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

Examination of Witnesses (Questions 120 - 139)



  Q120  Mr Evans: My next question was going to be about the fee increase which is proposed. As you know, Sir Les Elton has recommended a 7% increase per year for three years, which would be dramatic; so I think the question is redundant to be frank.

  Mrs Simmonds: Can I just say, to do the sums on that, that if you had 10,000 premises you are talking about an increase of £160,000. That is an inordinate amount of money for a sports or any other club which is providing effectively very much a social service which, in our current climate, the need we have connectivity at that local level, is the service that we are providing here.

  Q121  Chairman: Brigid, do you accept the principle that the fees paid by the whole estate should meet the costs? In other words, you would adjust the structure of the fees so that amateur sports clubs did not have to pay so much, but another part—maybe bigger establishments—would have to pay more to compensate?

  Mrs Simmonds: I would write off the costs of introducing the Licensing Act because that is where the local authorities saw this great increase in costs—taking on from 155,000 licences from magistrates was a big undertaking. Now what we are talking is ongoing reviews, looking at risk registers, a certain amount of inspection and I think it is that bit that should be based on a smaller amount and less fees for clubs.

  Q122  Mr Evans: I want to scratch the surface now as to the impact that this is having—the new charges, the new licence applications, the time it takes to apply and all that sort of stuff, as compared to the old system, so that we know the full impact that this new regime is now having on clubs.

  Mrs Simmonds: We have this annual fee situation, so you have that. You then have applications in some cases for Temporary Event Notices. One of the problems that clubs have, particularly if they are weather-affected, is how do you apply 10 days in advance for a Temporary Event Notice if you are affected by the tide or the weather as to whether the event is going to go ahead at all? That is something by which sport is particularly afflicted. If you are a sailing club and you have to wait for the tide on a particular day then it is quite difficult to predict in advance whether it is going to be on this day or that day. So that system is quite complicated. The other problem we have is that if you make any variations at all you have to reapply; you have to reapply for your variation. It is dependent very much on your size but let us say it is £190 if you fall into category B for your variation, you have to re-advertise in the newspaper and you have to have your plans redrawn and re-submitted. So those are the sorts of burdens that I think sports clubs bear.

  Mr Smyth: Exactly the same for us—exactly. One thing about the Temporary Event Notices that I have never understood ever since the Act came out, the maximum you can have is 12 but one club official—shall we say the Secretary—can only apply for five and then perhaps the Treasurer has to apply for another five and the President for another two, and that all struck me as absolutely irrational. I still cannot understand why that happened.

  Q123  Mr Evans: Is this Temporary Event Licence just a figure plucked out of the air? Does it bear any resemblance to anything or do you think that for most clubs 12 is probably okay?

  Mr Smyth: No, we would prefer perhaps a figure of 20, something like that.

  Q124  Mr Evans: But you have just plucked that figure out of the air too.

  Mr Smyth: I have but I know that a number of clubs say that 12 is not enough. Barry obviously is a Secretary of a club.

  Mr Slasberg: For my own club we, I must admit, do try and ensure that we do not open to the public at all. We are very jealous of our private status and therefore we do not encourage public events. However, for many of the clubs in my area they do have a problem; you have to get people in and the Temporary Event Notice is a very useful tool to have. Yes, it would be helpful to a lot of clubs if they could have more than 12 in a year, simply on a survival basis because we are in recession, as you all know—talking of the club world—and what we all need to do is to be able to innovate. Innovate means trying new things and trying new things can be very difficult if you have a club premises certificate that is limited, and if you want to try something new you do not know if it is going to work and you have to go through all the rigmarole of getting permissions and then you might want to drop it after three months because you have had your trial and it does not work. Another thing that has come up—certainly with my club we have excellent relationships with our neighbours, we have excellent relationships with all the authorities but as soon as you put something on a lamppost that says "If you have any problems please put them forward to the local council" they come out of the woodwork. Certainly my club, when we went through this procedure, had a load of complaints. I spoke to all the complainants individually and said, "Why have you never come to the club?—We never thought we could." So this, quite honestly, although it is a good thing to allow people to make complaints, does encourage people out of the woodwork who have no basis of complaint and waste both the time of the officials and of the club and cause a lot of sleeplessness.

  Q125  Mr Evans: So the figure of 12 should be scrapped and it should be dramatically increased. Indeed, do you think there should be any limit?

  Mr Smyth: I think we probably need a limit because otherwise it may not be a private members' club any more and that obviously is what we are all here to protect. So I am not saying dramatically increase but 20 would be a lot better than 12.

  Q126  Chairman: But most of your clubs have premises' licences.

  Mr Smyth: No.

  Q127  Chairman: They do not?

  Mr Smyth: Very few; very, very few.

  Mrs Simmonds: That is not true for sports clubs because sports clubs do have Club Premises Licences.

  Q128  Chairman: So working men's clubs are operating on the Temporary Event Notice?

  Mr Smyth: Yes, they have the CPC and then they have the Temporary Event Notices, yes. There are probably less than 20 out of 2000.

  Q129  Chairman: Following up Nigel's question. Brigid you and indeed the Registered Club Associations have both made the point that as well as the fee which you have to pay there are a whole lot of other costs in terms of advertising, in terms of notification, in terms of maybe getting plans drawn up. What estimate have you made of the total cost of going through the licensing procedure?

  Mrs Simmonds: I am not particularly keen to be retrospective on this. I could give you lots of costs of what it costs in the first place but it is now that we are talking about—these ongoing costs of dealing with all these things. There is no evidence that advertising in local newspapers actually does anything at all and that it is read by anybody. I have always thought that that should be scrapped and in the early days when the Better Regulation Commission reviewed the Licensing Act it suggested it should be scrapped, but it is not part of the de minimis or the changes that are being proposed by DCMS at the moment.

  Q130  Mr Evans: But if you scrap it how would you inform the public?

  Mrs Simmonds: You have to put a notice on the posters anyway and you have to put notices around—it is like planning permission—so for those people who are in the vicinity of your area that is a perfectly good way of doing it and, if necessary, put notices in your public library. But advertising is hugely costly; in London you are only talking realistically at advertising in the Evening Standard and so you are talking about a lot of money and then if you then have to go out and have professional help, as a lot of these clubs have had to do, then that increases your cost enormously if you have to have plans drawn up of your premises and where the bars are and if you want to make changes. In the case of sport obviously quite a lot of the whole of the sports area would be licensed—it would not only be just necessarily a bar. So every time you have to go back to the licensing authorities—the system is mad. We would very much welcome the minor variation to the procedures and obviously that would reduce the cost and that is one of the proposals, and under minor variations you would not be required to advertise for a minor variation. But taking away advertising would be helpful.

  Mr Smyth: Of course, it was rather ironic that once the Act was actually proposed and just before it came into effect suddenly all the local provincial papers' advertising rates went up about 200% because they could see that this was a place where they could make money, and that cost clubs more than they anticipated and wanted to pay, obviously.

  Chairman: It is the case that local newspapers are in some financial difficulties and I think that they would be extremely alarmed at seeing this sort of revenue also disappearing. However, I agree that you are not there to keep local newspapers in business. Adrian Sanders.

  Q131  Mr Sanders: There is also an issue that not everybody is necessarily going to be walking around and seeing notices and I think it is absolutely right that it should be advertised to a wider audience—they have a right to know. Just as with planning applications they are not just posted up on the lamp post, they also have to be advertised in local newspapers. I just wonder why you think it should be different.

  Mrs Simmonds: I was not aware that planning applications had to be advertised in local newspapers but you certainly get notices and you get letters from the local authority and that might be a simpler way of doing it—you get a letter saying, "This is being considered next door and you have the opportunity to comment on it." There is no reason why a system like that could not be introduced for licensing.

  Q132  Mr Sanders: That would be helpful; I would agree with you there. We have a difficulty in that DCMS maintains that no new or additional evidence has been presented since it received the Final Report of the Independent Fees Review Panel to indicate that the Act has had a detrimental financial impact on sports and social clubs. So is there any fresh evidence, a body of evidence, a report or something that could be made available?

  Mrs Simmonds: We work very closely with DCMS, as the Committee is probably aware, particularly to promote the Community Amateur Sports Club scheme, and we did a survey of all clubs last year which found that 51% of them were either running at a loss or just about breaking even. DCMS have those figures and, as you know, they have been working with us and the Treasury to try and enhance the Community Amateur Sports Club scheme and we will be looking at whether we can introduce gift aid on junior subscriptions, which is something that we very much want. And in many cases they have supported us when extra burdens are added to clubs because it is not only the Licensing Act, just to look at some of the ones that we are facing at the moment. We have drainage where they are trying to move from a system which was based on rateable value to the whole size of the area—this was raised by the Liberal Democrats in the House—and it could be a 318% increase for clubs in those sorts of costs, which would cost £10 million a year. We have CIL, the Community Infrastructure Levy. At the moment all these questions that are being asked in the House suggest that sport is going to have to pay CIL, which I think is again absolutely mad. Not for profit organisations, they may exempt charities on the front of the Act but that of course will not count for either social clubs or for sports clubs even though they are not for profit. Music—we have licences for composers, £370 a year; PPL £116 a year for publishing. It is cumulative; it is not only the cost of the Licensing Act but DCMS have plenty of evidence which makes it absolutely clear that community sport needs some help, and in straightforward government terms if we are going to introduce this Five Hour Offer for sport in schools then you need help from clubs. We cannot achieve that within the curriculum, so there is a real advantage in helping community sports clubs which, exactly like Kevin's clubs, are run, on the whole, by volunteers.

  Q133  Mr Sanders: Are you aware of any work being undertaken in that area—contact between DCMS and representative bodies—to see how the voluntary clubs can help government deliver that sports target?

  Mrs Simmonds: The Government is helping us very much with talking to the Treasury about this in terms of a gift aid scheme on junior subscriptions—they have done a lot of work there. We would like to have more contact, probably with the Cabinet Office, which is responsible for the sector. There are a lot of very good words talked about it but in this economic situation in which we are in, the cost of gift aid would probably only be about £4 million; so we are hoping that the government might consider that. Some of the other costs are greater. As ever, it is the burden placed on clubs by other government departments which you then have to pick up and run with. We would be delighted if someone would take up this drainage scheme problem that we have because that will be an ongoing, huge burden, particularly on sport because and all the pitches that we support.

  Q134  Chairman: What do the Registered Club Associations think?

  Mr Smyth: We obviously have not got into discussion on the same lines as the sports community because they provide sporting activities for youngsters, which we do not do to anywhere near the same extent. We do obviously have junior football teams and that sort of thing, representing a number of clubs—I can remember that Barry's team actually won a trophy only last year. It is, as Brigid said, cumulative. I know it is not your responsibility but the Gambling Act came up with something whereby—

  Q135  Chairman: It is actually!

  Mr Smyth: With gambling, if you are a club that plays bingo over so much then all of a sudden you are faced with a £2000 fee per year and that is going up by another £400 this year. It all builds up and up and up. Brigid said she had 51% of her clubs that were running at a loss or just about breaking even. 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. I had one yesterday from the Liberal Club on the Isle of Wight, "We are very sorry to say that after 105 years of existence we just cannot afford to go on."

  Q136  Chairman: I should have perhaps also added at the beginning that I am a patron of the Maldon Constitutional Club and they are finding life very difficult from a variety of different pressures—obviously the economic recession, compounded by the smoking ban, which has had a very damaging effect. So do you have any idea as to the numbers of clubs that are going out of business because of all these pressures?

  Mr Smyth: Last year and for previous years we have lost about 50, so I am not going to say it has suddenly happened—it has been a steady drip of perhaps losing 50 clubs. But purely in my organisation, which is the working men's clubs, I anticipate about 150 not paying their fee and if they do not pay their fee then within two or three months that is a sign that they will not be in existence; so it has tripled.

  Q137  Chairman: Amongst all these different pressures how significant do you think are the additional costs resulting from the Licensing Act?

  Mr Smyth: It adds up. Yes, it is not as great as the smoking ban but again it all accumulates and eventually you are at the top of the cliff.

  Mrs Simmonds: I think the licensing fees are a significant part of that—moving from £16 to £200 and something is huge.

  Mr Slasberg: If I may, for me, I think there is a great change that I have seen over the years in that our clubs have always been recognised as non-profit making and serving the community. More and more as legislation goes through we are being put on an even playing field with commercial business, and I think that is what is killing us, quite honestly. We provide alcohol but whatever comes out of that goes to our members, it is purely for them, whereas a pub is in there for profit and nothing else. It is almost like saying that the table tennis league should play the same rules as the rugby league because they are both sports. It is a nonsense and it is a nonsense that non-profit making clubs should be treated in the same way as profit-making licensed premises because they are a wholly different animal, which used to be recognised but more and more, I feel, is not being recognised, and that is one of the major planks which is putting our clubs, which are community based and are there serving the community, very much at risk, I believe.

  Q138  Chairman: Can I just explore that with you? The CCPR will make the case—indeed have made the case—that sports clubs are delivering government objectives, which is healthy living and increasing sports participation, and generally are of huge benefit to the community and they need on licence sales to support them. The working men's clubs are not able to make quite the same claims in terms of overall benefit, are they?

  Mr Slasberg: I believe that the working men's clubs can put forward a very great claim for work within their communities. For instance, we have a brain damaged group that use our club; we have kidney patients who use our club, and anybody else can come in. We also provide facilities for families, a safe haven that they can come to because of our policing of the use of alcohol. I am not saying that nobody gets drunk in a working men's club but because of our policing and requirement for reasonable behaviour and the threat of expulsion for bad behaviour these things mean a lot, because we have generations of people coming to the same club. So whilst people are being put out of work they do have somewhere to go where they can have refreshment and have it cheaply; they can just watch TV and have a glass of water if they want—they are not obliged to buy within the club. So people can get out of their home environment, out of the stress of their own financial burdens into somewhere where they can communicate with each other and just relax. It is not the fantastic image of the sports clubs, I will give you that, but it is a vital and very urgent need that our clubs are maintained because we are the centre of the community and if you lose that then where do people who are stressed, distressed and poor safely go? I do not think there are many places that are around nowadays that they can use.

  Mrs Simmonds: Just to finalise that discussion, the impact of the licensing cost increases is the same as 10 adult average club memberships. The average rugby club has 80 adults, so this equates to a 12% reduction.

  Q139  Alan Keen: I do not want to get too far away from the actual licensing itself but you have been talking about the situation overall and even before the credit problems that we are getting now, licensed premises—whether clubs or pubs—have been facing difficulties because of the smoking ban and that sort of thing. Are the breweries any less helpful to clubs than they used to be because their own premises are struggling? Have you noticed any difference?

  Mr Slasberg: I think breweries are beginning to fight for the business now because they are definitely out for survival themselves. Having said that, the majority of our clubs are run by amateurs—they are run by working men and working women with not necessarily a lot of professional expertise. The breweries are out to make money and they will help if you go to them but some people just do not know how far they can go to them. We are not professionally run, although we do have some support from our head office—we do have training programmes that people can go on—but you put a sales executive from a big brewery up against a clothes salesman from one of the local stores and that rep is going to have a much more likely chance of coming out on top of his argument at the end of the day. Countering that slightly, the breweries do want places to stay open because they want to sell their beer, but they want to get the most out of them and I do not think that we have the expertise to get the most out of the breweries sometimes.

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