6 minute read
News Analysis
Falling through the loopholes
Who are the drivers who can’t get local authority Covid-19 support?
The deregulation act of 2017 made taxi and private hire licensing into a competitive market – and drivers took advantage in their thousands.
But now, all those drivers who got licensed in Wolverhampton and other lowcost areas are finding they are missing out on much-needed coronavirus support schemes.
The government devolved responsibility for Covid-19 support to local authorities. This has created a “postcode lottery” of grants, with massive variations from council to council.
But many drivers are missing out completely as a result of council rules that only offer payments to those who live in the same local authority area in which they are licensed.
As a result, many thousands of drivers who took advantage of cheaper licensing through councils such as Wolverhampton, despite neither living nor operating in their chosen licensing authority area, are finding they are not eligible for handouts.
Wolverhampton has in fact been one of the most generous in terms of grants. Taxi and private hire drivers who have been significantly impacted by the Covid-19 pandemic can apply for a £2,000 grant via the Additional Restriction Grant – Taxi and Private Hire Grant scheme.
But the one-off payment of £2,000 will not be available to drivers from other towns and cities who have taken advantage of Wolverhampton’s low licensing rates and operate Wolverhampton-licensed cars elsewhere. To qualify, drivers must have lived in Wolverhampton for the past 13 weeks and must have notified Licensing Services of their current address. They must also present a driving licence showing a Wolverhampton address.
There is a good reason for Wolverhampton doing this. According to DfT figures, there were 18,110 licensed taxi and private hire drivers registered in the city at the start of the pandemic in March 2020, far more than in the much bigger neighbouring city of Birmingham, which had only 6,340 licensed drivers. But fewer than 4,000 of Wolverhampton-licensed drivers actually live in the city.
This means Wolverhampton would be facing a bill of more than £36 million if every driver it licensed was able to claim the £2,000 grant. So while the council was happy to take the drivers’ money for their licenses, it has found a loophole to avoid the bailout.
However, the numbers simply don’t add up for the council. Wolverhampton raised an estimated £3.7m in licence fees in 2019, and a total of £8.7m between 2017 and 2019, as it issued licenses to drivers from as far away as Truro in the south-west and Perth in Scotland, as it is allowed to do under the terms of the Deregulation Act.
In 2019 a total of 11,461 applications to Wolverhampton Council came from drivers based in Birmingham, while there were 2,457 from Manchester, 1,926 from Coventry, 1,279 from Leicester, 1,102
from Nottingham and 432 from Telford, according to a Freedom of Information request by the BBC.
But the £3.7m of revenue would barely cover a tenth of the amount it would have to pay out if it had to bail out all the drivers it licensed.
Drivers should apply to the local authority where they live, says Wolverhampton council. But most authorities are only bailing out drivers who actually live in their areas, so thousands of drivers are missing out.
Inevitably, unions are unhappy with the situation. Shafaq Ahmed of the App Drivers and Couriers Union is one of those who has missed out. “If you take the money from your drivers for their licences you are responsible to support them,” Ahmed said.
Ahmed is an Uber driver licensed in Wolverhampton, but living in Birmingham. Thus, he was refused the £2,000 Additional Restrictions Grant scheme by both Wolverhampton and Birmingham City Councils as both are only supporting those drivers who are both local residents and licensed in the city.
The grant also stipulates that drivers must also confirm they are self-employed and do not receive a salary from an employer through the PAYE scheme, and must have held a taxi license since November 4, 2020.
Cllr Stephen Simkins, cabinet member for city economy, said: “Trade for Wolverhampton taxi drivers, like many other businesses, has been significantly impacted by the current lockdown and this new grant will provide a lifeline to them.”
He added: “Working within the Government guidelines, we will ensure these grants get allocated as swiftly as possible as our city looks to recover from the financial impact of Covid-19.”
Other councils have also announced multi-million pound support packages to help struggling taxi and private hire drivers, though the amounts on offer vary dramatically.
Leeds Council has made £2.5m available to fund free three-year taxi and private hire license renewals for drivers, while drivers and operators with a Leeds business address will also be able to apply for £500 grants following the reopening of a coronavirus support scheme for businesses with low fixed property costs.
Schemes being put in place by the council mean more than £7.5m worth of support is on offer to taxi and private hire drivers and operators, whose business has been significantly hit by Covid-19.
Cllr James Lewis, leader of Leeds City Council, said: “The pandemic has had a major impact on people working in many different sectors across Leeds, with taxi and private hire drivers among those most seriously affected. In addition, many people, especially those with mobility needs or a disability, rely on taxis and private hire vehicles to get around. Supporting drivers means we are supporting those people as well.”
The free three-year license renewals will be worth £450 to most taxi and private hire drivers who need to renew their Leeds license between March 1, 2021 and March 31, 2022. They must also meet the council’s current licensing standards.
Grants are also on offer to taxi and private hire vehicle owners who have switched to low-emissions vehicles. Owners who bought an eligible vehicle on or after February 28, 2020 can apply for a transitional grant worth £2,100.
The £1.9million funding for the transitional grants has been retained by the council after originally being secured as part of Leeds’ Clean Air Zone (CAZ) scheme, even though it was decided last October that improvements in air quality and a rise in the number of cleaner vehicles meant the CAZ scheme would not go ahead.
Taxi and private hire vehicle owners who switched to low emission vehicles on or before February 28, 2020 will also be offered free three-year license renewals.
Across the Pennines in Bolton, local taxi and private hire licence holders will each receive a £700 Covid-19 support grant to meet a range of vehicle-associated costs.
A spokesperson for Bolton Council said: “We would like to thank the taxi trade representatives for supporting the council in developing this financial package over the past few weeks. We know this will be very welcome and thank them for their commitment to assist the council to deliver the support over the coming months ahead.”
The move has been welcomed by Bolton drivers. Charlie Oakes of the Hackney Drivers Association, said: “The trade is going through hard times, we thank the council and staff for all their hard work and being upfront with us, the money will help.”
Yasif Khan of the Bolton Private Hire Association added: “We would like to thank the councillors and the licensing officers for the help they have given through this pandemic.”
With many councils now offering some support, it’s vital to contact local authorities or visit council websites to find out how to apply. Most of the grants are designed to cover costs such as licensing charges, rather than being direct payments, which could conflict with other central support schemes.
But for drivers who don’t live and operate in the same area, it may be a case of making an individual plea to either – or both – councils involved in order to make a successful claim. And with councils strapped for cash, it’s highly unlikely the response will be a generous one.
