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MPs urge Government to tackle out-of-area taxi licensing amid concerns over local accountability and public confidence
The Chair of the House of Commons Transport Committee has urged the Government to take action over widespread out-of-area taxi and private hire vehicle (PHV) working, warning of the consequences for local accountability and public confidence in the licensing system.
Ruth Cadbury MP made the comments following the Government’s formal response to the Committee’s report, 'Raising the standard: licensing of taxis and private hire vehicles', which examined regulatory inconsistencies, enforcement challenges and the future structure of licensing across England.
The Government has acknowledged concerns surrounding drivers obtaining licences from authorities outside the areas where they predominantly operate. Ministers have indicated that drivers should ordinarily be licensed by the authority covering the area where they intend to undertake most of their work.
However, the Government has not committed to introducing a legal requirement enforcing that principle, with further policy options expected to be considered as part of the proposed Taxis and Private Hire Vehicles Bill.
Responding to the Government’s position, Transport Committee Chair Ruth Cadbury MP said: “The Transport Committee looks forward to seeing the details of the government’s proposals to support the taxi and PHV sectors and the consumers who rely on it in everyday life.
“We particularly urge the government to pay heed to our conclusions about the problems large-scale out of area working can cause for local accountability and public confidence, and to come up with a plan to address these.”
The Committee’s response places renewed attention on the Government’s approach to cross-border licensing, an issue that has generated concerns among licensing authorities and sections of the taxi industry.
Under the existing system, drivers and vehicles can be licensed by one authority while undertaking substantial amounts of work in another area. This is particularly relevant to PHV operations, where cross-border bookings and the ability to work beyond the issuing council’s boundaries form part of the regulatory framework.
Critics of extensive out-of-area working argue that the arrangement can weaken local oversight because councils may have limited direct control over drivers licensed elsewhere, despite those vehicles operating regularly within their boundaries.
There are also concerns that differences in licensing fees, application processes and local requirements can encourage drivers to seek licences from authorities outside their principal working areas. For locally licensed taxi and PHV drivers, these differences can create commercial pressures where competing drivers operate under different licensing arrangements.
The Transport Committee has called for stronger incentives to ensure drivers obtain licences in the areas where they predominantly work, alongside measures improving regulatory consistency and enforcement.
The Government has identified national licensing standards as one way of reducing the differences between authorities that may encourage licence shopping.
Ministers are also considering changes to the geographical structure of licensing, including transferring responsibilities from district councils to larger local transport authorities.
Such a move could reduce the number of licensing bodies and potentially improve consistency across wider geographical areas. However, it would not necessarily resolve every issue associated with drivers operating beyond the boundaries of their licensing authority.
The Government has also proposed strengthening enforcement arrangements so that authorities can take action against drivers operating within their areas, regardless of where their licences were issued.
For licensing officers, the ability to intervene directly against out-of-area drivers could address some of the practical difficulties associated with relying on another council to investigate complaints or take regulatory action.
However, the Government has not yet confirmed the full extent of those powers or how the additional enforcement responsibilities would be funded.
Ministers have also expressed concerns that overly restrictive rules governing cross-border working could reduce vehicle availability, particularly where journeys routinely cross local authority boundaries.
The challenge for policymakers will be distinguishing between legitimate cross-border journeys and drivers who obtain licences from one authority while routinely working elsewhere. That distinction could become central to any future legislative proposals aimed at addressing the Committee’s concerns.
Cadbury’s comments suggest that MPs will be looking for more than national minimum standards alone, with a particular emphasis on ensuring licensing arrangements maintain meaningful local accountability.
The Government intends to bring forward a draft Taxis and Private Hire Vehicles Bill for pre-legislative scrutiny, providing an opportunity for the Transport Committee and other parliamentary stakeholders to examine the proposed measures before legislation is introduced.
Further consultations on national licensing standards and the structure of licensing authorities are also expected to shape the Government’s approach.
The Transport Committee’s latest statement reinforces its expectation that the Government will produce a detailed response to the problems associated with large-scale out-of-area working, rather than relying solely on broader regulatory reforms.
