LGA warns Home Office against "micro-managing" locally set licensing fees

The Government’s backing for the principle of locally-set licensing fees is welcome and long overdue but this has been undermined by consultation proposals that seek to micro-manage the approach, the Local Government Association has warned.

In its submission to the Home Office’s Licensing Fees consultation, which was launched in February, the LGA said it could not support proposals for an overall cap and restrictions on ‘gold plating’.

“This fundamentally undermines the principle of locally set fees, and will create unnecessary central management costs,” the Association claimed.

The submission also said:

• With central government funding to councils reducing by 40% over this Parliament, it was “vital that councils are able to set fees at full cost recovery level as soon as possible, so we urge government to move forward on this quickly”.
• It was unclear about why in this consultation the Home Office proposed an entirely different approach to local fee setting when compared to the Scrap Metal Act it introduced in 2013. “This illustrates the concern raised in our recent Rewiring Licensing document about an inconsistent approach to licensing.”
• The local fee setting approach adopted must be fully in line with the EU Services Directive. The Association said it had concerns that what was being proposed might not be compliant. “If government introduces an approach that is non-compliant, and the UK is subsequently subject to infraction proceedings, local government would expect government, rather than councils, to be liable for any costs linked to illegal fees arising from a government determined approach to fee-setting.”
• The Association’s research in support of the Home Office consultation showed that the evidence did not justify the retention of the NNDR fee structure, “as larger premises do not necessarily incur the highest administrative costs, in terms of applying for and maintaining licences”. The LGA therefore favoured moving away from NNDR to an approach based on locally-set flat fees.
• The LGA was “extremely concerned” that the proposed figure for the annual fee was lower than the existing fee levels. “This seems nonsensical given the existing deficit.”
• The regulations and guidance must be clear about the legitimate inclusion of licensing compliance costs within the cost-recovery process. “Failure to do so could undermine the entire licensing system.”
• The Home Office must ensure that its analysis of the responses to the consultation was proportionate and weighted to reflect the fact that there are many more licensed premises than there are licensing authorities. “The key purpose of this consultation is to ensure the costs of the licensing process are fully recovered.”

The LGA said independent research in 2009 suggested that current fee levels resulted in a council subsidy to businesses of £1.5m a month.