I'm not an expert in the murky world of franchising but as I understand it, the fleet quota is enough to run the service with a small maintenance buffer. If a route is closed the stock used on it is also removed from service. When Northern began it was delayed by 2 months because the loop was originall going to close before Northern took over and the bid was submitted on that basis, it was then reprieved so the numbers needed looking at again. Northern needed x units to run all service including the loop but then it was closed so it became 5 over it's allocation (possibly something to do with 'no growth?). Like I said, I'm no expert in franchise clauses but this is the way I remember it being described and being the reason why the 5 units were stopped.