conducted thoroughly and consistently across the country to protect the integrity of the profession.
Regulation and oversight of the licensing regime
Licensed taxis and private hire vehicles can operate pre-booked journeys across the country. The advances in technology, and the emergence of app-based booking systems, have contributed to a huge increase in vehicles operating outside of the area in which they are licensed.
There are clear incentives for ‘licence shopping’ (where a vehicle and driver is licensed by one area but works and probably always intended to work) in another area. These are explored below.
Fees and charges - Local authorities cannot use licence fees to raise revenue. Any surplus must be carried forward at the year end and the following year fees must be adjusted accordingly. It follows that those councils with higher licence numbers (hence more income) must lower its licence fees, making it more likely that application numbers will increase.
Training requirements - There are currently no national standards on training requirements, therefore this is an area of inconsistency. The DfT Statutory Standards for Taxis and Private Hire (2020) refers to areas of training and states:
‘All licensing authorities should provide safeguarding advice and guidance to the trade and should require taxi and private hire vehicle drivers to undertake safeguarding training. This is often produced in conjunction with the police and other agencies. These programmes have been developed to help drivers and operators’.
It is worth noting that some local authorities do not support online training options and require drivers to attend face to face training. There are excellent examples of county-wide collaborations between councils to adopt the same training standards and requirements across the county.
The Standards also state driver training should include County Lines awareness (how to spot exploitation and what to do about it). Variances across local authorities will include matters such as local knowledge tests, English language tests and additional training requirements as deemed appropriate by that local authority.
In addition to the Statutory Standards, the DfT’s Best Practice Guidance refers to disability awareness training, driver proficiency, English language proficiency and safeguarding training, but goes on to state that licensing authorities should not require vocational qualifications to be undertaken as part of the licensing process. The guidance states:(emphasis added)
‘Given the need for driver knowledge and awareness to evolve and the potential need for periodic assessment, licensing authorities should not require applicants for a licence to have obtained a vocational qualification. If drivers and private hire vehicle operators wish to go beyond what is required to obtain a licence as part of their development or business model they can obviously do so, but it should not be a licensing requirement.’
While there may be merit in preserving flexibility in relation to training, to allow developing matters to be considered and new training implemented, the lack of national standards for training leads to further inconsistency across the country and incentivises licence shopping. This should be addressed through national standards in relation to training.
Processing times (efficiency) - This will vary between local authorities. In some cases, due to lack of resources, councils have out-sourced the licensing function to a 3rd party – this may (or may not) be another licensing authority.
Business model – In some cases, the business model promotes licensing with a single authority to enable a business operation which spans across multiple areas. This enables the business to hold one operator’s licence for private hire operator purposes, and for vehicles working under that operator to be licensed by the same authority, regardless of their normal or intended area of operation. The caveat is that the bookings must still be made via the licensed operator.
Scrutiny and standards re suitability (or perceptions that one council is less stringent than another) - as outlined above, there are requirements on licensing authorities to conduct suitability checks before issuing licences and to take action where a licence holder is no longer ‘fit and proper’.
Reputation – applicants may choose to license with a particular authority simply because they have acquaintances or colleagues who have done so, or because they have been told by others that a particular council processes licences more quickly or with less scrutiny or training etc requirements than another, or the licence fees are lower.
Whatever the reason for licence shopping, it is undeniably difficult for licensing authorities to regulate or enforce against licence holders that are licensed by another council. In some cases, licensing authorities may have addressed this through mutual authorisation agreements and service agreements, but many haven’t and even where such agreements are in place there are still barriers. Licensing authorities have very limited (shrinking) resources, and with the current licensing system allowing fee setting only to achieve cost recovery, this cannot take into account regulating and enforcing licences issued by another council. In addition, vehicle standards will vary between licensing authorities, making compliance checks extremely difficult.
National standards for taxi and private hire vehicles (conditions, vehicle specifications, testing, livery and signage etc), drivers (training etc) and operators (conditions) would greatly assist in removing many of the incentives for licence shopping, although fees will remain inconsistent under the current arrangements.
Enabling cross border enforcement (where licensing officers can regulate and enforce any vehicle and/or driver operating in their area) would also address the current issues, but this requires funding to cover the costs of enforcement where licence fee income is collected by a different local authority. It is also important to recognise that an authorised officer of a local authority does not have any power to stop a licensed taxi (hackney carriage) or private hire vehicle, even those licensed by that officer’s authority. Such powers only lie with the police.
Measures to address cross bordering have been examined extensively in the past by the DfT. There is no easy option and no consensus on any best practical means. Any restrictions requiring licensed vehicles to return to their ‘home’ licensing area on completion of a journey (or indeed to start a journey from their licensed area) will present enormous difficulties for some businesses, particularly those undertaking long distance hirings (airport runs etc), or for those fulfilling multiple school contracts. It is appropriate to also consider the environmental impact of any such policy which would result in countless empty miles, entirely unnecessarily.
The IoL supports the need for reform.
Variations in standards of service, application criteria, application process and processing times is severely impacting the licensing regime. New legislation and national standards would address this and the public’s expectations.
Drivers are understandably frustrated with the current variations between different authority licensing requirements, and it is one of the incentives for licence shopping. National operators are equally frustrated at navigating different licence requirements in different areas.
The travelling public may be largely unaware of the variation between licensing authorities, but all have the right to expect to be driven in a safe vehicle, by a safe driver, having made the booking through a safe operator. This links back to suitability assessments mentioned previously. It should also be noted that booking for taxis (hackney carriages) are not made through licensed operators. Suitability checks are important for operators given that they are privy to personal information including home addresses and potentially periods when home owners are away on holiday etc. This may warrant further consideration and should be included in any discussions about potential reform of the licensing regime.
National standards for vehicles and driver conduct across England and Wales, would level the playing field, and remove the need for licensing authorities to compose and review their own policies for vehicles and drivers. The core purpose of the licensing system is to safeguard the travelling public, and this should be the aim of national standards.
Agreeing what those standards should be, will be extremely challenging, but it is also important to remember that national minimum standards rather than absolute national standards will still lead to inconsistency across local authorities.
Another area which should be considered, is home to school transport (H2ST). Many licensing authorities have a ‘restricted’ licence category where drivers can be licensed purely to undertake H2ST contract work. This enables the licensing authority to take a more relaxed approach on some of the licence requirements for fully licensed taxi and private hire drivers, which might for example mean that H2ST drivers are relieved from the requirement to undertake a local knowledge test or some other requirements are relaxed due to the nature of the work. These arrangements do not compromise safety requirements, fit and proper testing etc., and are purely to allow a more straightforward route to licensing for those concerned purely with H2ST.
Accessibility for disabled passengers, especially those using wheelchairs, remains a problem. The cost of a wheelchair accessible vehicle (WAV) is significantly higher than the cost of a saloon or estate car, leading to fewer WAV being used as taxi and private hire vehicles. Local authority requirements vary with some having implemented requirements that licensed taxis are wheelchair accessible, and some requiring any new or additional taxis to be wheelchair accessible.
Whilst Section 163 Equality Act 2010 would require all taxis to be wheelchair accessible, this has never been brought into force and there are concerns that implementing this requirement would have unintended consequences in significantly reducing the number of taxis within local licensing areas. If the provisions were to be brought into force, Section 164 (3) of the Equality Act provides for licensing authorities to apply for an exemption order where they are satisfied that the WAV requirements are inappropriate for the local authority area and that the WAV requirement would result in ‘an unacceptable reduction in the number of taxis in its area’.
There are no statutory provisions (even to be brought into force) imposing similar requirements for private hire vehicles.
In-vehicle CCTV is a huge deterrent to both drivers and passengers to engage in inappropriate or criminal behaviour. It safeguards everyone and as drivers can be as much at risk as passengers, this is a vital safety advance.
The requirement for CCTV in licensed vehicles varies across the county, with many facing objections due to installation costs, and in practice only a small number of local authorities currently mandate in-vehicle CCTV as a result. Anecdotally, the IoL believes that many support the concept but are concerned about the current issues of contention, including:
As it stands, the requirement for in-vehicle CCTV is another incentive for licensing shopping by individuals wishing to avoid the additional costs of CCTV systems. The inconsistencies currently in relation to the operation of systems in vehicles is confusing and unhelpful for all parties.
The law states that once licensed, a taxi or private hire vehicle is licensed for the duration of the vehicle licence (24 hours a day, 7 days a week) with no exceptions. As a result, it can only ever be driven by a licensed driver (with an exemption for taxis for testing), regardless of the use it is being put to (professional or private).
To address the current inconsistencies, legislative provision should be considered to mandate CCTV in all licensed taxi and private hire vehicles, with continual audio and visual recording, and requirements that data is encrypted with a data retention period requirement, and further requirements that data can only be accessed by the police or specified licensing authority officers following a complaint or alleged crime.
Level the playing field with national standards and make legislative provision to enable licensing officers to regulate and enforce all vehicles and drivers operating in their area, regardless of the licensing authority. This is an essential aspect of addressing cross-bordering and ensuring adequate compliance and regulatory oversight in local areas. However, this must be supported through resources for licensing authorities. Again, this will be a complex area, but simply providing enforcement powers will add burdens to licensing authorities, requiring them to commit significant resources to regulating vehicles and drivers working in their local area, where the licence fees have been paid to a different local authority. The ultimate result will be reduced costs to the issuing authority, leading to reduced licence fees in that area, while the enforcing / regulating authority faces increased costs with no option to increase licence fees as this will push more local licence holders to apply to alternative authorities.
Reform could achieve much, including:
Regional transport authorities will face the same challenges, just on a larger geographical scale. Moving the licensing function to regional transport authorities will put all transport within the same authority, but the local knowledge and accountability may be compromised as a result. Regional transport authorities will not in themselves prevent out of area working, as it merely transfers licensing from lower-tier to upper-tier authorities. Transferring taxi licensing from lower to upper-tier authorities will mean that upper-tier authorities have to recruit and train new teams, as well as develop licensing systems and processes, while lower-tier authorities see licensing teams (which currently deal with a number of different licensing regimes, such as alcohol and entertainment and gambling) lose economies of scale and experienced staff. This will also be happening at a time where many areas are going though Local Government Reorganisation meaning teams will be stretched and considerable upheaval and additional costs to the taxpayer, while resulting in a system that does not tackle out of area working!
This was subject of wide consultation in Wales in 2019 and both the industry and local authorities were opposed to this idea. (Improving Public Transport – Welsh Government White Paper) (2019) Joint Transport Authority
The issue again is around, localism, what works in one area doesn’t necessarily work in another, for example – Cardiff and Flintshire – there is no comparison in relation to road infrastructure to provision of services. What should be the same in every local authority area are the standards expected of drivers, vehicles and operators and the provision of services by each local authority.
Digital ride-hailing systems are being regulated by the same standards and rules as for personal operators and booking offices (they require a private hire operator licence in the same way and use licensed drivers and vehicles licensed by the same local authority).
Digital ride-hailing systems have in some (not all) cases resulted in significant safety improvements including cashless payments, the ability to track vehicles and passengers, and pre-journey information about the vehicle and driver being provided to passengers.
Cross bordering has always been an aspect of taxi and private hire operations, but the developments in technology through digital platforms has enabled this to happen on a national scale, and in the absence of national standards or national compliance and enforcement.
The ability of drivers to contract with multiple private hire operators allows them to potentially job-shop, prioritising a more lucrative booking over another booking, and leading to customers being let down. We believe that some local authorities have implemented cancellation policies to address this, and some operators have also taken steps to address booking fulfilment, but booking fulfilment remains a concern.
Digital ride-hailing platforms do not work well in rural areas where signal is poor or in areas where demand is led by cash customers. It is important that more traditional booking methods (telephone) along with cash and payment options remain available.
There will be pressure from industry to address this, but technological advances will continue, and licensing law and regulation should keep pace with the changing times.
Local authorities should have a complaints and incident reporting system, and any such reports should be dealt with promptly and taken extremely seriously. We are unable to comment on public perception of these systems. National standards should require operators to pass on details of complaints which meet or exceed specific criterion (driver suitability / safeguarding issues and vehicle safety issues).
The NR3S system is mandated across England and widely utilised in Wales (it is universally supported but not mandated in Wales. It provides the essential means of a local authority checking to see if an applicant has previously had an application refused, or a licence suspended or revoked. Once they are aware that another authority has made such a decision, a licensing authority should approach that authority to request further information which they can (and should) then consider when making their own decisions.
Some members have raised concerns regarding the limit on the record retention (currently 11 years), pointing out that some court decisions have included individuals being banned for life from being a taxi driver.
The biggest barrier to the NR3S system is likely to be the knowledge of individuals using the system. Used correctly, it is a valuable resource, providing essential flags to licensing authorities. It does not (or should not) in itself, influence decision making, but merely signposts licensing authorities to make further enquiries in order to inform local decision making. The requirements in relation to criteria for recording should be reviewed to simplify the process and additional training tools could be provided.
It is not currently clear what sanctions or implications there are for incomplete or incorrect data recording. In addition, this should be mandated across the whole of the UK.
The proposals for autonomous vehicles bypass almost entirely the licensing regime for taxis and private hire licensing. The consultation states:
‘For services that have been granted an APS permit, taxi, private hire vehicles (PHV) and public service vehicles (PSV) legislation will be disapplied. ‘The APS permitting scheme does not replace these existing licensing routes for passenger carrying vehicles, instead sitting alongside them as an additional route targeted specifically at self-driving vehicles.’
The proposals are that in England, the appropriate national authority would be the Secretary of State for Transport, while in Scotland or Wales, the power is with Scottish or Welsh Ministers. Permits can only be granted with consent by the relevant licensing authority, but consent is assumed if the licensing authority fails to respond within 6 weeks, or where the authority refuses to consent but fails to give written reasons for its refusal.
The Act is silent on what constitutes ‘reasons’ which will lead to further questions. Will licensing authorities be able to refuse with reasons that relate to the undermining of licensed taxi and private hire services, the likely loss of employment as a result of driverless taxis, or simply because they don’t like the idea?
Greater competition without fair and equitable regulation will create issues in every local authority area, and it is likely that local authorities will be subject to intense lobbying from local industry drivers and operators due to the impact on regulated taxis and private hire vehicles.
Technology will continue to advance, but the IoL hopes that there will always be a need for licensed vehicles, driven by professional, safe individuals who are able to provide a personal service within their local communities. Automated vehicles will not be able to provide assistance to disabled or vulnerable passengers, or to provide a friendly chat when driving elderly passengers to appointments or for shopping trips etc.
At its heart, the advent of autonomous vehicles is a direct threat to the taxi and private hire community, and in time will significantly impact on the demand for services and therefore employment. This is likely to be faster and more impactful initially in city and urban centres.
September 2025
Endnotes
[1] In Wales, taxi and private hire licensing is a devolved matter, and Welsh Government are committed to introducing new law, but as yet there is no indication of when any changes will take effect.
[2] “Statutory Taxi and Private Hire Vehicle Standards” Department for Transport 2022. Originally issued in July 2020, reissued in November 2022 with a revised Chapter 4.7, revised numbering, and no added emphasis throughout. A version in Welsh was also issued in November 2022. (available at https://www.gov.uk/government/publications/statutory-taxi-and-private-hire-vehicle-standards)
[3] See Leeds City Council v Hussain [2002] EWHC 1145 (Admin), [2003] RTR 13 Admin Crt and Cherwell DC v Anwar [2011] EWHC 2943 (Admin), [2012] RTR 15