Funeral director licensing scheme for Scotland

Section 6 - Licence Fees

75. The Scottish Government considers that the proposed licensing scheme will provide certain benefits to businesses, including increased public confidence in the quality and reliability of their services, and the reputational benefits that would follow. In combination with the inspection regime, the proposed licensing scheme is also intended to provide businesses with an impartial and transparent assessment of their compliance with agreed standards, as well as an allocated licence number which is intended to demonstrate the business's compliance with set standards.

76. Further, funeral directors may benefit (directly or indirectly) from the following administrative and inspection work which will be undertaken to keep the inspection and licensing regimes operational:

• Administrative services carried out by the Licensing Authority and its staff, such as the processing of licence applications; record keeping of inspections and other key documentation; maintenance of a directory of licensed funeral directors in Scotland (which could be used for advertising purposes); and regular communication of key information which is relevant to funeral directors.
• Inspections from Inspectors appointed by Scottish Ministers (provided after each licence application or renewal application, at a minimum), inspection reports, recommendations for improvement if appropriate, and follow-up inspections or discussions if needed.

77. Section 95(2)(p) of the 2016 Act provides for fees to be charged for funeral director licence applications and licence renewal applications. Should the proposed licensing scheme be implemented, costs will be associated with processing licence applications or renewal applications. These costs will include the costs of undertaking inspections of funeral directors, which will be 'triggered' each time a licence application or renewal application is submitted.

78. The Scottish Government therefore proposes to use the powers provided in section 95(2)(p) to charge a proportionate fee for these applications, in order to recover these costs. It is intended these fees will contribute to the cost of administering the scheme.

79. Payment of the fee will be a requirement for the application being processed and the licence being issued.

80. The Scottish Public Finance Manual sets out that the standard approach charges for public services should be full cost recovery. It is our view that this is appropriate for the costs related to licence applications in this proposed licensing scheme (for example the processing and decision-making in relation to applications as well as the necessary, associated inspections to inform licence decisions).

81. We also intend for the fee to be formulated with the key principles of fairness and openness, which is a key reason we have discussed the fees' development with the Licensing Regulations Working Group, and why it is included in this consultation. If the proposed licensing scheme is brought into force, any fees will be set out in the regulations for full transparency for the funeral directors who will be impacted.

82. The Scottish Government is currently considering how the proposed licence fee for businesses will be calculated. It is important that the approach chosen is fair to the funeral director businesses who will be impacted by the fee, transparent and ensures that any fee strategy balances, to the extent possible, the differing needs of small, medium, and large businesses.

83. Additionally, the number of funeral director businesses in Scotland (and the number of premises they have) will affect the number of inspectors who are required to inspect them as part of their licence applications and licence renewals, and thus help determine the costs of inspector remuneration and expenses which must be recovered through fees.

84. Because the funeral director industry has not been specifically regulated in Scotland previously, the Scottish Government currently only has estimates of the number of businesses and premises. These estimates will feed into the Business and Regulatory Impact Assessment (BRIA) for the proposed regulations, which itself will inform initial calculations of the licence application (or renewals) fees. If the proposed licensing scheme is implemented, the Scottish Government would attain much more accurate data about the number of funeral director businesses and their premises once it begins receiving licence applications – this information would inform future amendments to the fees, if appropriate.

85. We note that the costs related to the work of Inspectors inspecting burial authorities and cremation authorities will not be included in calculations of funeral director licence fees. There is no licensing scheme for burial and cremation authorities and therefore no associated powers are contained in the 2016 Act which would enable Scottish Ministers to charge fees in this regard. The 2016 Act only provides powers to make regulations in relation to fees charged to funeral director businesses in relation to new licence applications and licence renewal applications.

86. In future, it is proposed that fee amounts would be monitored and kept under review as part of the ongoing administration of the licensing scheme, in line with the cost recovery principle. The actual fee amounts requires to be set out in regulations (by virtue of section 96(2)(p) of the 2016 Act). As a result, any changes to fees would be consulted upon (by virtue of section 105(1) of the 2016 Act) before being approved by Parliament. This means that the funeral sector and the public will have an opportunity to provide their views on each fee change proposal.

Question 13 - Please provide any comments about the Scottish Government's proposals to charging a fee at the time of a licence application and licence renewal to funeral director businesses.