LGA hails move by Home Secretary to make licensing fees cost neutral

The Local Government Association has welcomed the prospect of the Home Secretary allowing councils the flexibility to set cost-neutral fees as part of the licensing fee system.

A clause tabled by Teresa May to this effect will be debated in the House of Commons during the report stage of the Police Reform and Social Responsibility Bill this Wednesday (30 March).

The proposed wording suggests that the Secretary of State, in determining the amount of the fee, may “have regard, in particular, to (a) the costs of any licensing authority to whom the fee is payable which are referable to the discharge of the functions to which the fee relates, and (b) the general costs of any such licensing authority; and may determine an amount by reference to fees payable to, and costs of, any such licensing authorities, taken together”.

The new clause also says that a power under the Act to prescribe the amount of a fee includes power to provide that the amount of the fee is to be determined by the licensing authority to whom it is payable.

Regulations may specify constraints on the licensing authority’s power to determine the amount of any fee. Licensing authorities would also be able to set different fees for different classes of case.

Cllr Nilgun Canver, Local Government Association Licensing Champion, said: “It is the council that people complain to about noise pollution and violent drunken behaviour, so being able to take swift action against those individuals and offending pubs, clubs or restaurants responsible is vital for public protection. But it all costs money.

"Operating the current licensing system has cost council tax payers over £100m more than anticipated and given the current economic climate, could not be sustained. Local authorities have always needed to be able to set licensing fees that allow them to recoup the full cost of their expenditure. A tremendous amount of work and administration can go into ensuring premises are properly licensed and that any complaints are investigated appropriately.”

Canver argued that in the light of the recent cuts, council taxpayers could not be expected to help subsidise the current system any longer.

Leading licensing lawyer Jeremy Allen, partner in Poppleston Allen, said the amendments were “very generally worded but in broad terms appear to expand the matters which the existing fee covers".

“It will be interesting to see what the government has to say but on the whole this must be regarded as bad news for the leisure industry,” he added.

Allen pointed out that when deciding upon the fee, the licensing authority would have to ensure that the amounts it collects equal its costs in respect of the discharge of the licensing function plus a reasonable share of the licensing authority’s general costs. “It is not yet clear how much this latter amount will be,” he said.

Philip Hoult