Supplementary memorandum from the Local
Government Association (DCH 335)
INTRODUCTION
While the Local Government Association (LGA)
supports the proposal for a fair and consistent charitable collections
licensing system, we challenge the view that the new regime will
be "cost neutral". This is because the Regulatory Impact
Assessment (RIA) omits some of the new burdens completely and
admits that the Home Office has limited information about local
authority (LA) costs.
The LGA believes that the proposals place a
financial burden on LAs for the reasons set out below. The Association
acknowledges that we have had similar difficulties to the Home
Office in providing detailed financial information. This is because
currently the function is not sufficiently large, and has no income
stream, to warrant separate accounting. We would therefore urge
the Home Office to ensure that a proper analysis of the costs
to LAs is carried out so that, in the absence of a licence fee,
sufficient funding is made available for start up and running
costs to ensure maintained confidence in public collections. We
would be happy to assist the Home Office in that piece of work.
The LGA believes that the decision making process
for collection permits and certificates of fitness should be transparent,
satisfy the rules of natural justice and that there are a number
of ways in which the process can provide opportunities for meaningful
input from applicants and other interested parties. However, councils
must be able to make decisions in the best interests of the community
and sometimes this will not be to the satisfaction of the applicant.
COSTS OF
THE PROPOSED
CHARITABLE COLLECTIONS
LICENSING SYSTEM
Why the new system will cost local authorities
more
1. The current legislation is adoptive and
does not apply at all to London Boroughs. The proposed system
is prescriptive and covers all of England and Wales.
2. There will be an increase in the number
of applications to be processed, as acknowledged in the RIA, as
the definition of licensable collections will be extended to include
collections on certain private land and face-to-face fundraising.
Some small authorities already report 200 face-to-face collections
every year; this signifies a significant increased burden for
LAs.
3. A duty will be placed on all LAs to provide
fair access to collecting opportunities to eligible organisations;
this will require the development of a local licensing policy.
The RIA is silent as to the cost of this requirement. Our members'
experience, in relation to developing licensing polices for alcohol/entertainment
and taxis, is that this process involves research and consultation
at no little cost.
For example, the elements of the policy that
identify local capacity will have to consider such matters as
demographics, economic indicators, footfall, width of pavement
etc, which would need research to provide supporting evidence.
Currently a survey of unmet demand in relation to taxi licensing
costs around £15,000. Across the 376 licensing authorities
in England and Wales this would mean a total of over £5,500,000.
In developing policy LAs are expected to comply
with Cabinet Office guidance that requires 12 weeks' consultation
across the community and with all interested parties. The average
estimated cost of developing a policy under the Licensing Act
2003 is over £27,000; totalling around £6,870,000 across
the 376 licensing authorities in England and Wales. These are
not insignificant costs and the marginal savings from streamlining
of the application process cannot be said to cover these new requirements.
While it is accepted that a policy is a useful
tool in determining licence applications, it is felt that the
issue is not complicated for all authorities and that there should
not be a requirement to produce such a policy unless local circumstances
warranted such an approach. This would reduce the burden on small
authorities.
4. The Bill introduces a new process to
be carried out by LAs for organisations wishing to carry out collections
in more than one area. The "home" authority, described
as the authority where the address registered with the Charity
Commission is situated, will issue a certificate of fitness following
checks on the background of the applicant and the governance of
the collection process. The certificate will then be presented
to each authority where a collection permit is required.
While currently 43 organisations benefit from
a Home Office exemption, potentially many of the 187,316 charities
on the Charity Commission's Register could avail of the new freedoms
for multi site local, regional or national collections. Additionally,
given the likelihood that many of these organisations' addresses
will be in London, this new process presents an undue burden on
a small group of authorities, which again is not recognised in
the RIA.
5. There is an expectation of a "swift,
effective" enforcement against unlicensed collections to
deter bogus collections and prevent nuisance to the public. The
RIA identifies the main risk that the scheme is designed to guard
against as "the possibility of a depression of collection
revenues through a decline in public trust and confidence in public
collections".
The Committee has already heard from Leeds City
Council as to the extent of the problem of bogus collecting which
has resulted in 48 prosecutions in that area alone. In Leeds in
2003-04, the total enforcement costs for house-to-house, street
collections and prosecution work came to £32,000 and involved
three officers. The cost of public confidence in the system cannot
be underestimated and without adequate funding LAs simply will
not be able to carry out the enforcement role.
6. The Government intends to publish guidance
for LAs on the operation of the new scheme. While LAs may depart
from such guidance should local circumstances require, the extent
of the guidance, as outlined by the Home Office, suggests a level
of prescription that undermines local discretion while placing
further burdens on licensing authorities. For example, the Home
Office is considering guidance on such matters as how LAs might
ensure that collections do not constitute a public nuisance, what
checks LAs should make on the eligibility of applicants and what
arrangements should be put in place to provide effective liaison
between with other bodies, such as the police and the Charity
Commission.
7. Councils will be notified of all collections
even if not subject to the licensing regime and it will be an
offence to organise a collection without notifying the LA about
it. This will require authorities to record and monitor activities
and take action where necessary.
OUTLINE OF
COSTS TO
BE INCURRED
Identified below are the kinds of costs that
will be incurred in preparing for and implementing the new system,
which are themselves subject to regional variation. The scale
of costs will be dictated by the level of activity across the
administration, monitoring and enforcement functions according
to local needs:
— Licensing policy development—research,
consultation, publication, distribution;
— Establishment and support of liaison
arrangements;
— Recruitment of additional staff;
— Training of new and existing staff.
— Dedicated staff—salary, pension,
overtime, car and travel, training, mobile phones;
— Overheads—office costs, furniture,
IT soft/hardware, printing, stationery, publications, advertising,
telephone;
— Corporate services—HR, finance,
IT, press etc.
(c) Level of LA activity:
— Administration—reactive, except
policy review;
— Monitoring—risk rated programme
with reactive element;
— Enforcement—risk rated programme
with reactive element.
CONCLUSION
The draft Charities Bill presents an opportunity
to consolidate and improve consistency in the licensing of charitable
collections. In order to retain public trust and confidence in
such collections there must be a properly funded administration,
monitoring and enforcement regime. The LGA believes that the only
way to ensure that all LAs costs are met is for a locally set
fee to be paid by the collection organiser. The fee would be set
in line with central guidance, at a level to recoup the costs
of administration, monitoring and enforcement but could be waived
at the discretion of the LA.
Charities currently pay fees for entertainment,
lotteries and amusements licences; many charities employ professional
fundraisers and have significant administrative overheads; the
cost of a license would be a legitimate business expense. The
absence of adequate funding from the Home Office will effectively
mean that local residents are taxed to fund causes they may not
support.
ARBITRATION OR
APPEAL MECHANISMS
The LGA believes that the decision making process
for collection permits and certificates of fitness should be transparent
and satisfy the rules of natural justice. There are a number of
ways in which the process can provide opportunities for meaningful
input from applicants and other interested parties. Firstly, the
local licensing policy, developed in consultation, will provide
information about the criteria and framework for decision making.
Second, some authorities will delegate this function to the council's
licensing committee which will provide a quasi-judicial hearing
in contested cases, and the LGA suggests that mechanisms developed
as part of the Local Compact should be considered in this role.
Councils must be able to make decisions in the
best interests of the community and sometimes this will not be
to the satisfaction of the applicant. Recourse to an independent
tribunal, be it by way of Judicial Review or appeal to the Magistrates'
Court, will enable the legislation to develop by way of case law
and improve consistency in its application. There will, of course,
be cost implications for both parties in this approach and it
is hoped that this will be reserved for the most difficult cases.
July 2004
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