Birmingham City Council (18 004 635)

Category : Environment and regulation > Licensing

Decision : Not upheld

Decision date : 15 Jan 2019

The Ombudsman's final decision:

Summary: Mr Y is licensed to drive a hackney carriage taxi. He complains the Council has issued a temporary renewal for the licence of a rival taxi firm, despite them not being fit and proper to operate. The Ombudsman finds no evidence of fault in the procedure followed by the Council when considering the renewal application. In any event, there is no injustice either to Mr Y or the wider public because the rival operator can continue to operate pending any appeal against an outright refusal to renew their licence.

The complaint

  1. The complainant, whom I will call Mr Y, complains that the Council illegally agreed a temporary private hire vehicle operator licence renewal/extension to another firm despite providing evidence to show it is not "fit and proper" to hold such a licence.

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The Ombudsman’s role and powers

  1. We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word ‘fault’ to refer to these. We cannot question whether a council’s decision is right or wrong simply because the complainant disagrees with it. We must consider whether there was fault in the way the decision was reached. (Local Government Act 1974, section 34(3), as amended)
  2. If we are satisfied with a council’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)

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How I considered this complaint

  1. During my investigation, I have:
    • Confirmed my understanding of the complaint with Mr Y and considered any information he submitted;
    • Made enquiries of the Council and considered its response;
    • Consulted the relevant law and guidance; and
    • Issued a draft decision to the Council and Mr Y, and considered any comments received before making a final decision.

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What I found

  1. Section 55 of the Local Government (Miscellaneous Provisions) Act (1976) sets out what councils should consider when granting licences for the operation of private hire vehicles. It states that councils should not grant a licence unless they are satisfied that the applicant is a fit and proper person to hold a licence, and that the applicant is not disqualified from operating a private hire vehicle because of the applicant’s immigration status.
  2. The law also sets out the considerations for licence renewals. Section 62 says that a council may suspend, revoke or refuse to renew a licence on the following grounds:
    • any offence under, or non-compliance with, the provisions of this part of the Act
    • any conduct on the part of the operator which appears to the council to render them unfit to hold an operator’s licence
    • any material change since the licence was granted in any of the circumstances of the operator on the basis of which the licence was granted
    • that the operator has since the grant of the licence been convicted of an immigration offence or required to pay an immigration penalty; or
    • any other reasonable cause

What happened

  1. Mr Y has a licence to drive a hackney carriage vehicle. He complains that a rival firm is operating illegally and some other local authorities have refused to grant a licence to the firm. The rival operator, which I will call ‘operator b’, was licenced to operate in the Council’s area. Operator b applied to the Council once that licence was due for renewal. The Council was aware that other authorities had refused to issue a licence due to concerns about operator b’s business model. The Council decided to temporarily extend the licence while it decided whether to issue a renewal. The decision was taken by officers with the necessary authority, rather than by the Council’s sub-committee. Mr Y complains about this approach.
  2. The Council says it is common practice for authorities to temporarily extend a licence pending full consideration of the operator’s application for renewal. In cases where a renewal is refused, and the operator appeals that decision, they are permitted to operate pending the outcome of that appeal.
  3. The Council’s sub-committee is due to consider operator b’s application for renewal in January 2019. Operator b continues to work in the Council’s area pending the decision of the committee.

Was there fault in the Council’s actions?

  1. The Ombudsman cannot interfere with the merits of decisions which are properly made. Instead we consider the procedures under which those decisions were taken. If there is evidence of procedural fault in the decision-making process, the Ombudsman may decide that any subsequent decisions are flawed. But without procedural fault, we cannot question the professional judgement of council officers.
  2. I appreciate Mr Y feels the Council should have followed the same approach as other authorities, and issued an outright refusal of operator b’s application for a licence renewal. However the Council felt it did not have enough information to reach its own view about the fitness of the operator. It wanted to gather more information. Decisions to refuse a licence are appealable, so councils need to ensure they have strong grounds before issuing a refusal. Otherwise the decision may be susceptible to a successful appeal by the operator.
  3. I have considered the Council’s own policy and scheme of delegation. The delegation does not state that temporary renewals must be passed to the sub-committee for consideration. I have also considered the law. It is silent on the point of temporary extensions, but it makes clear that councils can only refuse to renew licenses on certain grounds.
  4. The evidence I have seen shows the Council followed the law and its own policy when processing operator b’s application for renewal. I do not find evidence of any procedural fault.
  5. Furthermore, there is the question of injustice. The Ombudsman only investigates complaints when there is the potential of significant injustice caused to the complainant by a council’s actions. While Mr Y’s business may be affected by operator b’s continued operation, it is the case that Mr Y’s business will always naturally be affected by competition from other firms. This is regardless of any fault by the Council.
  6. If the Ombudsman considers there is no evidence of significant injustice to the complainant, we may decide not to start or continue with an investigation. However, we may decide to investigate a complaint if the alleged fault may cause injustice to other members of the public.
  7. Members of the public in the Council’s area may be at risk if operator b is unfit to operate, but is allowed to continue operating pending the committee’s decision. However, if the Council had issued an outright refusal of the application to renew, as Mr Y would have preferred, operator b would be entitled to continue operating pending the outcome of any appeal.
  8. On balance, I consider it is more likely than not that operator b would have appealed had the Council refused the renewal. This is because operator b has submitted appeals against other councils which have refused to grant or renew a licence. It has continued to operate in those areas pending the outcome of the appeals. Therefore, even if the Ombudsman did find evidence of procedural fault in this case, the Council has not caused a significant injustice to either Mr Y or the wider public.

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Final decision

  1. I have completed my investigation with a finding of no fault for the reasons explained in this decision statement.

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Investigator's decision on behalf of the Ombudsman

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