Next steps
27. The local authorities set out as licensing
authorities in this Order must now make the opportunity of obtaining
the licence open to all operators. If there is more than one proposal
that satisfies the regulatory requirements set out in the Act,
then the local authority is required to run the second stage of
the process as a competition. Paragraph 5(3)(a) of Schedule 9
to the Act requires the authority "to determine which of
the competing applications would, in the authority's opinion,
be likely if granted to result in the greatest benefit to the
authority's area", although what the criteria are for determining
"the greatest benefit", have not yet been decided[5].The
chosen operator will also need to have an operating licence and
planning permission and the Statement notes that "the fact
that an applicant's proposal may be the preferred option in the
competition will not guarantee planning permission." (paragraph
22).
28. We also sought clarification of how the competition
for the licence could be fair, when some authorities have already
identified a preferred operator; for example in Southampton City
Council's written evidence they state that their initial submission
was subsidised by an interested operator which commissioned £35,000
of information and data for them[6].
Professor Crow said that the Panel had deliberately not considered
this, as they regarded it a matter for the next stage of licensing.
The Minister said Paragraph 2 of Schedule 9 to the Act says licensing
authorities must comply with regulations about inviting competing
applications and the Secretary of State has written to the local
authorities to remind them of their obligations under the Act[7].(Q89
&94).
29. For us, the key question was whether the
authorities which are about to be allowed to issue licences are
restricted to the site proposed in their bid or to the whole area
of their authority. The Minister confirmed that the law allows
the local authority to determine the most appropriate site anywhere
within their jurisdiction: "That is entirely a matter for
the local authority. It is the local authority that now has the
licence, not a particular site."(Q96)
30. For some authorities this is a logical consequence
to their bid, they offered a range of sites and will now select
the best of them. However for the proposed regional casino, the
Committee had concerns that this flexibility has the potential
to undermine the premise on which the bid was selected:
Baroness Thomas of Winchester: So
Manchester might decide that it does not want the site to be in
East Manchester? It might want it to be somewhere else in Manchester.
Mr Caborn: Absolutely.
That is a discussion that the local authority will have (Q97).
31. When asked whether this was an error on the
part of the Panel who had made it clear to us, both in their Report
and in Professor Crow's oral evidence, that the location of East
Manchester influenced their decision in favour of Manchester.
Mr Caborn replied: "All I can say is that that is not what
the Act says. The Panel knew exactly what the Act was saying and
when they gave that licence out, that was a licence to the local
authority, that local planning authority, not an individual site."
(Q100)
32. When a licence application is being considered,
the premises licence procedure allows for interested parties,
including local residents and businesses, to express views against
the licence. We asked how this consultation could be genuine,
given that each local authority has invested heavily in its proposal.
We also asked how sure the authority could be of local support
as the Panel had described the bidders' approach to consultation
with local people as "unexpectedly patchy" (the Panel's
Report paragraph 106)(Q35).
33. We asked the Minister what the fall back
position was in relation to the allocation of licences. For example,
if a proposal failed to meet the licensing criteria, or if a local
authority withdrew its bid, would a new location be chosen for
such a licence; and, if so, how? The Minister said he had not
thought about this (Q107) although his further memorandum goes
into more detail[8].
34. We asked under what circumstances a licence
might be revoked: might this be done if a casino only generated
half the jobs set out in the original bid? The Minister said this
would be a matter for the Gambling Commission who could impose
sanctions if the enterprise did not comply with the conditions
of its operating licence. Other evidence of success or failure
would come from the various evaluation projects set in train (Q108-9).
The Secretary of State may change the maximum number of available
licences, again by order subject to affirmative resolution, but
this is not likely to happen for 8-10 years (Q111-113).
Conclusion
35. We considered the policy objectives of this
Order on two levels: first its compliance with the licensing objectives
set out on the face of the Gambling Act 2005 which require the
prevention of harm from gambling; and secondly, whether the 17
authorities selected, if allowed to license a casino, would offer
"the best possible test of social impact".
36. It is clear from the evidence sessions that,
although aware of the concerns of the Joint Committee and others,
the Panel's interpretation of their sift criteria did not give
high priority to the prevention of harmful effects to the community
from gambling. The Minister stated that this objective was implicit
in the Panel's terms of reference (Q81) and would in any event
be addressed in the next stages of the process when the local
authority considered applications for planning permission and
the Gambling Commission considered applications for an operator's
licence (Q82). The evidence session clarified the Panel's interpretation
of the criteria it had been given and their 17 recommendations
flow from that. Whether the Panel's interpretation of their terms
of reference matches that of the Government, and the degree to
which the terms of reference reflect the statutory licensing objectives,
is an issue of public policy likely to be of interest to the House.
37. In relation to the "best possible test
of social impact", Professor Crow emphasised that the key
element in their selection process had been the "traceability"
of the effects of placing a casino in this or that location. The
Minister made it clear that the list of 17 comprised a structured
sample for testing the social impact and that Parliament must
accept or reject it in its entirety (Q 79).
38. This Order would permit each of the named
local authorities to issue one casino licence. If, in the course
of the competition they must hold, an operator with a viable proposal
offers the local authority sufficient incentives (of the type
permitted under Schedule 9 to the Act) to convince it that the
"greatest benefit" to the authority's area would be
obtained from a casino sited somewhere other than the site put
forward in the bid assessed by the Panel, then the authority is
free to, and may be obliged by law to, grant the licence to that
location. Although apparently aware of this when making its recommendations,
the Panel seems to have been strongly influenced by some bids
attached to specific sites, for example Wolverhampton or Solihull.
39. In the Panel's recommendation for the regional
casino licence the specific location appears fundamental. The
Panel's Final Report says "Although Greater Manchester demographics
are close to the national profile, it would not be easy to trace
the city-wide social impact of the proposal against the background
of many other factors in such a large city region. This would
be less true, however, of East Manchester, where it would be relatively
easy to adduce impacts, favourable and unfavourable, in this very
deprived sector of the city." (paragraph 178). The Government
deliberately set the "best possible test of social impact"
as the Panel's primary objective. We have heard in evidence that
the Panel gave great weight to traceability of social impact in
making its selections and that this significantly affected its
recommendations, ruling out some locations where it felt it might
be more difficult to trace the impacts as compared to others.
We note however that the regional casino may not however be located
in the same location within the licensing authority as proposed
in the bid to the Panel (and thus where the Panel considered the
best possible test of social impact could be assessed) because
the next stage of the process requires an open competition amongst
potential operators and each successful authority may award the
licence to any site within its area. We therefore draw this Order
to the special attention of the House on the ground that it may
imperfectly achieve its policy objective.
1 Session 2003-04, HL Paper 146, paragraphs 68-9 and
82-85. Back
2
www.culture.gov.uk/cap/publications/finalreportcap_300107.pdf. Back
3
Session 2003-04, HL Paper 146, paragraphs 84-85. Back
4
HL Paper 67-II, pages 48-9. Back
5
The Minister's further memorandum (printed at Appendix 5) states
that draft guidance has recently been issued for consultation. Back
6
HL Paper 67-II, page 113 Back
7
The Minister's further memorandum (printed at Appendix 5) addresses
this in more detail. Back
8
Appendix 5. Back
