Who should licence taxi and private hire drivers? MPs inquiry questions whether bigger authorities will solve the industry’s biggest problem
- Perry Richardson
- Jun 10
- 5 min read
The Government’s plan to dramatically reduce the number of taxi and private hire licensing authorities in England has come under scrutiny from MPs, with the Transport Committee warning that bigger licensing regions alone may do little to tackle one of the industry’s most persistent problems: out-of-area working.
As part of its inquiry into taxi and private hire vehicle licensing, the Committee examined whether responsibility for licensing should remain with local councils, move to larger regional transport bodies, or even be replaced entirely by a national licensing system.
The report arrives at the conclusion that while reform may improve efficiency and consistency, it is unlikely to solve cross-border licensing issues without wider changes.
The findings come as the Department for Transport considers one of the most significant structural changes to taxi licensing in decades.
Transport Committee warns that moving licensing powers to larger regional authorities may not end licence shopping or out-of-area working
A fragmented system with 263 different authorities
England currently has 263 separate taxi and private hire licensing authorities. These include district councils, unitary authorities, metropolitan boroughs and Transport for London. Each authority has the power to set its own licensing conditions.
That means drivers and operators can face very different requirements depending on where they apply for a licence.
Variations can include vehicle age limits, emissions requirements, medical standards, English language assessments, local knowledge tests, CCTV policies and wheelchair accessible vehicle requirements.
The Committee heard repeatedly that such variation has contributed to licence shopping and increased complexity for both drivers and operators.
Earlier in the report, Bolt revealed it must navigate around 3,900 separate licensing requirements across the 50 local authority areas where it operates. The company described the UK as “the most complex” market it works in despite operating across 50 countries and 600 cities worldwide.
Government wants to cut licensing authorities from 263 to 70
In November 2025, the Government announced plans to consult on transferring licensing powers from local councils to larger local transport authorities.
The proposal would reduce the number of licensing authorities from 263 to around 70.
Ministers argue that larger authorities could improve consistency, create economies of scale and strengthen enforcement across wider transport networks.
According to the Department for Transport, the change could help “reduce the factors that induce people to license out of their usual working area”.
The consultation closed in April 2026, with the Government now considering responses.
The case for larger licensing authorities
Supporters of the proposal told MPs that larger licensing bodies could bring greater professionalism and consistency.
David Pattison, Chief Operating Officer at Wolverhampton Council, argued that regional-scale licensing could enable greater investment in technology, compliance systems and enforcement operations.
Eamon O’Hearn of the GMB Union suggested organisations operating at the scale of Greater Manchester or Transport for London should be large enough to run effective licensing systems.
Transport for London’s Helen Chapman also pointed to the capital as an example of a larger authority already delivering licensing at scale.
The logic is straightforward. Larger authorities could potentially pool resources, improve enforcement capacity and apply more consistent standards across wider geographical areas.
For ministers looking to modernise licensing, it presents an attractive middle ground between local control and a fully national system.
Critics say the problem simply moves
However, many witnesses argued that regional licensing would not solve the underlying issue.
Instead of drivers licensing outside a town or city, they warned that drivers could simply start licensing outside a region.
Leeds City Council was among the strongest critics. It argued that “border hopping” would merely become “region hopping”. If standards, fees or licensing processes varied significantly between regions, drivers could still seek out the most attractive licensing authority and continue operating elsewhere.
The Institute of Licensing reached a similar conclusion. Its President, James Button, told MPs that out-of-area working would continue regardless, only across larger licensing territories.
For critics, the proposal addresses administrative structure rather than the root causes of licence shopping.
Local knowledge versus regional oversight
The debate also reflects a wider question about how taxi and private hire services should be regulated.
Many within the trade remain strong supporters of local licensing because it provides closer links between drivers, operators, enforcement officers and local communities.
Mark Robinson of Vokes Taxis summed up that position succinctly when he told MPs: “Local licensing with local enforcement just makes sense to us.”
David Lawrie of the National Private Hire and Taxi Association similarly warned that regional systems must still recognise the significant differences between local areas.
The concern is that larger licensing bodies could become more remote from the communities they regulate, potentially weakening local accountability.
MPs raise prospect of a national licensing model
Perhaps the most significant aspect of the Committee’s findings is its willingness to consider options beyond the Government’s current proposals.
While not recommending a national licensing authority outright, MPs called for a formal comparison between regional licensing and a fully national model.
The Committee concluded: “We are not persuaded that a transfer of licensing responsibilities will, on its own, remove incentives to out-of-area working.”
It added that drivers would still be able to operate across boundaries even if those boundaries became larger.
As a result, MPs have recommended that the Department for Transport publish a comparative assessment examining both the local transport authority model and “a potential national licensing model”.
The assessment should determine which approach would do the most to reduce incentives for extensive out-of-area working.
A bigger debate about the future of regulation
The Committee’s analysis highlights a challenge ministers will face as licensing reform progresses.
For years, policymakers have focused on questions of standards, safeguarding and enforcement. Increasingly, however, the debate is shifting towards who should actually hold licensing powers in the first place.
The Government appears convinced that fewer, larger authorities can deliver a more modern and consistent system. Yet the Transport Committee’s findings suggest structural reform alone may not be enough.
If licence shopping remains possible and drivers continue to operate predominantly outside the areas that license them, the industry’s biggest concerns around accountability, enforcement and public confidence may remain unresolved.
The Committee’s recommendation for a full appraisal of licensing models therefore represents more than an administrative exercise. It raises a fundamental question that could shape the next generation of taxi regulation: should licensing remain local, become regional, or ultimately move to a single national system?
For an industry facing its biggest legislative overhaul in decades, the answer could prove just as important as the standards themselves.
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