Memorandum by the Local Government Association
(LGA)/Local Authorities Coordinators of Regulatory Services (LACORS)
(RL 14)
INTRODUCTION
1. The Local Government Association (LGA)
speaks for nearly 500 local authorities in England and Wales that
spend some £78 billion pounds per annum and represent over
50 million people. The LGA exists to promote better local government.
The Local Authorities Coordinators of Regulatory Services (LACORS)
provides advice and guidance to councils on regulatory matters,
including licensing and gambling. We welcome this opportunity
to share local authorities' experience of implementation of the
Licensing Act 2003 (the Act) and have some suggestions for lessons
to be learned. It is hoped these suggestions are taken on board
before the implementation of the Gambling Act 2005 by the Department
for Culture, Media and Sport (DCMS) next year.
2. The LGA has been, and remains, supportive
of the broad modernising principles underpinning the Act, such
as the transfer of responsibility for liquor licensing from Magistrates'
Courts to councils, the opportunity for local people to have a
greater influence on licensing decisions and the potential benefits
to tourism and regeneration. We will continue to work with DCMS
and other stakeholders to improve the legislation.
BACKGROUND
3. The transition or "re-licensing"
period started on 7 February 2005. Licence holders had six months
to apply to transfer or vary their existing licences (liquor,
entertainment, late night refreshment, night café, registered
club) or lose their current guaranteed licence permissions ("grandfather
rights"). The opportunity to secure grandfather rights closed
on 6 August. The new system is to go "live" on 24 November
2005 (the "Second Appointed Day") when all existing
licences will be cancelled, regardless of expiry date. This means
that businesses that have not had their new licences granted by
24 November will be unable to offer licensable activities.
4. Local councils have embraced the changes
with preparation for these new duties starting in 2003-04. Attached
at Appendix A an example of a local newsletter aimed at licensees
produced in March 2004 by Woking Borough Council. As we approach
the last weeks of the period for re-licensing 180,000 or so premises,
it is clear that, while events since 7 February have certainly
confounded expectations, councils have coped extremely well with
sometimes trying circumstances. A chronology of key activities
in the process is attached at Appendix B.
5. In terms of the impact on local authorities,
the transition period was, in our view, characterised by three
main factors:
— the lack of applications for the
first five months of the six month "grandfather rights"
period;
— problems inherent in the legislation
and guidance; and
— the delay in laying regulations and
providing advice by DCMS.
6. Many of the problems with the legislation
and guidance were raised by stakeholders during pre-legislative
discussions with DCMS and we are in broad agreement with the British
Beer and Pub Association in this regard. More recently the LGA
has reached agreement with the government to review the problematic
areas from November 2005.
7. The process of converting licences from
six different regimes to one is necessarily complex and we accept
that mistakes were made by some local authorities. LACORS has
set up a referral system with the trade associations where evidenced
instances of difficulties with councils, caused for example by
misunderstanding parts of the legislation, would be followed up
by LACORS. Of the 60 cases taken on by LACORS, 20 were found to
have some substance, and by working closely with the individual
licensing authorities the issues have been resolved. We consider
this low rate to be testament to the professionalism and hard
work of local licensing officers over the last 18 months.
RATE OF
APPLICATIONS
8. Despite indications from the trade that
there would be a rush of applications in February, the rate of
applications was worryingly low:
— by the end of April less than 5%
of expected premises licence applications had been received;
— by the end of June an average of
14% of expected premises applications had been received;
— by 6 August an estimated 85% of applications
were received, the vast majority (about 120,000 applications)
in the final two weeks; and
— since 6 August the rate has tailed
off and the overall position remains at about 85-95%.
9. We believe that there were a number of
reasons for the lack of applications in the first five months:
— a lack of awareness of the changes,
particularly in small businesses;
— complex legal issues, such as embedded
rights and restrictions;
— the need to provide substantial amounts
of information with the application, including new plans and copies
of old licences;
— the delay in providing forms that
could be completed electronically; and
— the late laying of Regulations.
10. Councils had staff and structures in
place ready for 7 February and, in response to the lack of applications,
those resources were put to work to encourage and support applicants
in a variety of ways including: local licensing groups, road shows,
seminars and workshops, face-to-face meetings, mail-shots, regular
newsletters, guidance documents, local media and phone calls to
all known premises. Attached at Appendix C is an example of one
council's communications plan (Leicester City Council). Some other
specific examples are:
— Calderdale Metropolitan Borough Council
sent out regular mail-shots to licensed premises and arranged
an appointment system for people needing assistance with the forms,
including evening advice sessions;
— Canterbury City Council arranged
over 30 seminars, issued press releases and conducted radio interviews;
— the Royal Borough of Kensington and
Chelsea made personal visits to every licensed premises in the
Borough and met with approximately 200 licensees on a one-to-one
basis to assist with the completion of the forms;
— Cardiff City Council issued press
releases, sent application forms to all existing premises licence
holders and organised seminars to provide detailed guidance and
advice on the application procedure; and
— at a national level, a telephone
line, set up by the LGA and LACORS and funded by DCMS, to give
applicants basic information has had over 850 calls, mainly from
small businesses, since it opened in mid July.
11. The increase in applications just before
the 6 August has caused huge logistical problems for authorities.
Apart from the number of applications to be logged and processed,
the Act sets out a statutory time limit of two months within which
those pre-6 August applications must be determined. The two month
limit does not apply to applications received after 6 August and,
given the current workload, there is no guarantee that such applications
will be processed in time for 24 November.
12. During the transition period large numbers
of applications had to be rejected because licence holders were
unable to provide all the information required in the prescribed
format or there were minor errors. The application regulations
are very unforgiving of small mistakes, that can be easily corrected,
but which result in the rejection of an application as the licensing
authority has no discretion in these matters.
PROBLEMS INHERENT
IN THE
LEGISLATION AND
GUIDANCE
13. We believe that the design of processes
and procedures, as well as the level of prescription in the legislations
and Secretary of State's guidance, is responsible for the widespread
dissatisfaction with the process felt by local authorities. Rather
than supporting councils in doing a good job, the legislation
restricts councils to such a degree that the transition period
has been more bureaucratic, more painful and certainly much more
costly than it needed to be. There are many examples of difficulties
caused by the legislation and guidance; below we set out the issues
councils tell us have caused most problems.
Timescales for transition period and determination
of licences
14. The Act requires that the period for
applications for grandfather rights be six months and that applications
received within this period be determined by licensing authorities
within two months. Default options apply if the deadline is not
met: in the case of a straightforward conversion the licence is
deemed granted; in the case of a variation application, for example
for extra hours, the application is deemed refused. The only way
for an applicant to get the variation determined is to appeal
to the Magistrates' court against the refusal, incurring extra
costs for all parties.
15. The close of grandfather rights on 6
August fell on a Saturday, causing extra pressure on councils
to keep offices open or have a deposit facility available. Many
disputes arose after the event when applications received on Monday
10 August but posted on 5 August were deemed to have missed the
deadline.
Restriction on the size of Licensing Committees
16. The Act restricts the size of the main
Licensing Committee to 15 members, with up to five sub Committees
of three members permitted; Committee proceedings are also prescribed.
These restrictions apply to all 376 licensing authorities, regardless
of size or workload. Other council committees are not restricted
in this way.
17. Councils are getting many more representations
on variation applications than expected (about 50%) which means
a Licensing Committee hearing must be held within the two months
period. One small District Council reports that 44 hearings were
scheduled in a five week period; another authority held 19 hearings
back to back over three days. For large authorities hundreds of
hearings may have to be arranged. Many hearings are not going
ahead at the last minute as mediation between applicants and residents
seem to be working, but the work, and costs, involved in setting
up the hearing, producing reports etc remain. A few authorities
have reported that the number of hearings is beginning to impact
on other important council business.
Absence of a "slip rule"
18. A slip rule, such has operated successfully
in other local authority licensing legislation for many years,
enabling the licensing authority to waive irregularities which
do not prejudice anybody would certainly have reduced the number
of rejected applications. In practice, while many councils were
willing to be "pragmatic" in their approach to applications
in order to assist applicants, the inability of councils to be
flexible within the law has led to ill feeling and accusations
of inconsistency from businesses.
Consultation with the wider community
19. The regulations require applicants to
advertise their application in the local paper and to put an A4
notice in the window of the premises; residents must make their
representations within 28 days of the application being made.
Many residents complain that these methods are ineffective and
that by the time they became aware of the application the deadline
had already passed, particularly during holiday periods. A lack
of clarity about the wider role of councils as community leaders
has led to controversy with some applicants accusing councils
of encouraging representations if they publish details of applications
in local newsletters or on the council website. Similarly, a lack
of understanding of the role of elected representatives in consulting
and speaking for their constituents, while avoiding bias or maladministration,
has led to pressure on authorities from the business sector.
National fee structure
20. The fees for licence applications are
set out in the regulations. The government's policy, which the
LGA supports, is that the fees should achieve full recovery of
the administrative, inspection and enforcement costs falling on
any licensing authority associated with their licensing functions
under the Act, including start up costs. Additionally cost recovery
should be of the full cost to the local authority, not just the
costs of the licensing authority, ie the costs to "responsible
authorities" such as environmental health, planning, social
services and Trading Standards.
21. However, the LGA has long argued that
the assumptions and principles that underpinned the fees structure
were flawed and would not achieve the government's policy intention.
A recent survey of licensing authorities by the LGA/LACORS shows
that, as predicted, costs have outstripped fee income received
by many millions of pounds. The following table shows the actual
costs and income for 2004-05 and the projected costs and income
for 2005-06 for England and Wales:
|
LICENSING ACT 2003 | 2004-05
Actual
Amount
| 2005-06
Projected
Amount |
|
| Total Direct Costs | £34,890,682
| £63,703,060 |
| Total Indirect Costs | £11,034,965
| £20,934,466 |
| Total Capital Financing Costs | £616,035
| £691,621 |
| TOTAL COSTS | £46,541,682
| £85,329,148 |
| TOTAL INCOME | £7,478,861
| £53,346,565 |
| | |
| - | - |
| TOTAL SURPLUS/LOSS | £39,062,821
| £31,982,583 |
|
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DELAYS IN
LAYING REGULATIONS
AND PROVIDING
ADVICE BY
DCMS
Late laying of Regulations
22. Most of the operational detail under the Act, such
as applications forms, plans and advertising requirements, is
contained in the regulations. The regulations were not laid until
13 January 2005, 18 months after the Bill was passed and just
over three weeks before applications could start. This left councils
with very little time to develop procedures, train staff and publicise
the requirements. It also caused problems with software installation
as the relevant licensing modules could not be completed and fully
tested in the time available.
23. These difficulties were compounded by the application
forms being amended on the Friday evening of 4 February, which
meant that many early applications were rejected for being on
the wrong form. The Fees Regulations, not laid until 24 January
2005 when local authority budgets were already set, were amended
on 22 February 2005, two weeks after applications commenced, leading
to further confusion and strained relations with applicants.
Advice from DCMS
24. As stated above, the legislation is complex and as
issues have arisen councils, through LACORS, have sought clarification
from DCMS as to the meaning or policy intention behind the legal
provisions. This mechanism was set up in 2003 and many of the
issues have been resolved, albeit some with delays. The paragraphs
below set out a crucial issue that is still causing problems and
in some cases holding up the issuing of new licences.
25. Premises that benefited from grandfather rights were
converted to the new system with all the rights and restrictions
from the old licence converting to conditions on the new licence.
Those rights and restrictions arose from many different pieces
of legislation and, in the case of liquor licences, were often
not recorded on individual licences.
26. Councils, not being the liquor licensing authority,
were not familiar with the liquor legislation and LACORS requested
in November 2004 that DCMS provide a full list of rights and restrictions
in the statutory guidance under the Act. In the absence of the
department following our recommendation legal opinions were commissioned
by individual authorities, professional organisations and businesses.
LACORS continued to ask DCMS for a view which was finally provided,
although not covering all the previous legislation, in May 2005.
LESSONS TO
BE LEARNED
Central planning and preparation
27. Some suggestions from local authorities to make the
process more effective:
— When all stakeholders are in agreement then government
departments should have a sound policy basis for rejecting those
views and communicate it to stakeholders.
— All relevant stakeholders should be represented
and no single sector should predominate.
— The legislation would have benefited from pre-legislative
scrutiny.
— Simpler regulations, carefully drafted.
— Desk top piloting of forms and processes.
— Proper project planning for implementation with
robust governance arrangements, sufficient capacity and resources.
— A needs analysis of the various trade sectors
to be carried out in terms of awareness, media campaigns and advice.
— Legal information should be made available in
good time—it is not good enough to say that the courts must
decide.
Local authority discretion
28. We believe that the decision to remove council discretion
was a mistake. This meant that councils, applicants and residents
became frustrated by the inflexibility of the legislation. We
would like to see greater flexibility brought back into system
in line with ODPM's stated aim of increased freedom for local
councils.
Local authority costs
29. DCMS invested no money "up front" to get
the system ready and councils are now carrying significant deficits
as a result. The 2006-07 financial year will be difficult for
local authorities as the underlying grant increase could well
be less than 1%, so even marginal cost pressures could impact
on council tax. The LGA and LACORS will continue to work with
the Independent Fees Review Panel and would like to see changes
made to the Fees Regulations before the next financial year to
recoup these losses and ensure that further deficits are not accrued.
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