House of Commons - The Licensing Act 2003 - Culture, Media and Sport Committee

The Licensing Act 2003 - Culture, Media and Sport Committee Contents

3 THE LICENSING PROCESS

9. The introduction of the new system aimed to simplify the process of licence application for the licence-holder. The Government told us that it believes that a substantial reduction in bureaucracy has been achieved.[5] Following the coming into force of the Licensing Act, the application process for a licence is, in summary, set out below:

10. Many of those who submitted evidence to us agreed that the removal of eight separate licensing regimes and their replacement with a new, streamlined process under the 2003 Act had been a welcome development. The British Beer and Pub Association reported that "in general terms, we believe that the Licensing Act 2003 has made the licence application process more straightforward for most types of premises",[6] and a survey of one in seven councils, half of police authorities and just under a third of all Primary Care Trusts conducted by the Local Government Association, to gauge views on implementation of the Act, concluded that the Act had simplified and improved licensing processes and had contributed significantly to closer public sector working.[7]

11. There were concerns however, especially from those whose premises were run by volunteers, that the process of applying for a licence is still too bureaucratic, complicated and time-consuming. This is despite the fact that much of the effort is now front-loaded as the licence, once granted, is not required to be routinely renewed. The Central Council for Physical Recreation (CCPR) told us that in a survey of its members they reported a marked increase in the administrative burden placed on club volunteers by the new regime:

The Committee of Registered Clubs Association (CORCA), which represents working men's, political, ex-service and coal industry welfare clubs, reported that its members found the required forms "lengthy and not user friendly".[9]

12. We have heard that errors on application forms are currently running at 65%.[10] Despite Government guidance to local authorities that "forms should not be returned if they contain obvious and minor factual errors that can easily be amended"[11] many local authorities are rejecting applications which contain minor errors, leading to increased administrative time and cost:

13. We recommend that the Government should, in conjunction with local authorities, licence applicants and other stakeholders, evaluate the licensing forms with the aim of making them more user friendly and reducing the level of error. The Government should also remind local authorities that licensing applications containing minor factual errors should be amended not rejected.

COSTS

14. The fees for an application for a licence were set by Regulations in 2005, on the basis of full-cost recovery. Fee levels for premises licences and for club premises certificates are set in bands according to rateable values. Premises with a rateable value of £4,300 or less fall within Band A and incur a fee of £100; at the top end of the scale (Band E), premises with a rateable value of £125,001 or above incur a fee of £635. A premises licence, once granted, may last indefinitely unless revoked. An annual fee is payable, at rates set out in Schedule 5 to the Regulations.

Rateable value of applicant premises	Band	Base fee	Annual base fee
Nil to £4,300	A	£100	£70
£4,301 to £33,000	B	£190	£180
£33,001 to £87,000	C	£315	£295
£87,001 to £125,000	D	£450	£320
£125,001 and above	E	£635	£350

15. There are also a number of fees associated with an application for a licence: for the drawing up of plans of the premises, the production of the required number of copies of the licence application, the placing of newspaper advertisements and signage near the site for which a licence is being applied for and for legal fees if the applicant chooses to have their application considered by a solicitor in advance of submitting it.

16. During the passage of the Licensing Bill, the Government claimed savings of nearly £2 billion would be achieved through its enactment.[13] In evidence to us, the Minister with responsibility for licensing, Gerry Sutcliffe MP, said that he believed that real cost savings had been achieved, both for applicants and local authorities:

17. This contrasts with evidence we were given. Amateur run sports and social clubs consider that costs to them have increased and benefits realised have been minimal. Brigid Simmonds, Chairman of the Central Council of Physical Recreation (CCPR), explained:

18. The commercial sector argue that any savings from the simplification of the licensing regime has been eaten away by other requirements flowing from the Act, such as the cost of advertising the licence application and the fact that currently any change to a licensed premises, however minor requires an entirely new licence.[16] There are also a number of ongoing costs which may be conditions of the granting of the licence such as the introduction of CCTV cameras and the provision of security staff.

19. Local authorities themselves believe that, to date, the costs of implementing the new licensing regime exceed the cost recovery by some £100 million.[17] This view was supported by the Independent Licensing Fees Review Panel chaired by Sir Les Elton, which was set up by the Government to consider the fees regime and reported in January 2007.[18] It recommended that fee levels for the three years beginning 2007-08 should be increased by 7%, but this recommendation has not been implemented.

20. Despite these concerns, no-one has seriously suggested to us that the new regime should be repealed; most premises and personal licence holders now possess licences, and the cost of this process, to both licence holders and licensing authorities, is largely over. We consider the position of those who provide "portable" entertainment[19] and for whom premises licences are an ongoing issue, such as circuses, later in our report at paragraphs 100-114.

21. The main concern is that of ongoing costs, which for the majority of licence holders come from two sources: the annual registration fee, and costs arising from a wish to alter a licence. It is these ongoing costs which sporting and not-for-profit clubs feel to be a particular burden. The then Minister with responsibility for licensing, Rt Hon Richard Caborn MP, believed that "the vast majority of sports clubs will fall in a band between about £70 and £100".[20] Yet, according to a survey of 2,430 sports clubs by the CCPR, most clubs fall into Fee Band B, for which the premises certificate application fee is £190 and the annual renewal fee is £180, or Band C where the charges are £315 and £295 respectively.[21] In giving evidence to us the CCPR and Committee of Registered Clubs' Associations (CORCA) did not claim that it was these fees alone which were causing sports and social clubs to fail. But when combined with other factors, such as the smoking ban, a significant minority of clubs were finding it impossible to stay in operation. The CCPR estimated that approximately 50% of sports clubs were breaking even or making a loss,[22] and CORCA told us that the majority of its clubs were in difficulties: "I believe it to be true that we are about 80%, struggling—really struggling. More clubs are leaving the union because they are just about to cease".[23]

22. These not-for-profit and sporting clubs are dissatisfied that they are increasingly being treated in exactly the same way as commercial ventures, run for profit, despite the obvious differences between them, both in terms of their object and their turnover. A sailing club with an annual bar turnover of approximately £3,500 is charged the same for its licence as a nearby wine bar with turnover in the region of £3,500 per week.[24] Sports clubs argue that this is particularly unfair in their case as the main purpose of a sporting club is that of undertaking healthy activity not the consumption of alcohol:

23. The CCPR, as the umbrella body which represents sporting clubs, cited to us the precedent of the Community Amateur Sports Club (CASC) scheme. Under this scheme a sports club that registers with the Inland Revenue as a CASC is eligible for 80% mandatory rate relief. The CCPR would like to see such a scheme extended to the licensing regime, as currently it believes that sporting clubs, which are unlikely to cause concerns under the licensing objectives, are in effect subsidising the commercial sector:

24. The Government is aware of this issue, and has asked the Independent Fees Review Panel to consider the matter in relation to sports and not-for-profit clubs. The Panel agreed that a case could be made to reduce the fees of those clubs who participated in the Community Amateur Sport Club (CASC) scheme, whereby a sports club that registers with the Inland Revenue as a CASC is eligible for 80% mandatory rate relief. But the Panel did not recommend that this discount should be applied to the licensing regime: "We are however uneasy about recommending this discount. We have no evidence that any amateur sports clubs have actually had to discontinue licensable activity as a result of the current levels of licensing fees".[27]

25. The Panel was sympathetic to the cost burden on not-for-profit clubs but believed that the best way to address this was through the reduction of administrative burden, by amendment to the Temporary Event Notice scheme and the removal of the need for a Designated Premises Supervisor.[28] The Minister told us that although he was aware of the ongoing concern of not-for-profit clubs as to the rate of charging for a premises licence he did not think it appropriate to apply a discount: "the difficulty is that we are talking about alcohol and the subsidising of alcohol".[29] The Legislative Reform Orders recently brought forward by the Government seek to bring into effect the reductions in administrative burden recommended by the Panel.[30]

26. We note that the Government has previously considered the issue of fees being charged to not-for-profit and sporting clubs for premises licences, and the conclusions of the Independent Fees Review Panel on this matter. We accept that the cost of alcoholic drinks should not be subsidised by the Government. However it seems to us highly unsatisfactory that such clubs, with modest turnover and laudable aims, should be treated in exactly the same way as commercial operations. This is especially so in the case of sports clubs. We recommend that in the case of not-for-profit clubs only the bar area should be taken into account when assessing the rateable value of the premises for the purposes of determining the appropriate licensing fee. We further recommend that all sports clubs, regardless of whether they are registered CASCs, be placed in a fee band based upon 20% of their rateable value.

OPPORTUNITIES FOR INCREASED INVOLVEMENT IN LICENSING DECISIONS

27. One of the main changes brought about by the introduction of the Licensing Act is the degree of public involvement in decision-making on licensing applications. Local councillors, rather than magistrates, consider applications for licences to sell alcohol; and the general public has an opportunity to submit views on applications for licences directly to licensing authorities. One of the Government's key objectives in transferring the alcohol licensing system from the courts to local government was to improve local accountability for licensing decisions.[31]

28. We have received mixed views as to the success of this change. We have heard from local councillors that while applications in residential areas often garner input from local residents, it is much harder to engage potential users of, say, a city centre premises in the licensing process.[32] Equally we have heard from organisations representing musicians who believe that the requirement for public consultation contained in the Act has increased the likelihood that the views of a "vocal minority" will dictate music licensing policy, leading to the cancellation of events such as the summer concerts at Kenwood House in London.[33]

29. The criteria for commenting on a licensing application is that the comment must come from either a "responsible authority" or an "interested party".[34] A "responsible authority" covers all sorts of persons and bodies, including the relevant chief officer of police, the local fire authority and the local planning authority, but not the licensing committee itself. An "interested party" is defined as being a person either living in the vicinity of the premises or involved in a business in that vicinity, or a body representing such persons. Despite this definition of what constitutes an interested party we have received reports of councils not taking into account comments of some stakeholders. In evidence to us Object claimed that some councils operated a "postcode test" and only considered views of residents who lived very close to a premises which was seeking a licence.[35]

30. We have received evidence that the views of a small vocal minority can have a disproportionate sway on a licensing authority. The Musicians Union explained to us that:

31. Another concern is that the public are not encouraged to support licensing applications, only to object to them. Feargal Sharkey pointed to the fact that a number of councils actually refer on their websites to the public's opportunity to comment on licensing applications as a chance to make an objection:

32. We welcome the increased opportunities for public involvement in decision making and encourage local authorities and the Government to make every effort to ensure that those opportunities are taken up. It is important that local authorities make it clear that a comment on a licensing application can be in its support as well as an objection, and ensure that all those with an interest in the application, not just local residents, are able to comment on it.

PERSONAL LICENCE HOLDERS

33. One of the requirements of the Licensing Act is that a person who wishes to obtain a premises licence to sell or supply alcohol must be in possession of a personal licence. To qualify as a personal licence holder an individual must be over the age of eighteen, possess a recognised qualification and show the licensing authority that he has not been convicted of certain offences.[38] A personal licence is valid for 10 years, and can be renewed. In addition a premises must designate a premises supervisor, who must be in possession of a personal licence, in order for it to be allowed to supply alcohol.[39] Every sale of alcohol must be made, or supervised, by a personal licence holder (who may, but does not have to be, the designated premises supervisor).[40]

34. Personal licence holders are liable to have their licence revoked if they commit an offence set out in Schedule Four to the Licensing Act.[41] However we have heard that in reality the lack of a national database for personal licence holders means that it would be possible for a licence holder to commit an offence in a part of the country different to that where they hold their licence and not have their licence revoked. In evidence to us Professor John Howson JP, Deputy Chairman of The Magistrates' Association, explained the problem to us using the following scenario:

35. It would also be possible for a licence holder whose licence had been revoked to subvert the system by simply applying for another one from a different licensing authority.[43] The Magistrates' Association suggested to us that either local government or a national regulator should be empowered to create a national database. The Minister told us that the Act contained powers for the Government to create a national database, but in order for it to do so an appropriate business case needed to be made:

36. We are not convinced by the argument that a lack of evidence that the personal licence system is being abused is a reason not to create a national database of personal licence holders. Indeed without one it seems to us unlikely that such evidence could be proffered. We recommend that the Government should consider how to implement a national database—to allow law enforcement agencies and licensing authorities to share information more effectively—and to consider which would be the most appropriate authority to maintain it, as it will be crucial that any database is kept up-to-date.

DEATH OF LICENCE HOLDER

37. A further issue relating to personal licences is the difficulty in transferring the licence within the proscribed time following the loss of the personal licence holder named on the premises licence. Currently there is a seven day period in which to apply either for a permanent transfer of the licence,[45] or for an Interim Authority Licence for a different personal licence holder to take responsibility for running the premises for a defined period.[46] Failure to take action within the seven day period means that the premises has to cease trading. The British Beer and Pub Association (BBPA) told us of the problems this time limit can cause owners of licensed premises, especially in the case of the death of the licensee:

38. The Minister acknowledged the difficulty the seven day notification period caused to families who had been bereaved, and it was confirmed that the Government was prepared to look at this issue in the context of the Legislative Reform Orders which it planned to bring before Parliament.[48] We welcome the Minister's recognition of the difficulties faced by bereaved families in taking action within the required seven day period following the death of the licensee. We recommend that in such cases the allowable period should be extended from seven to 21 days.

LEGISLATIVE REFORM OF THE LICENSING ACT

39. The Government told us that it planned to amend the Licensing Act to remove the requirement for village halls, church halls, chapel halls, community halls and similar community premises to designate a premises supervisor.[49] The relevant Legislative Reform Order was laid before Parliament on 8 December 2008 and approved by the House of Commons on 23 February 2009. Under the Order, the concept of the supervision of the supply of alcohol is retained, but instead of a personal licence holder the responsibility for authorising sales of alcohol falls on the whole management committee or board of the licensed premises. Providing the management committee holding the premises licence has properly authorised the sale of alcohol, e.g. through a hire agreement, an organisation or hirer using these premises for the sale of alcohol under this authority is not required to obtain a personal licence.

40. The Government believes that this change will remove a barrier to these types of premises, who might previously have struggled to find volunteers willing to take on the responsibility of being a designated premises supervisor, to applying for a licence to supply alcohol, as well as removing one of the costs associated with the licensing process. We welcome the Legislative Reform Order, which removes the need for certain volunteer-run premises to designate a specific premises supervisor, but note that there will still be considerable costs and administration involved in obtaining a premises licence for village and community venues. We hope that the Government will consider further ways in which costs and administration can be reduced for such venues.

41. The Government also tabled a second Legislative Reform Order in relation to the Licensing Act on 8 December 2008. This Order proposed a streamlined procedure for applying to make minor changes to a premises licence, dispensing with the requirements to advertise such proposed changes and the obligation to consult in all cases with "responsible authorities" such as the police and other "interested parties", such as local residents and businesses. The Government estimated that some 30% of applications to vary are for changes to licensed premises that may be considered minor. The Explanatory Document cites relocation of a bar as an example of a "minor variation".[50]

42. The Regulatory Reform Committee is required to examine and report on all draft Legislative Reform Orders proposed by the Government under the Legislative and Regulatory Reform Act 2006. In its Report on the minor variations Order it raised a concern that the requirement for public consultation for minor variations had been removed, and recommended that:

43. In response to the concerns of the Regulatory Reform Committee the Government withdrew the Order, relaying a revised version on 26 March. This revised version requires minor variations applications to be advertised outside the relevant premises for a period of 10 days and obliges local authorities to consult on the proposal, allowing interested parties to make representations on the likely effect of the variation.

44. Under the proposed minor variations procedure the local authority would have a shortened period of 15 days for considering applications and a reduced, flat fee of £89. There would be no right of appeal, but applicants would be free to submit a full application if their application under the minor variations procedure was rejected. The procedure only applies if "the variation proposed in the application could not have an adverse effect on the promotion of any of the licensing objectives".[52] Where a plausible case can be made that a variation might have such an impact the application cannot fall within the minor variation provisions and the authority would be obliged to reject it. We agree that the public should always be involved in decision making and endorse the amendments proposed to the Legislative Reform Order by the Government.

45. We have been made aware of the difficulties in using the current provisions to make minor variations to a licence, with Paul Smith, the Executive Director of Noctis, the trade association for businesses operating in the UK late night economy, claiming that even moving a fire extinguisher would necessitate a fresh licence application: "You can have a situation where you want to move a fire extinguisher, for instance, and because there is no [effective] minor variations process it will cost you thousands of pounds". [53] The BBPA also told us of a number of premises which failed to include live music in their licensing applications when moving to the new system, meaning that unless they apply for a new licence, with all the attendant costs and administration, they are no longer able to put on live music performances in their premises.[54]

46. It is unclear whether the new "minor variations" procedure will make it easier for music to be added to an existing licence, due to conflicting statements within the Explanatory Note which accompanies the Order. On the one hand it states that "the addition of live or recorded music to a licence may impact on the public nuisance objective".[55] On the other it holds that "It is very much the Government's intention that applications to vary a licence for live music should benefit from the minor variations procedure".[56] We believe that the Government should act to remove this confusion and make it clear that changes to a licence for live music can be made using the minor variations procedure.

47. Much will depend on how this Order is applied in practice by licensing authorities, and where they decide to draw the balance between music as a positive cultural force and music as a source of public nuisance. We welcome any attempt to simplify the process of making a minor variation to a licence and reduce unnecessary costs. However, we are concerned at the apparent contradictions contained within the Explanatory Note, and the wording of the Order itself, which we believe will severely restrict the ability of licensees to take advantage of this procedure for all but the most minimal of variations. The Government must ensure that the discretion it is granting to licensing authorities is a real discretion, and not a power that, in practice, they are unable to use.

TEMPORARY EVENT NOTICES

48. Many premises and organisations, especially community groups, rely on Temporary Event Notices (TENs) rather than a premises licence to regulate licensable activities at specific events throughout the year. The maximum number of people who can be at an event regulated under a TEN is 500; the event can last no longer than 96 hours and a minimum of 10 working days notice must be given of the TEN's use.[57] In order to prevent TENs being used when a premises licence is in fact the appropriate licensing vehicle there must be a gap of 24 hours between each event applied for by the premises user,[58] and there is a limit of 12 TENs per premises per year, with an individual premises user able to apply for a maximum of five of these.[59]

OBJECTION TO A TEN

49. Only the police are able to object to a TEN, on grounds of crime prevention, and they must do so within 48 hours of receipt of notice of the TEN application.[60] If there is no objection from the police then the event can go ahead without any reference to the licensing authority or consideration of the views of the public. We heard from the Association of Town Centre Management,[61] the Magistrates' Association[62] and from the police themselves[63] of the practical difficulties which the police face in considering a TEN application within the statutory timeframe, especially when a weekend forms part of the 48 hour period. Indeed, in oral evidence to us Chief Inspector Studd, representing the Association of Chief Police Officers (ACPO), stated that "the 48-hour response time that the police have is completely inadequate".[64]

50. We have also heard concern that there is no opportunity for anyone other than the police to have their views taken into account in relation to a TEN, unless the police serve an objection notice in which case the licensing authority must hold a hearing to decide whether to allow the event to go ahead.[65] At no time can the views of the public on the TEN be taken into account. Patrick Crowley, Licensing Manager, Royal Borough of Kensington and Chelsea, also pointed out to us that the grounds of objection to a TEN are more narrowly drawn than for a premises licence:

51. We do not wish to make the process for putting on a temporary event as onerous as that of applying for a permanent premises licence, and as such we believe that the grounds for objection to a TEN should remain narrower than that for a premises licence. However the fact that there is no opportunity for other interested parties to comment on a TEN seems to us to be contrary to the Government's objective of increasing local involvement in decision making on licensing matters. The Department has highlighted to us that it gets very little correspondence on the subject and a large proportion of TENs are granted to community groups such as Parent Teacher Associations who are involved in low risk activities from the point of view of the licensing objectives.[67] Nevertheless we recommend that, in addition to the police, councillors, as elected representatives of the public, should be able to object to a TEN, and that the period for such objections should be three working days to allow both the police and councillors time to consider adequately whether they wish to object.

CONTROL OF THE TENS SYSTEM

52. We received conflicting evidence as to whether the control of the number of TEN events which can be held in any one year, 12 events with a maximum of five notices in the name of any one person, allows a premises to hold too many or too few events. Councillor Geoffrey Theobald, Chair of Local Authorities Coordinators of Regulatory Services, told us that the fact that each of the 12 TENs could be used for a maximum of 96 hours might mean that a premises could "constantly be using Temporary Event Notices"[68] instead of being regulated in a more controlled way.

53. In contrast those representing not-for-profit clubs claimed that they are currently not able to apply for TENs frequently enough and that the restriction on any individual having more than five TENs in any one year was unduly restrictive.[69] In the case of some sporting clubs the need to apply for a TEN 10 days in advance of its use caused problems:

54. We also heard anecdotal evidence that it is possible to subvert the TENs system through moving the location of a bar in a premises around a room, with Professor Howson of the Magistrates Association telling us:

When questioned by us however, Andrew Cunningham of DCMS assured us that there is no actual proven evidence of such a practice actually taking place, saying "Anecdotally that has been argued many times and nobody has ever actually found somewhere where this has been done successfully".[72]

55. The issue of the appropriate number of events which could be held under the TENs system was carefully considered by Parliament during the passage of the Licensing Bill.[73] It was also considered by the Independent Fees Review Panel who recommended in its report that the number of TENs should be increased to 15 in any one year,[74] a recommendation which has not been implemented by the Government. We believe that the time is right for a modest increase in the number of TENs which can be applied for and a relaxation of the number which can be applied for per person. We are satisfied that, when taken in conjunction with our recommendations above concerning improving the objection process, an increase in the number of TENs per year and the number which an individual can apply for to 15 provides a reasonable balance between meeting the needs of those who use TENs and protecting the public.

COST OF APPLYING FOR A TEN

56. A large proportion of TENs are applied for by voluntary, community and not-for-profit groups. We have received written evidence from individuals involved in such groups who are concerned that the increase in costs has led to a reduction in the number of community events.[75] Previously it would have been possible for these groups to have applied for 12 occasional permissions to stage licensable events at a total cost of £10; the TENs system costs £21 for each event, £252 if the maximum of 12 events are applied for in a year, representing a more than 200% increase. We recommend that the Government should consider implementing a reduction in the cost of applying for a TEN in order to lessen the burden on voluntary, community and not-for-profit groups.

5 Ev 140 Back

6 Ev 74 Back

7 Ev 1 Back

8 Ev 35 Back

9 Ev 36 Back

10 Q41 ff. Back

11 Department for Culture, Media and Sport, Guidance issued under Section 182 of the Licensing Act 2003, 28 June 2007, paragraph 8.25 Back

12 Ev 156 Back

13 HC Deb, 16 June 2003, col 169 Back

14 Q329 Back

15 Q116 Back

16 Ev 76 Back