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THE DEEP DIVE: Government reveals response to huge taxi licensing reform plans covering CCTV, English tests, driver databases and out-of-area working
The Government has revealed plans to examine new measures discouraging out-of-area taxi and private hire working, alongside national licensing standards, stronger enforcement powers and a national driver database.
The Government has stated that taxi and private hire vehicle (PHV) drivers should ordinarily be licensed in the area where they carry out most of their work, as ministers prepare legislation that could significantly change how the industry is regulated across England.
In its formal response to the House of Commons Transport Committee’s inquiry, Raising the standard: licensing of taxis and private hire vehicles, published on 20 October 2026, the Department for Transport (DfT) confirmed that it will examine policy options designed to discourage drivers from obtaining licences outside their principal operating areas.
The response addresses 19 recommendations covering cross-border working, national minimum standards, licensing authority powers, passenger safeguarding, driver competence, wheelchair accessibility and the development of a national licensing database.
The Government said: “The Government believes drivers should ordinarily be licensed by the authority in the area where they intend to undertake the majority of their work.”
It added that it would consider policy approaches to discourage out-of-area working during pre-legislative scrutiny of its proposed Taxis and Private Hire Vehicles Bill.
The position represents an important development for licensing authorities and taxi operators concerned about drivers obtaining licences from councils with different application requirements, fees and processing times before operating predominantly elsewhere.
However, the Government has stopped short of committing to a statutory requirement for drivers to be licensed where they work most frequently.
Ministers have also warned that restrictions on cross-border journeys could reduce vehicle availability, increase passenger waiting times and affect access to transport.
The proposed reforms will be informed by the Law Commission’s 2014 draft legislation and the recommendations of the Taxi and Private Hire Vehicle Licensing Task and Finish Group, which took differing positions on the extent to which cross-border working should be restricted.
Out-of-area working and licence shopping
The Transport Committee called for a clear Government plan to curtail extensive out-of-area working and create stronger incentives for drivers to obtain licences in the areas where they operate.
In response, ministers acknowledged that the current regulatory structure creates inconsistencies between licensing authorities, potentially encouraging drivers and operators to choose councils offering less demanding requirements or lower costs.
The Government said it shared concerns about the scale of out-of-area working and its implications for regulatory consistency, enforcement and passenger safety.
It identified the introduction of national standards and the possible transfer of licensing responsibilities to local transport authorities as two approaches that could reduce incentives for licence shopping.
The Government nevertheless emphasised that passengers regularly travel across administrative boundaries and that taxis and PHVs provide essential connections in rural communities and areas with limited public transport.
Ministers warned that measures significantly restricting cross-border journeys could reduce available vehicles in certain locations and increase waiting times.
This creates a distinction between discouraging drivers from licensing outside their main working areas and restricting their ability to undertake legitimate journeys crossing licensing boundaries.
The Government has not yet confirmed how it would distinguish between occasional cross-border journeys and sustained operations predominantly outside the issuing authority’s area.
For operators with vehicles working across multiple council boundaries, that distinction could become an important element of the proposed legislation.
National licensing standards to tackle inconsistencies
Ministers have confirmed that national licensing standards will form a central part of the reform programme, following the English Devolution and Community Empowerment Act receiving Royal Assent on 29 April 2026.
The legislation provides powers for the Secretary of State to introduce national taxi and PHV standards, with the Government intending to consult on their detailed requirements.
The Transport Committee warned against national minimum standards becoming a lowest-common-denominator approach that would allow substantial differences between authorities to remain.
In response, the Government committed to developing requirements covering safety, driver training and accessibility, while limiting local variation where consistent national rules are considered essential.
Core safety and safeguarding requirements are expected to be established nationally, although ministers have left open the possibility of local flexibility in other areas.
That approach could have consequences for licensing authorities currently operating more demanding requirements than neighbouring councils. The Government has not published the detailed national standards or confirmed which existing local requirements might be retained, replaced or amended.
It has, however, explicitly linked future decisions about local flexibility to potential measures encouraging drivers to obtain licences where they undertake most of their work.
This suggests that the relationship between national consistency and local licensing accountability will be considered together as the reforms develop.
Greater enforcement powers for councils dealing with out-of-area drivers
The Government has also confirmed its intention to strengthen enforcement powers so that licensing authorities can take action against drivers operating within their boundaries, regardless of which council issued their licences.
Under the existing framework, enforcement responsibilities have largely remained with the issuing authority, creating difficulties when drivers operate considerable distances from their licensing council.
The Government said new powers introduced through the English Devolution and Community Empowerment Act will enable authorities to immediately suspend licences in the interests of public safety, irrespective of where the driver was originally licensed.
Guidance will be developed to support the consistent application of those powers.
Further measures are expected to be examined through the draft Taxis and Private Hire Vehicles Bill, including wider enforcement responsibilities and arrangements for information sharing between authorities.
The Committee also recommended allowing councils to recover the costs of enforcement against out-of-area drivers from the authorities that issued their licences.
Although ministers acknowledged the financial pressures created by the current arrangements, they did not commit to introducing that specific cost-recovery mechanism.
Instead, the Government said it would consider how enforcement responsibilities could be better aligned with funding, taking account of administrative complexity and fairness between authorities.
The issue has particular relevance for councils experiencing high levels of out-of-area working but receiving no corresponding licensing fee income from those drivers.
National driver database targeted for development
Work is progressing on a national licensing database intended to give authorities access to information about taxi and PHV drivers, their licensing histories and previous regulatory decisions.
The proposed system would allow licensing officers to establish whether an individual holds a valid licence, identify the responsible authority and access information about previous refusals, suspensions and revocations.
The Government said the database would help reduce the risk of unsuitable individuals obtaining licences from different councils following adverse licensing decisions.
However, a detailed delivery timetable has not yet been established.
Ministers expect the initial discovery phase to begin in autumn 2026 and finish by spring 2027.
The Government has also acknowledged that the effectiveness of the database will depend on authorities recording information consistently and updating records promptly.
The proposed legislation is expected to examine mandatory reporting requirements and timescales for submitting information.
Alongside the database, the Government will continue discussions with the Home Office about improving information sharing between police forces and licensing authorities.
The Transport Committee specifically called for statutory duties requiring relevant safeguarding information to be shared within consistent timescales.
The Government has not committed to introducing that particular statutory obligation, although it recognises the risks associated with inconsistent information sharing.
Mandatory CCTV consultation expected before end of 2026
The Government has confirmed that mandatory in-vehicle CCTV will be considered in its forthcoming national licensing standards consultation, which it intends to publish before the end of 2026.
The Transport Committee recommended consulting within 12 months on whether CCTV should become a national requirement, subject to evidence demonstrating its effectiveness.
Ministers have accepted that CCTV warrants consideration but have not decided whether cameras should become compulsory.
The consultation will examine safeguarding benefits alongside privacy, data protection and footage storage requirements.
The Information Commissioner’s Office and industry representatives will be involved in discussions.
Any eventual national requirement could affect vehicle equipment costs, data management responsibilities and existing licensing conditions, particularly where councils already mandate CCTV.
Safeguarding, DBS checks and driver suitability
The Government has confirmed that safeguarding training will be included within its proposed national standards.
The Committee called for consistent training requirements and clearer rules governing how frequently Disclosure and Barring Service certificates should be rechecked.
Ministers support stronger national safeguarding arrangements and intend to consult on training requirements.
The response also acknowledges the importance of enhanced DBS checks, including barred-list checks, when assessing whether applicants are suitable to hold licences.
However, it does not specify a national DBS rechecking interval or commit to the Committee’s requested review of the effects of DBS filtering changes.
Separately, the Government has agreed that national licensing standards should be explicitly linked to the assessment of whether an applicant is a fit and proper person.
Relevant statutory guidance will be reviewed to support greater consistency in licensing decisions.
For drivers and licensing authorities, these proposals could result in more uniform expectations concerning training, suitability assessments and ongoing compliance.
Government declines to commit to national licensing processing deadlines
One recommendation that has not been accepted outright concerns licensing application and renewal times.
The Transport Committee called for national processing benchmarks covering new applications, renewals and variations, with councils required to publish performance against those targets.
The Government acknowledged that licensing delays affect drivers’ livelihoods and the availability of services.
However, ministers raised concerns that fixed national deadlines could place pressure on licensing authorities to process applications more quickly at the expense of safeguarding.
They also noted differences in staffing, application volumes and reliance on external processes, including medical assessments and DBS checks.
The Government confirmed that existing legislative powers would not allow it to require councils to meet or report against national processing benchmarks.
It will consider whether additional measures are necessary in future legislation.
Instead, ministers currently favour sharing effective licensing practices, including streamlined renewals for compliant drivers and operators.
The Committee had separately raised Transport for London’s experience of licensing backlogs as evidence that moving licensing responsibilities to larger authorities would not automatically improve performance.
The Government has committed to working with TfL and other licensing bodies to identify lessons concerning staffing, operational systems and application handling.
English language and local knowledge requirements under review
Driver competence will form another part of the national standards consultation.
The Government has confirmed that it will consider English language proficiency requirements, alongside wider expectations for drivers to communicate effectively and operate safely.
The Committee recommended proportionate national requirements covering spoken English and knowledge of operating areas.
Ministers said the development of language standards would take account of established proficiency benchmarks and requirements applying to other transport sectors, including bus and coach operations.
The Government also warned against creating unnecessary barriers to entering the industry.
The response does not confirm whether a national English language examination will be introduced, what proficiency level would be required or how local knowledge assessments would operate.
Those details remain subject to further consultation and policy development.
Wheelchair-accessible taxi targets face Government reservations
The Government has declined to commit to the Transport Committee’s proposal for a single national minimum proportion of wheelchair-accessible vehicles (WAVs) within licensed fleets.
The Committee wanted a national plan requiring each licensing authority to demonstrate progress towards a consistent minimum WAV fleet requirement.
It also called for operators to publish information about their wheelchair-accessible vehicle provision and for additional funding to help drivers purchase, adapt and maintain suitable vehicles.
Ministers acknowledged the need to improve accessible transport but questioned whether a fixed national fleet percentage would deliver reliable services.
The Government cited differences in local demand, the importance of mixed fleets and the financial and operational difficulties associated with providing wheelchair-accessible vehicles.
It also noted that many PHV drivers are self-employed and own their vehicles, making compulsory fleet requirements potentially difficult to implement.
Availability at particular times of day, including peak periods and school transport hours, was identified as another challenge.
The Government will continue exploring ways to increase WAV provision but has not committed to a national quota or dedicated funding programme.
It acknowledged that higher purchase, conversion and maintenance costs can discourage drivers from adopting wheelchair-accessible vehicles.
Disability awareness training and passenger booking options
The Government has accepted the need to include disability equality awareness training within national licensing standards. The forthcoming consultation will examine training requirements and appropriate refresher arrangements.
The Transport Committee also recommended ensuring passengers could access services through digital and non-digital booking channels. Ministers have agreed to explore whether national standards should include requirements covering different booking methods.
Such provisions could affect app-based operators and other businesses that rely heavily on digital booking systems, although the Government has not confirmed any mandatory telephone or alternative booking requirements.
The Government said it would consult licensing authorities, operators, passenger organisations and disability representatives before deciding how any such obligations should operate.
National complaints portal remains under consideration
The Transport Committee proposed a single national complaints and incident reporting portal for taxi and private hire services.
The suggested system would direct reports to the responsible licensing authority and establish consistent expectations for acknowledgement, progress updates and resolution.
The Government supports a more consistent approach but has not committed to establishing a national portal. Ministers suggested complaints should initially be handled by the relevant operator or licensing authority, with a possible national system providing an escalation route where issues remain unresolved or involve wider safeguarding concerns.
The proposal will be examined during pre-legislative scrutiny.
Government to consider national licensing model alongside regional authorities
A further decision concerns which organisations should be responsible for licensing drivers, vehicles and operators. The Government’s consultation on transferring licensing responsibilities to local transport authorities closed on 1 April 2026.
The proposal would reduce the number of licensing authorities in England from 263 to approximately 70, according to the DfT’s January consultation announcement. The Government intends to publish its full consultation response by the end of 2026.
It has agreed to examine different licensing structures, including local transport authority arrangements and alternatives offering greater national consistency.
The assessment will consider how each model could improve standards, align enforcement responsibilities and discourage extensive out-of-area working.
The Committee had specifically requested comparison with a potential national licensing model.
This means the final structure has not yet been determined, despite the Government’s earlier proposal to transfer responsibilities to larger regional bodies.
What happens next for taxi and private hire licensing?
The Government’s response establishes several milestones for the reform programme.
Consultations on national licensing standards, including CCTV, safeguarding and driver competence, are intended before the end of 2026.
A response to the consultation on transferring licensing responsibilities to local transport authorities is also expected by year-end.
Work on the national licensing database is expected to move through its discovery phase between autumn 2026 and spring 2027.
The draft Taxis and Private Hire Vehicles Bill is due to be published for pre-legislative scrutiny during the current parliamentary session, although a precise publication date has not been confirmed.
The legislation is expected to address the wider licensing framework, enforcement responsibilities and measures intended to discourage drivers from obtaining licences outside their principal operating areas.
The Government has retained the distinction between taxis and PHVs as part of its proposed legislative approach, rather than pursuing a single undifferentiated licensing category.
For drivers, operators and licensing authorities, the most significant outstanding questions concern how ministers will define principal operating areas, whether new restrictions will apply to cross-border working, which national standards will become mandatory and how additional enforcement activity will be funded.
The Government’s response provides a direction for reform but leaves many of those decisions to consultation and the drafting of legislation.
