Chapter 10: The Night-Time Economy
Introduction
437.Over the past few decades many UK cities have seen considerable growth in the night-time economy (NTE)—businesses and industries that stay open late into the night and early in the morning. Following the Licensing Act’s liberalisation of 24-hour licences, the licensed trade has accounted for a large share of this growth. According to the Department for Communities and Local Government, the NTE today accounts for 10–16% of UK town centre employment (and an even higher proportion in London), and contributed over £1 billion in business rates in 2013/14.401 The Night Time Industries Association, a recently formed industry group representing the NTE, has claimed that the NTE as a whole is worth £66 billion.402
438.One innovation contained within the Act, and one of the most controversial at the time of its enactment, was a provision allowing premises to apply for 24-hour alcohol licences. While the development of the NTE was certainly influenced by this legislative shift, it is clear that the 24-hour licence is a relatively minor phenomenon—in March 2016, there were only around 8,300403 24-hour licences (representing 3.95% of all premises licences). Of these, the great majority (74%) were held by supermarkets or hotel bars, with only 900 (11%) held by pubs, bars and nightclubs. The majority of on-trade licensees who wished to extend their businesses into the NTE have chosen instead to apply for more moderate extensions to their terminal hours. While records are not routinely kept as to the number of late-opening licences, as opposed to 24-hour licences, research conducted by the Department for Culture, Media and Sport in 2007 showed that on average, on-licensed premises had extended their opening hours by 21 minutes.404
439.There was a considerable divergence in opinion among respondents as to the opportunities and challenges associated with the NTE. Despite the growth in the NTE in many of the UK’s largest towns and cities, many witnesses representing the licensed trade believed that the NTE was being stymied by a range of factors. Fabric Life Limited, who run the Fabric nightclub in central London, pointed to the halving of nightclubs across London in the past decade as a reason to be concerned for the capital’s NTE. They told us that:
“there is an increasing perception in the night time industry that Police are seeking a diminution in the number of venues, and particularly nightclubs, not because closure of the venues is genuinely necessary but as an answer to their diminishing resources. Further, this perception is leading, and will continue to lead, to an unwillingness to invest, and reinvest, in nightclubs so hastening their demise.”405
440.The Heart of London Business Alliance similarly believed that over-zealous regulation, and an unwillingness on the part of licensing authorities to respect the liberalising aspects of the Act, threatened to harm the NTE. They argued that “if new licences are blocked and little flexibility is shown when determining amendment applications, the evening and late night economy will fail to keep pace with the demands of our global, 24 hour city in the medium term.” They were similarly critical of what they saw as a tendency by local authorities to focus overly on the negative aspects of the NTE, such as crime, disorder and nuisance.406
441.However, local residents that we heard from were critical of the NTE, and believed far more needed to be done to regulate and manage its impact on residents. One residents’ association in north London reported that:
“… the effect of this Night-Time Economy (NTE) on residents has been catastrophic for those living near the main road and in the two roads used by late-night revellers to make their way home or to the overground railway. On summer nights in particular, residents suffer from the noise of shouting and swearing, banging of car doors and loudly playing car radios, urination and vomiting in the street (and front gardens). Often, after closing time, the party is continued on the pavement outside residents’ houses. Residents who can, have moved to a room in the back of their houses; others have installed double glazing. Neither solution is completely successful in cutting out the noise of the revellers.”407
442.In particular, they and others argued there was insufficient funding and infrastructure available for handling the NTE and for mitigating its impact on residents. The same residents’ association noted that “since the 2003 Licensing Act, the NTE has grown exponentially, but the infrastructure needed to contain it—policing, street cleaning, lavatory facilities, monitoring and decision-making by the Council—has remained virtually unchanged.” They felt that, while “huge sums accrue to the venues, the financial burden lies with the Councils and the NHS”.408
443.While measures like the Late Night Levy409 had been a “first step to correct the balance”, fundamentally, underfunded local councils could not be expected to support and promote the late night economy.410 Indeed, many respondents were highly critical of the Licensing Act 2003’s provisions for 24-hour licences, and believed a reversion to blanket closing times should be considered. As one councillor from Bristol put it, “the Licensing Act 2003 seemingly ignored the costs of enforcement, harm and tidying up. In these times of austerity, society can’t afford the luxury of the 2003 Act.”411
444.We have considered a range of measures aimed both at promoting the NTE and at mitigating and regulating some of its more harmful aspects. These include night czars, the recently opened Night Tube in London, as well as measures such as the Late Night Levy and Early Morning Restriction Orders, which have respectively aimed to tax and curtail the NTE in places where it has generated problems.
Night Czars and Night Mayors
445.In 2014 Amsterdam created the first ‘night mayor’, a role which involves managing and improving relations between businesses in the NTE, local authorities and local residents. Since then Paris, Toulouse and Zurich have implemented their own versions of this scheme, and in November 2016 the London Mayor’s Office appointed Amy Lamé as London’s ‘Night Czar’ to perform a similar role.
446.We were very keen to hear about Ms Lamé’s plans for the NTE of London, and indeed were assured a number of times by an official of the London Mayor’s Office that we would be able to question her on the subject. We regret that this appearance did not, however, materialise, and we received no evidence, in person or in writing, from the London Night Czar herself. After further correspondence with the Mayor’s Office, we received a response from the Mayor, Sadiq Khan, in which he noted that, as the Night Czar’s role “is part-time”, and due to a “long-standing and unavoidable commitment”, she could not attend to provide evidence on 6 December.412 We would like to place on record that we did provide the Night Czar with several possible dates on which she could have given evidence, which were all declined.
447.The Mayor’s letter also informed us of the forthcoming appointment of a Chair of London’s Night Time Commission. Philip Kolvin QC has now been appointed to this post, and we have been informed that he and the Night Czar will work “hand-in glove to support the development of London’s night time economy across all boroughs”.413 Mr Kolvin’s appointment unfortunately came too late for us to be able to take evidence from him in that capacity.
448.It remains unclear to us what distinction, if any, exists between these two roles. In written evidence subsequently received from the London Mayor’s Office, we were informed that “the Chair will develop and lead partnerships with key stakeholders at a London-wide level”, a role performed by Night Mayors in Amsterdam and elsewhere.414
449.Nevertheless, we were informed that together, the Night Czar and the Chair of the Night Time Commission will:
- “… work with the Mayor and his Deputy Mayors to ensure a well-planned and strategic approach as London develops into a genuine 24-hour city. They will ensure that all stakeholders have a strong voice in the development of policy for London’s night time economy …
- develop, promote and articulate a vision for London as a 24-hour city. They will publish a roadmap setting out how the vision will be implemented …
- create a better understanding across all sectors of the challenges and opportunities for London’s night time economy.”
450.We believe that the appointment of the Night Czar and other champions of the night time economy (NTE) has the potential to help develop London’s NTE and ease the inevitable tensions that arise between licensees, local authorities and local residents. We believe that greater transparency should be expected of these roles if they are to secure the co-operation and trust of key parties in London’s NTE. In time Night Mayors may also offer a model to other cities in the UK.
Early Morning Restriction Orders
451.Early Morning Restrictions Orders (EMROs) are powers brought in by the Police Reform and Social Responsibility Act 2011,415 allowing local authorities to issue a blanket ban on premises opening during a period beginning at or after midnight and ending at or before 6am. They can be applied on particular days of the week, or different time periods on different days of the week, and can be applied to the whole or any particular part of a local authority area.
452.The section 182 Guidance described their intention as addressing “recurring problems such as high levels of alcohol-related crime and disorder in specific areas at specific times; serious public nuisance; and other instances of alcohol-related anti-social behaviour which is not directly attributable to specific premises”.416 Although at least two proposals for EMROs have been made, in Hartlepool and Blackpool, both of these attempts failed, and so far no EMROs have been or are currently in operation.417
453.During our inquiry, no one we heard from believed EMROs were implementable in their current form, and while a minority of respondents believed that some form of EMRO-style power was still desirable, a substantial majority of respondents believed them to be fundamentally wrong in principle.
454.A relatively small minority of evidence we heard insisted that the basic assumption behind EMROs—that local authorities should be able to issue a blanket ban on early morning opening hours if they feel it necessary—was valid, and that it was primarily poor implementation of the policy, and the vehement opposition from industry, which had led to its failure.
455.The Alcohol Health Alliance felt that the lack of “a workable Early Morning Restriction Order” was a “clear strategic failing within the Act”, and that “restricting excessively late closing times is known to significantly reduce alcohol related crimes and associated police costs”. In their view there would be widespread demand from local authorities and police if a better policy was devised.418 Jon Foster of the Institute of Alcohol Studies struck a similar note when he argued that “police and local authorities are keen on having a lever they can realistically pull” to reduce early morning opening hours, but that the “the gap between legislation and implementation is huge”.419
456.Broxtowe Borough Council pointed to the fact that introducing an EMRO is a “long, drawn out process when action may be needed in a more prompt manner”, which could be off-putting to local authorities.420 Along with the Local Government Association, they suggested that the proposed Group Review Intervention Powers, should they be introduced, might be more effective, although as we have noted,421 these are not without their problems as well. The LGA also claimed that as matters currently stood, “the overall administrative burden is probably still less” for conducting multiple licence reviews against problem premises in an area than it was to introduce an EMRO, “with its requirement for a full hearing and the amount of information industry has shown itself willing to provide in those circumstances, which has swamped councils and limited their ability to effectively scrutinise for accuracy all the information available to them”.422
457.Several respondents noted that opposition to EMROs from industry, particularly when attempts were made to introduce them in Blackpool and Hartlepool, had dampened enthusiasm for further attempts elsewhere. Alcohol Research UK noted that the Association of Licensed Multiple Retailers (ALMR) had set up a “fighting fund to challenge any council that proposed introducing an EMRO, and after the successful high-profile challenges in Hartlepool and Blackpool, no further EMROs were introduced.” They suggested that this “demonstrated the extent to which trade actions at local level can derail policies established by central government, and follows an established historical trend”.423
458.Even Gerald Gouriet QC, who acted on behalf of the ALMR in opposing the introduction of an EMRO in Blackpool, believed that EMROs still had some potential, which had been “insufficiently recognised by local authorities”. This was, he noted, partly because Blackpool had seemed “tailor-made for an EMRO”, and the subsequent failure to introduce one there had “reverberated too strongly around the country”. He suggested that the main problems with EMROs in their current form were the “costs of consultation and subsequent hearings, together with fears as to appellate costs”, which had made local authorities “disinclined to take advantage of this useful tool”.424
459.However, the majority of respondents not only believed that EMROs were fundamentally unworkable, but also opposed their existence in principle. The staunchest opposition was voiced by representatives of licensed premises. Admiral Taverns, for example, stated emphatically that they did not believe them to be “fair and/or necessary”,425 and this view was shared by nearly all industry representatives. Reba Danson, of the Deltic Group of nightclubs, reflected the views of many in industry when she described them as part of a tendency to apply “a blanket ‘catch all’ approach rather than providing an effective and site specific licensing and police service”.426
460.The powers were also not popular among many local authorities and some police forces. Birmingham City Council reflected the views of many local authorities when they described EMROs as a “draconian measure [which] would blight a locality, identifying it as a place where crime and disorder were out of control”. Cheshire East Council explained that by closing all premises at a given time, the “financial risk” that EMROs posed to the late night economy and associated businesses “may be prohibitive”.427 They, like many other local authorities, believed there were “sufficient tools in the Licensing Act to deal with problem premises without resorting to having to apply early closing times to a group of premises”.428 Sussex Police noted that both EMROs and Late Night Levies “have negative connotations in dealing with late night issues, rather than a potential for a positive resolution”.429
461.Hackney Borough Council pointed out that before EMROs there had been the even more abortive Alcohol Disorder Zones, introduced by the Violent Crime Reduction Act 2006. While these had been brought into force in 2007, no council ever introduced one, and they were repealed by the Police Reform and Social Responsibility Act 2011. They believed that, as with Alcohol Disorder Zones, authorities would look for “more proportionate and pragmatic approaches to tackling problem areas”.430
462.When questioned about this, Sarah Newton MP replied that EMROs were still “quite a new measure”, but accepted that there “has not been a big uptake of them yet” and that there were “some issues around the practicalities” of implementing them. Nevertheless, she argued that the process for implementing them had been “streamlined”, and she hoped that “improvements to the process that we have put in by consulting licensing authorities will enable them to be used more often”. It was her understanding that “the aspects of the processes that were identified as problematic have been addressed”.431
463.As a result of a consultation process conducted by the Home Office on how to make EMROs more effective, the previous Government amended secondary legislation in October 2014 to allow paperwork to be provided in electronic format. Previously, licensing authorities were required to send by post paper copies of all representations made, to all those who made them, 10 days before an EMRO hearing. The amended regulations reduced the paperwork required for hearings by making electronic dissemination the default for EMROs.432 In October 2014 the Home Office also revised the section 182 Guidance to:
- include a process flow chart setting out the stages to implementing an EMRO;
- clarify circumstances where a proposed EMRO can be changed after consultation without re-consulting;
- expand on what areas could do before consulting, such as holding informal discussions with partners;
- provide more information on what sorts of evidence could be relevant in considering the introduction of an EMRO.433
464.However, given that more than two years have passed since these changes were made, and no further EMRO consultations have been attempted, it must be concluded that these changes have not been successful. While they are likely to make the process of implementing an EMRO easier, they do not address the fundamental issue that most councils appear not to want such draconian measures, and that they are fundamentally in opposition to the liberalising spirit of the Licensing Act.
465.All the evidence we have received has made clear that EMROs have proved impossible to implement, and may indeed prove harmful to any area in which they are implemented. The majority of local authorities we heard from were unenthusiastic towards them both in principle and in practice, and on the few occasions where they have been considered, they have subsequently been withdrawn under threat of legal challenge. The failure of their precursors, Alcohol Disorder Zones, suggests this approach may well be fundamentally unworkable in practice.
466.We believe it is appropriate that no Early Morning Restriction Orders have been introduced and we recommend that, in due course, the provisions on EMROs should be repealed.
The Night Tube in London
467.2016 saw the opening of the Night Tube service in London, with London Underground operating night-time services on Friday and Saturday nights on certain lines. This has significantly increased transport options to and from London’s licensed premises, and Transport for London recently estimated that it could add £360 million to London’s night time economy over the next 30 years.434
468.Several respondents argued that the developing Night Tube service should be reflected in licensing arrangements, with later operating hours for licensed premises. For example, Heart of London Business Alliance argued:
“With the arrival of the night tube on Fridays and Saturdays providing more effective transport, we believe there is greater scope for longer operating hours that recognise and support the late night economy”.435
469.Alan Miller, of the Night Time Industries Association, told us that the “the 24-hour Tube is an enormous contribution to London, and it will bring huge benefits.” In particular, he emphasised the Night Tube’s more efficient capacity for dispersing crowds throughout the night, as compared to night buses and taxis, which would bring advantages to late night revellers and local residents alike. Taking advantage of this, however, required a more open-minded approach to 24-hour licences:
“If authorities are minded to provide 24-hour licences, or tiered licensing, it can be commensurate with the way the night Tube works. You can have different operational times throughout the day and night … It provides a safe and sensible mechanism. Where there are questions about noise, dispersal is far quicker; people can be moved much quicker on the train and underground.”436
470.Peter Marks, CEO of the Deltic Group of nightclubs, broadly agreed with this, though he also noted that by boosting London’s NTE there was likely to be a knock-on impact on the night-time economies of nearby suburbs and towns, such as Uxbridge. He observed that:
“It has happened in Manchester. In effect, Manchester is like London; the centre of Manchester has trams running all night from all the surrounding towns, such as Rochdale, Bury, Eccles and Ashton-under-Lyne. Those towns have died. It is fantastic for Manchester city centre but bad for the areas around it. There will be some of that here, but I agree that on the whole it is a good thing, and it has certainly helped with dispersal and so on.”437
471.However the Covent Garden Community Association expressed concerns about the Night Tube, and believe it further justifies the need for stronger measures to address cumulative impact within the Licensing Act:
“We are also concerned about the impact of other changes in the environment on the ability of the Act to maintain the necessary balance. For example the introduction of the Night Tube in London may well have a very detrimental impact on the residential communities in the West End if the result is to encourage people to stay later and so allow the noise and anti-social behaviour to extend even further into the morning. This change, which is not controlled by the Licensing regime, could be a disaster for our area in terms of maintaining the balance we have managed to achieve so far. We believe that the ability to review licences based on their cumulative impact in an area needs to be considered as on option to address this type of issue”.438
472.While we acknowledge the concerns of local residents, we believe that overall the Night Tube is likely to have a positive impact for London’s late night licensed premises, their staff, and local residents. Not only will it provide a welcome boost to London’s night-time economy, which must be allowed to grow if London is to continue to prosper as a global city in the 21st century, but it may well also bring advantages for residents by dispersing crowds more effectively and efficiently.
Late Night Levies
473.The Late Night Levy (LNL) was introduced by the Police Reform and Social Responsibility Act 2011, and provides licensing authorities with the power to raise money from late-opening alcohol suppliers to go towards policing and managing the NTE. If a local authority chooses to introduce a LNL, it must be applied across the entire local authority area, although the local authority can choose the period between midnight and 6am to which it will apply. Although the fees are set nationally (see Table 1), the local authority may also choose to apply exemptions and reductions from a list set out by regulations.
474.Since their creation, only nine of 350 local authorities in England and Wales have introduced a LNL, while 13 others issued consultations about the introduction of a LNL, but did not subsequently introduce one. In January 2017 the London Borough of Tower Hamlets approved the implementation of a LNL, and this proposal is now undergoing a three-month public consultation, with the council proposing to bring it into force in June 2017.439
Rateable Value |
Annual Levy |
Cost per week |
|
Band A |
£299 |
£5.75 |
|
Band B |
£768 |
£14.76 |
|
Band C |
£1,259 |
£24.21 |
|
Band D |
£1,365* (£2,730) |
£26.25 (£52.50) |
|
Band E |
£1,493* (£4,440) |
£28.71 (£85.38) |
* Signifies premises which fall within x2 or x3 fee multipliers (see Chapter 12 for further details).
475.There was a greater diversity of opinion as to the merits of LNLs as compared with EMROs. Many industry and business interests have opposed them in principle, as additional taxes levied unfairly on often already struggling businesses. For example, Admiral Taverns told us that LNLs “fail to allocate responsibility for poorly managed premises and impose a disproportionate cost burden on well-run small businesses for what may be a desire to have just an extra half hour’s trading time beyond midnight”.440They went on to argue that:
“LNLs are simply another direct tax on small local businesses who have little choice but to pay approximately £700 or risk losing trade and regular custom by cutting back their hours. By comparison to the cost of a premises licence on many small pubs of £180 that cost is disproportionate. There will also be instances where licensees have paid perhaps £2,000 on council fees and solicitors and newspaper fees for a variation which they are now having to pay an additional £700 a year to supplement.”441
476.Many other representatives of business agreed with Admiral Taverns that the LNLs simply served as an additional tax and source of revenue for local authorities, which did not effectively target the premises which were most responsible for causing problems. Business in Licensing demonstrated this by giving the example of one local authority which “sought to bring in a levy on any premises open after 1am which meant that the majority of vertical drinking establishments in the town centre did not pay, but the small 24 hour shop outside the town centre was hit with a levy in excess of £1500”.442
477.CAMRA also noted the “disproportionate effect that the imposition of a levy has on smaller, community-focused venues as opposed to nightclubs and large bars”. They noted that many community pubs could not easily afford the levy, and therefore reduced their licensable hours in a way that larger operators were not forced to, thereby “reducing the availability of such premises after midnight and reducing overall levy revenue”.443 Kuit Steinart Levy LLP made the similar observation that while the LNL did not “present a particular barrier to larger operators, particularly those with multiple sites”, they were concerned that it deterred “small, independent or start-up operators who may have something valuable to offer to the night-time economy”.444
478.George Dawson, President of the Working Men’s Club and Institute Union, also noted the detrimental impact that LNLs were having on working men’s clubs, pointing out that some clubs:
“… now have to do a variation, because six authorities decided to do the late-night levy. They get charged a late-night levy if the club premises certificate says, ‘until 2 o’clock’, even though they may not use it all the time, and they may use it on only two occasions in the whole year. Then they have to apply for a temporary event notice. The flexibility seems to be going from the idea of what was originally intended, but generally it is working well”.445
479.Punch Taverns also argued that the consultation process for introducing LNLs was not nearly as thorough and transparent as it should be. Having made submissions in relation to every LNL consultation held to date, they have come to believe that the submissions only served as “paid lip-service”, and that “the decision to impose a LNL has been pre-determined”. They further noted:
“There is currently no need for councils to publish their reasons for determining to adopt the LNL, which means there is little scope to challenge their decisions. Chelmsford stands out as an exception to this, where the levy imposed differed materially from that consulted on after responses were received”.446
480.The British Beer and Pub Association concluded that they were, in effect, “a step backwards to the previous 1964 Licensing Act … effectively forcing pubs en-masse to limit their hours to a specific opening time, or be taxed to be able to open later”.447
481.There was only qualified support for LNLs from some local authorities and police forces, although a number believed they could be very useful if the means for implementing them were improved. The National Police Chiefs’ Council (NPCC), for example, told us that they would like to see an increase in the number adopted,448 while the Local Government Association argued that they had been partially successful as they had helped address “the shortfall in income that otherwise prevents councils from taking forward innovative ideas”.449
482.However, hardly any respondents believed that LNLs were currently working as they should be, and some made suggestions for how they might be improved. Chief among these suggestions was to change how funds raised from LNLs could be spent, and how funds were divided between local authorities and police forces. Concerns about how the funds were spent by police centred both on where the money would be spent, as most police force jurisdictions in England and Wales are (often considerably) larger than local authority boundaries, and at what time of the day the additional policing funded by the LNL would be provided.
483.Leeds City Council reflected the views of many local authorities when they observed that one reason for “the hesitancy to impose a late night levy” on the part of local authorities was a “lack of oversight” over where the levy would be spent by police. They reported that in their case, they received “verbal confirmation that the levy raised in Leeds would be used in Leeds to provide additional policing, but no commitment was provided in a written agreement”.450 Birmingham City Council, which has not introduced a levy, also pointed to the fact that “there is no obligation upon police forces to spend the levy on the night time economy or within the area for which it was collected. Levy collected in Birmingham could, for instance, be spent anywhere in the West Midlands. The police could in fact spend it on anything of their choosing”.451
484.This concern was also voiced by industry representatives, who complained that it was often unclear to them whether LNL funds were being used to increase late night policing in their areas. Kuit Steinart Levy LLP, who provide legal representation to many licensees, told us that their clients “who trade nationally do not report increased visibility in terms of policing in the towns and cities where they pay the levy. It seems therefore that it is not sufficiently evident where the money is spent”.452 Poppleston Allen, who also provide legal services to licensees, similarly observed that:
“In one Levy area of which we are aware, the Levy pays for two Community Support Officers who stop their shift at midnight, the very time when the Levy hours kick in. Additionally, in all likelihood whilst they are working before midnight, they will be patrolling the BID [Business Improvement District] area (which is the busy later-evening area of the city concerned) and premises in the BID area are actually exempt from the Levy. The BID exemption is a very important exemption for licensed operators who contribute financially to it but this example does raise a question of whether the revenues arising from the Levy are being directed in the right way”.453
485.Even the NPCC noted problems in this area, when they told us that “the reason it has not been taken up is that we have not been able to persuade the other authorities that we will spend it on the night-time economy. There is naturally concern that it may go to other areas of policing.”454 They also pointed out, however, that funds allocated to the police now go to Police and Crime Commissioners, rather than straight to the chief constable of a particular force.
486.Both the NPCC and the Police Superintendents’ Association however disagreed with any attempt to allocate LNL-raised funds purely for ‘night-time’ policing in a strict sense, as they argued that the NTE in turn impacted upon other aspects of policing. Assistant Chief Constable Rachel Kearton of the NPCC pointed out that:
“… late-night hours and the night-time economy extend over the night time, but the policing impact is often picked up the next morning when people are sober. Witness statements can be taken, victims come forward, and so on. People find damage on premises that they own next door to licensed premises, or whatever it might be. First and foremost, we are looking at the totality of the impact of alcohol and what may come from licensed premises”.455
487.The Late Night Levy was introduced in large part to require businesses which prosper from the night time economy to contribute towards the cost of policing it. Yet the evidence we have heard suggests that in practice it can be very difficult to correlate the two with any degree of precision, which contributes to the impression, held by many businesses, that the levy is serving as a form of additional general taxation, and is not being put towards its intended purpose.
Division of LNL funding between police and local authorities
488.Another particular problem emphasised many times in the evidence we received is the statutory requirement456 that at least 70% of the funds raised through an LNL must be allocated to the police, with 30% or less retained by the local authorities. While police are free to spend their share of the money however they see fit, limitations are placed on local councils, which restricts them to spending these funds on measures specifically related to tackling alcohol-related crime and disorder, and on services connected with the management of the NTE.
489.Cheshire East Council, when explaining their reasons for not introducing an LNL in their area, pointed to this split, and believed that the Council would have “no control over where the [money allocated to the police] would be spent”, which could create a “reputational risk” to the Council.457 Birmingham City Council also highlighted that while “the police could in fact spend it on anything of their choosing”, they as a Council were limited to spending money on “tackling alcohol related crime and disorder and services connected to the management of the night time economy (e.g. taxi marshal schemes)”.458 Cornwall Council’s Licensing Authority concluded it was “unacceptable that most of the income raised would go to the police but not necessarily be ploughed back into addressing the costs arising from late night activities”.459
490.Updated Home Office guidance from 2015 notes that while 70% of LNL funds should still be allocated to the police, Police and Crime Commissioners may use their discretion, in discussion with local councils, to hand a proportion back to local councils.460 However, the default expectation remains that funds should be split on a 70/30 basis between police and local authorities, and only a small minority of local council respondents appeared to be aware of this possibility. Section 131(5) of the Police Reform and Social Responsibility Act 2011 allows for the amendment of the 70/30 split, but this has so far not been used.
491.The London Borough of Hounslow was one of the few councils that appeared to be aware of the possibility for renegotiating the split. They intended to investigate the introduction of a Late Night Levy, and hoped “that the funds raised will greatly assist us in providing services to police the night-time economy”. Nevertheless, they also stated that:
“A condition of introducing a levy will be that an agreement is reached with the police that the funds raised from the levy will not be split 70-30 with the police. The guidance issued by the Home Office in relation to Late Night Levy’s permits this at Section 1.41. We feel that the current requirement that police authorities should take 70% of the funds raised was ill thought through and has prevented many local authorities (including ourselves until now) from considering a levy. Local Authorities are best placed to allocate the money raised and could choose to do so over a range of Council provided services such as: licensing enforcement, CCTV controllers, community safety, street cleansing and pollution control.” 461
492.Even a representative of Derbyshire Police agreed that the 30% allocated to local councils “is often too low when councils look at administration costs. This figure is often not enough to be effective in reducing crime in the night time economy and I am not convinced that this extra funding is used to directly police the night time economy which is the reason it was brought in.”462
Further changes to LNLs under the Policing and Crime Act 2017
493.In the course of our inquiry we learned that the Government was planning amendments to the Licensing Act 2003 through the Policing and Crime Bill. Among the proposed changes were provisions which would make levies similar to Cumulative Impact Policies, allowing councils to target them at particular problem zones such as city centres, without applying them elsewhere. The changes would also allow councils to apply the levy to late night refreshment providers, who are currently exempt, and require local authorities to publish information on how funds raised by the levy funds are spent. The intention behind these changes is to make the Late Night Levy more flexible, more transparent, and easier to apply in practice.
‘Zoning’ LNLs
494.On the subject of ‘zoning’, a number of respondents were critical of the requirement that an LNL had to be applied across an entire local authority area, rather than being applicable in a more targeted way, as, for example, a CIP or EMRO is. Greater Manchester Combined Authority told us that they believed “the ability to ‘zone’ the levy, rather than applying it to the whole of a local authority’s area, would allow authorities to be more selective in the areas required to pay the levy—’making the polluters pay’ rather than charging every relevant premises in an authority’s area”.463 A number of other councils and police forces suggested that they had not introduced a LNL due to a significant divide between town centre premises, which tended to cause most of the problems associated with the late night economy, and suburban or rural premises, which generally did not, but would still have to contribute to a levy.464
495.Covent Garden Community Association also argued that, at the very least, it should be possible to align LNL areas with CIP areas, “and only on premises which were likely to have a negative impact, such as bars, clubs and off-licences and not on restaurants”.465
Removing exemptions for Late Night Refreshment
496.‘Late-night refreshment’ is a licensable activity created by the Licensing Act 2003, comprising the sale of hot food and/or hot drink between the hours of 11pm and 5am.466 This category was created on the basis that premises offering these products, which include late-opening takeaway and fast food shops, could contribute to crime, disorder and disturbance associated with premises licensed to sell alcohol, even when they did not serve alcohol themselves.467 As of March 2016, there were 86,500 premises licensed to provide late night refreshment.468
497.Councillor Clive Stevens, of Bristol, informed us that while nightclubs could be a “catalyst” for public nuisance, in the early hours of the morning it was often large groups of people congregating around takeaways which were causing a greater public nuisance for local residents.469 Hinckley and Bosworth Borough Council, Havering Borough Council, and Leicester, Leicestershire and Rutland Licensing Forum believed that LNLs should apply to late night refreshment providers as well as those providing alcohol.470
498.We have heard evidence from members of the late night food industry, who are opposed to plans to extend the LNL to cover their own businesses, where previously they were exempt. When we asked Ibrahim Dogus, of the British Kebab and Retail Awards, about his view on the planned extension of the LNL to late night refreshments, he responded that:
“Many of our smaller restaurants and takeaways operate on very small margins. With business rates, especially in London, likely to increase or double, this is going to impose a huge extra burden on those small businesses. Properly run restaurants and takeaways, which account for all their income and expenditure, will be paying business rates, VAT, income tax and national insurance for their employees. They are already contributing to meeting the costs of policing, safety and the cleaning of their areas.”471
499.Ultimately, he believed “there must be another way; there must be others who would be interested in contributing more to the cost”, and that it should not fall on late night refreshment vendors. Ron Reid, representing McDonalds, similarly pointed out that “a number of fees are levied, from business rates right through to the annual fees one has to pay to keep the licence, which are not inconsiderable”. In the view of McDonald’s, “well-run businesses should not have to pay an additional burden”.472
General conclusions on changes to the Late Night Levy
500.We were disappointed when we learned that the Government was planning to make such substantial changes to the Licensing Act before our Committee would have an opportunity to make recommendations on these matters. We appreciate that in some cases this was unavoidable, as some policies would have been formulated before our Committee was set up. This was not, however, the case with proposed amendments to the Late Night Levy, where the Government tabled new clauses and amendments only in September 2016. We believe it would have been more appropriate for the Government, instead of tabling these amendments three months after the Committee was set up, to have waited for the Committee to report its findings and conclusions, so that these could have been taken into account when formulating policy.
501.The Chairman of our Committee wrote to the Leader of the House on 2 November 2016, outlining this position, and asking for an assurance that the relevant provisions on the Late Night Levy would not be brought into force until after we had reported. We have received from ministers, verbally and in writing, categorical assurances that the provisions of the Policing and Crime Act 2017 regarding Late Night Levies will not be implemented until the Government has considered and responded to the recommendations in this report.
502.Given the weight of evidence criticising the Late Night Levy in its current form, we believe on balance that it has failed to achieve its objectives, and should be abolished. However we recognise that the Government’s amendments may stand some chance of successfully reforming the Levy. We recommend that legislation should be enacted to provide that sections 125 to 139 of the Police and Social Responsibility Act 2011 and related legislation should cease to have effect after two years unless the Government, after consulting local authorities, the police and others as appropriate, makes an order subject to affirmative resolution providing that the legislation should continue to have effect.
503.If the Government, contrary to our recommendation to abolish the Late Night Levy, decides to retain it, we further recommend that Regulations be made under section 131(5) of the Police Reform and Social Responsibility Act 2011 amending section 131(4) of the Act, abolishing the current 70/30 split, and requiring that Late Night Levy funds be divided equally between the police and local authorities.
504.Like all of our report, our consideration of the Late Night Levy is based on the evidence we received. None of that evidence suggested that there was any doubt about the lawfulness of LNLs. Plainly the Home Office had no such doubts, since they would not otherwise have proceeded with their amendments to the Policing and Crime Bill. However in Chapter 12473 we explain, in the context of licensing fees, the possible impact of the EU Services Directive on a requirement that a licensee should pay any fee or levy over and above what is required to process the application.
505.The EU Services Directive is an additional consideration which could have implications for the legality of the Late Night Levy. If the Government, contrary to our recommendation, decides to retain the Late Night Levy, the Home Office should satisfy itself that any further action relating to the Late Night Levy complies with the EU Services Directive.
Business Improvement Districts and voluntary schemes
506.The Committee has seen considerable evidence suggesting that Business Improvement Districts (BIDs) can achieve similar, and indeed often better, more flexible and more innovative results than Late Night Levies while also proving more acceptable to local businesses.
507.BIDs are partnerships between local authorities and local businesses which provide additional services or improvements to a particular area. In a BID area local businesses, which can include but are not limited to those licensed to sell alcohol, pay a form of levy. However, these funds can then be allocated in a far more flexible way and with a much greater degree of local consultation. For example, in some BID areas, such as Reading, there is a standard 1% levy on top of business rates which all businesses must pay, and a further 2% ‘night-time levy’ for licensed premises which open after midnight.474 Funds from this night-time levy are ring-fenced for initiatives to promote the night-time economy.
508.There is also a greater element of democratic accountability in the way they are established—in England and Wales, after a proposal is made, a ballot is held for all non-domestic ratepayers in the BID area who would be liable for the levy, and must be approved by both a numerical majority and a majority by rateable value.475 The BID is run by a managing board, which has free rein to make spending decisions, and seek additional income as it sees fit. After a set period, outlined in the proposal and not exceeding five years, the BID is wound up, although a further ballot for a new BID may then be held.
509.A number of respondents argued that BIDs were for this reason preferable to LNLs, and could produce more innovative solutions to the problems associated with the Late Night Economy. The National Association of Licensing and Enforcement Officers described how “levies can only be introduced after midnight but all licensed premises contribute to the late night economy and the inherent issues prior to that time”. They believed that “a fairer system would follow Business Improvement District (BID) schemes whereby all premises would be involved in shaping and promoting the night time economy and contributing to the process”.476
510.Indeed, TLT Solicitors suggested that while LNLs had “re-framed the discussion in terms of who is responsible for causing the problems in the night time economy”, this had led to “increased interest in initiatives, such as Business Improvement Districts that are more flexible in terms of who pays the fee and who participates, as well as allowing for greater engagement from those paying.”477 CAMRA concurred, observing that “a number of local authorities are turning away from late night levies and other cumulative impact policy set-ups to voluntary partnership arrangements such as business improvement districts”. It was their belief that this was a “very good development, which should be reflected in the Licensing Act if it is amended”.478
511.Several respondents drew attention to the case of Cheltenham. Admiral Taverns described how the city council, which was one of the first local authorities to introduce an LNL, “have now moved towards recommending a BID which allows any monies generated from all businesses in the area to be allocated to that area as the BID believes is necessary such as taxi marshals”.479 Punch Taverns also made this point, and argued that “all authorities that have introduced the LNL and published accounts after the first year have been shown to have raised considerably less than they estimated in their consultation documents”.480
512.Even the Home Office acknowledged to us that “there are some local authorities that do similar things in this space but do not quite have a late night levy”. They gave us the examples of Dalston in Hackney, which has a voluntary levy, and Nottingham, which has a “night-time economy business improvement district” that works alongside a conventional LNL. They told us that “local authorities might think that some of these things serve their purposes a little better than the late night levy”.481 In some local authority areas with a LNL, businesses which pay a BID levy receive a partial discount or full exemption from paying the LNL.
513.There are other, entirely voluntary schemes, which operate in a different way to BIDs, but which also seek to improve conditions and standards in the local night time economy. One of the foremost that the Committee heard about was Best Bar None, (BBN), which is a national award scheme, supported by the Home Office and the drinks industry, aimed primarily at promoting responsible management and operation of alcohol licensed premises through partnership working. Local Authorities can adopt and promote a BBN scheme in their area, with support from the organisation, and the initiatives which flow from it are intended to reduce the negative impacts of the night time economy, whilst improving the consumer’s experience. Another initiative which the Committee heard about was the Purple Flag accreditation scheme, which recognises standards of excellence within towns and cities in managing the night time economy.
514.There was widespread support for such schemes among the industry, including CAMRA, the ALMR, the BBPA and SIBA, who saw them as a far better alternative to LNLs.482 The Home Office also officially supports the BBN approach in particular, and more generally placed considerable evidence on voluntary partnerships in its Modern Crime Prevention Strategy of March 2016.483
515.Some local authorities, such as Telford and Wrekin Council and Watford Borough Council, also praised voluntary schemes as preferred alternatives to the LNL.484 The LGA offered more muted support, noting that, while “the impact and quality of [the schemes] does vary”, they were generally “a welcome contribution” and ensured that “a partnership approach can be taken to improving standards and tackling any local issues”.485
516.These schemes were not, however, without their critics. Balance North East Alcohol Office claimed there was “not a single piece of academic, peer reviewed evidence that [these schemes have] a significant impact on crime and disorder”.486 The Institute of Alcohol Studies argued the Modern Crime Prevention Strategy’s focus on voluntary schemes was “very poorly evidenced”, and Alcohol Research UK pointed out that they had, at most “largely undergone internal (and stakeholder-funded) evaluations only”.487 They believed there was a “pressing need for robust independent evaluations of industry-led voluntary schemes—especially as they are regularly presented as alternatives to existing or potential legislation.”488
517.The British Medical Association went further, arguing that “any emphasis on partnership with the alcohol industry and self-regulation has, at its heart, a fundamental conflict of interest that does not adequately address individual and public health. The alcohol industry has a vested interest in the development of control policies and so it is essential that alcohol policies are developed independently of them.”489
518.We welcome all the initiatives of which we heard evidence, including BIDs, Best Bar None, Purple Flag and others, and recognise the effort which goes into them and the potential they have to control impacts and improve conditions in the night time economy. We commend the flexibility which such schemes appear to offer, and the bespoke way in which they are developed to match the needs of their locality.
519.Following questioning on the subject, Sarah Newton MP told us she believed LNLs “should work in the same way as BIDs”. While she continued by stating that she was a supporter of BIDs, she believed there was:
“… flexibility in the new proposed arrangements to allow the police and crime commissioner to work with the area—the mayor of the town or city where the levy will be charged, the business improvement district, or the chamber of commerce if there is no business improvement district, and representatives of the community—to develop a plan for how they are going to spend that money”.490
520.We welcome the initiative of local authorities such as Cheltenham which have abandoned Late Night Levies in favour of Business Improvement Districts. While recognising that local authorities cannot impose Business Improvement Districts in the same way that they can Late Night Levies, we recommend that other local authorities give serious consideration to initiating and supporting Business Improvement Districts and other alternative initiatives.
402 Ibid.
403 Home Office licensing figures are rounded to the nearest 100.
404 In practice, they found the majority of on-trade premises were continuing to close at 11pm, and those that did tended to extend their hours by half an hour or one hour.
408 Ibid.
409 See paragraphs 473–505.
412 Letter from Sadiq Khan to Baroness McIntosh of Pickering, dated 5 December 2016: http://www.parliament.uk/documents/lords-committees/Licensing-Act-2003/Mayor%20of%20London%20to%20Chairman%20051216.pdf
414 Ibid.
415 A form of EMRO was added to the Licensing Act 2003 by the Crime and Security Act 2010, but the provisions were never commenced, and were repealed and replaced by the Police Reform and Social Responsibility Act 2011 (with modifications to allow them to cover a longer period each night, and to be introduced with a lower evidential threshold).
416 Home Office, Revised Guidance issued under section 182 of the Licensing Act 2003 (March 2015): https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/418114/182-Guidance2015.pdf [accessed 10 March 2017]
421 Paragraphs 311–316
431 Q 216 (Sarah Newton MP, Parliamentary Under-Secretary of State for Vulnerability, Safeguarding and Countering Extremism, Home Office)
433 Ibid.
434 Transport for London, ‘The Night Tube’: https://tfl.gov.uk/campaign/tube-improvements/what-we-are-doing/night-tube?cid=nighttube [accessed 10 March 2017]
439 Tower Hamlets Council, ‘Late Night Levy’: http://www.towerhamlets.gov.uk/lgnl/council_and_democracy/consultations/past_consultations/Late%20Night%20Levy.aspx [accessed 10 March 2017]
441 Ibid.
456 Police Reform and Social Responsibility Act 2011, section 131(4)
460 Home Office, Amended guidance on the late night levy (24 March 2015): https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/416092/Late_Night_Levy_-_new_guidance_as_at_24_March_2015__final_.pdf [accessed 10 March 2017]
464 Written evidence from Gloucestershire Licensing Officer’s Group (LIC0101); Durham Constabulary (LIC0045); LGA (LIC0099); South Tyneside Council (LIC0027)
466 Home Office, Guidance on the licensing of late night refreshment (October 2015): https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/464869/Guidance_on_the_licensing_of_late_night_refreshment.pdf [accessed 10 March 2017]
467 There are, however, numerous exemptions from requiring a licence for late-night refreshment, which the Home Office have detailed in guidance: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/464869/Guidance_on_the_licensing_of_late_night_refreshment.pdf [accessed 10 March 2017]
468 This figure will likely include some premises licensed to serve alcohol as well, as Home Office statistics do not give figures for premises licensed only to serve late-night refreshment.
470 Written evidence from Hinckley & Bosworth Borough Council (LIC0049); Leicester, Leicestershire and Rutland Licensing Forum (LIC0013); London Borough of Havering (LIC0068)
472 Q 193 (Peter Marks, Chief Executive, The Deltic Group; Ron Reid, Shoosmith’s, on behalf of McDonald’s)
473 Paragraphs 573–583
474 Reading BID, ‘What is a Business Improvement District?’: http://livingreading.co.uk/what-is-a-bid [accessed 10 March 2017]
475 DCLG, Review of Business Improvement Districts: Consultation (March 2015): https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/418008/BIDs_Consultation_Document.pdf [accessed 10 March 2017]
483 Home Office, Modern Crime Prevention Strategy (March 2016): https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/509831/6.1770_Modern_Crime_Prevention_Strategy_final_WEB_version.pdf [accessed 10 March 2017]