It combined the state-owned Scottish Bus Group and Caledonian Steam Packet Company shipping line.

Grants could be paid where three conditions were met: (i) the line was unremunerative, (ii) it is desirable for social or economic reasons for the passenger services to continue, and (iii) it is financially unreasonable to expect British Rail to provide those services without a grant.

(iv) A limit was also set on the amount of total grant payable was £50 million.

[1] An important provision for remainder waterways allowed them to be transferred to or maintained by local authorities.

Previously vehicles had been liable to annual testing ten years after first registration.