House of Commons - Explanatory Note
Licensing Bill [HL] - continued          House of Commons

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339.     The government intends that the costs of the new regime will be recovered through the licence fees. Licensing authorities will incur new costs in carrying out their functions under the Bill in respect of an estimated 200,000 premises (including clubs). These increased costs will be offset by estimated fee income of £610 million over an initial period of operation of ten years (the period of duration of a personal licence). A significant part of this income and expenditure, in respect of the 182,000 existing premises, will occur during the 12-month period of transition. This period will be labour intensive for local authorities, requiring significant temporary increases in manpower to meet the demand. Fees are paid by applicants in advance of applications being processed and considered. However, local authorities will have some initial outlay prior to transition in terms of recruitment and preparatory work on licensing policy statements before the fee income is received. The necessary income is expected to be recovered well within the financial year. In addition, fees will be set centrally by the Secretary of State to recover the full costs of administration, inspection and enforcement, but local authorities are not expected to have any enforcement costs during the period of transition. This additional revenue is expected to provide income to develop systems for the future management and enforcement of the licensing regime.

340.     The police will continue to have a major role in enforcing licensing law, particularly in respect of premises licensed to sell alcohol. Their costs will continue to be marginal to, and indivisible from, their general role of policing the community, particularly at night. Associated police costs will also continue to arise mainly from the policing of the streets after customers leave the controlled environment of licensed premises. However, the abolition of fixed closing times and the prospect of a more orderly and gradual dispersal of customers are expected to reduce significantly the number of public order incidents which the police currently are required to attend. Although the number of such incidents should be fewer, they could be expected to occur later and be more evenly spread throughout the night. There should therefore be no increased costs for the police, but it is unlikely that there will be significant savings. However, the new regime should provide much greater flexibility in the deployment of police resources at night and the ability to focus on other areas of crime.

341.     Fire authorities already inspect and carry out functions in respect of licensed premises under the existing licensing regimes. They should not therefore be affected in terms of costs or manpower.

342.     The courts already handle appeals under the existing licensing regimes. But there should be some savings for the Crown Court who will no longer be involved as an appeal court in relation to decisions made by a licensing authority. However, these savings would be marginal to their wider duties. The licensing justices and magistrates' courts currently control alcohol licensing for premises and qualifying clubs. They recover their costs from licence fees and therefore they would not enjoy any savings. The magistrates' and clerks' manpower on licensing will be redeployed on criminal court work.

343.     Except as noted below, central government is not expected to incur any additional costs or require any additional manpower. The Department for Culture, Media and Sport already incurs costs of publicising the licensing regimes, Government policy in respect of them and in providing advice and guidance on licensing issues. The Bill does not add to that. However, the establishment of the Central Licensing Authority will give rise to expense which is to be paid out of money provided by Parliament and the Government announced its intention to provide for nil fees in respect of the provision of regulated entertainment at certain venues. Insofar as any provision is made for nil fees these costs will be absorbed by the Revenue Support Grant.


344.     The proposed licensing system set out in the Bill will bring together the existing licensing regimes covering the sale of alcohol, provision of public entertainment (including cinemas and theatres), and the provision of late night refreshment, which have evolved over a number of years and the purpose of which is unclear. It will have a significant deregulatory effect for the industry, except for premises providing late night refreshment outside London, and boats, which are currently outside the regime. It will reduce bureaucracy by introducing a single integrated scheme with streamlined procedures for applications, renewals and variations. This will result in reduced legal and administrative costs. A consistent and central system of cost-recovery fees will reduce longer term expenditure on these. There will also be savings to organisations holding small temporary events currently requiring occasional licences (such as charities, schools, for example). In total, the savings to business are estimated at £1.9 billion over the first ten years.

345.     A copy of the Regulatory Impact Assessment can be found in the library of the House or at:


346.     Section 19 of the Human Rights Act 1998 requires the Minister in charge of a Bill in either House of Parliament to make a statement, before second reading, about the compatibility of the provision of the Bill with the Convention rights (as defined by section 1 of that Act). The Right Honourable Tessa Jowell, the Secretary of State for Culture, Media and Sport, has made the following statement: 'In my view the provisions of the Licensing Bill are compatible with the Convention rights'.


347.     The provisions of the Bill will come into force in accordance with the provisions of one or more commencement orders made by the Secretary of State.

March 2003

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Prepared: 17 March 2003