Setting a fee

On 30 and 31 March the House of Commons held its first and second days of the report stage together with a third reading of the Police Reform and Social Responsibility Bill. Jonathan Hyldon considers the amendments which were tabled by the Government to the Bill in respect of licensing.

The Police Reform and Social Responsibility Bill (‘the Bill’) seeks to amend and supplement the Licensing Act 2003 with the intention of ‘rebalancing’ it in favour of local authorities, the police and local communities. The Bill has now passed through the Commons during which at its final reading and report stages a number of new clauses and amendments to existing clauses were proposed.

The first of the proposed clauses associated with licensing that was considered related to the power of licensing authorities to set fees.

This clause was adopted and accordingly, if passed, will enable the Secretary of State to make regulations prescribing the amount of any licensing fees. The amounts will be determined by reference to the costs of any licensing authority which is referable to the discharge of the function to which the fee is payable AND the general costs of any such licensing authority. Alternatively there will be a power to delegate such setting of the fee to the licensing authority itself, albeit regulations may be made to constrain the local authorities in this.

The Parliamentary Under-Secretary of State for the Home Department, James Brokenshire, commented: “The new clause does not represent a change of principle. The current fees are supposed to cover the legitimate costs of licensing authorities in discharging their functions under the 2003 Act. However, there has been widespread agreement for some time that they do not achieve that.”

It was stated that fees could be set centrally again, but they have chosen to move to set fees locally because “it may be difficult to achieve a close approximation to full cost recovery with nationally set fees. Different areas do not have the same costs, and it is unavoidable that a blanket fee level would leave some councils with a deficit or provide an excessive income to others.”

Further, Brokenshire added: “To provide further reassurance to fee payers, there will be a nationally set cap on fee levels. Under the new clause, that is provided for by the ability of the Secretary of State to apply constraints to the licensing authority's ability to set fees. I intend that the level of the cap will be set in regulations after consultation. The consultation will contain a detailed impact assessment of the proposal.”

In most discussions over the Bill the local authorities’ principal pre-occupation has been about licensing fees themselves over which they have been pressing for the ability to determine fees locally to reflect the costs of providing and enforcing the system. This will therefore be welcome news to the authorities, if not to the trade!

If passed, as highlighted above, gone will be a centrally fixed range of fees, with instead there being inevitable regional variations much like the current regime in Scotland. Undoubtedly, there is likely to be an increase in such fees albeit Brokenshire was quick to point out that “Fee payers should be reassured that locally set fees will not mean that licensing authorities can set whatever fees they like. First, they will only set the level of the fee. They will not be permitted to design new fees or their own fee structure; nor will they be able to use licensing fees as an income stream.”

It was also confirmed that guidance to local authorities on the setting of fees, including statutory guidance under section 182 of the 2003 Act will be issued.

The second Clause considered, Clause 2, related to the repeal of alcohol disorder zones (ADZs). This too was read and added to the Bill. The new Clause will remove sections 15 to 20 of the Violent Crime Reduction Act 2006, of which it was stated by Dr Huppert at the reading that they were “totally ineffective and did not work”. This is a view widely endorsed by the majority whether in government, local government or the trade. Brokenshire commented that “This optional power for local authorities [ADZs] was so well considered and useful that it has been completely unused by local licensing authorities to date”.

A new Clause 3 relating to the general duties of licensing authorities was also read. Diana Johnson, Labour MP, had sought the introduction of a fifth licensing objective: "to protect and improve public health".  After consideration this was withdrawn.

The other amendments of note were minor amendments to the late-night levy clauses in part 2 of the Bill that clarify the effect of the provisions. At Clause 133 this entailed making it clear that if licensing authorities amend the categories of premises in their area that benefit from an exemption or reduction in their levy liability for a subsequent year there may already be none as well as one or more premises in those categories for the existing year.

A further amendment to Clause 133 clarified the basis on which licensing authorities must ensure that any exemption or reduction categories that apply in their areas in a subsequent year accord with the categories prescribed in regulations.

Finally, further amendments ensure that local authorities do not suffer a burden in introducing the late-night levy. They do not change the intention underlying the levy; nor do they change the burden on business.

Moving forward the first reading of the Bill took place on 1 April in the Lords. This stage was a formality that signaled the start of the Bill's journey through the Lords. The second reading - the general debate on all aspects of the Bill - is scheduled for 27 April.

Jonathan Hyldon is a solicitor at law firm John Gaunt & Partners.  He can be contacted on 0114 266 8664 or by email on This email address is being protected from spambots. You need JavaScript enabled to view it..