Review of Alcohol Licensing Fees - Steering Group: Recommendations to Scottish Ministers

Steering Group Consideration

36. The Steering Group considered the findings of the research and its implications for the alcohol licensing regime in Scotland. Although they concluded that the current fees regime could be improved, there was no consensus regarding whether an alternative approach should be based on turnover, square footage, or modifications to the existing regime. There were those in favour of each of these options, and it was not possible to resolve these issues definitively based on the evidence provided by the research.

37. Therefore, it was decided that at this stage it was not possible to justify taking a fundamentally different approach from the current system based upon rateable value.

38. However, there were a number of recommendations that the group agreed were necessary and appropriate at this stage, such as amending the occasional fees, considering whether the special status awarded to members clubsMembers' Clubs is still appropriate, and putting a duty on Boards to report their fee income and expenditure.

Occasional Fees

39. The research showed that occasional applications were the most labour-intensive activity for Boards, which spent between 5% and 50% of their total activity on these applications. Although many occasional applications require relatively little work, some are much more complex and labour intensive and the fee does not cover the associated costs. Furthermore, there are a large number of these compared to other applications. The group agreed that the £10 fee for the occasional licence was not sufficient to cover the cost of administration. They also felt that Boards should have the flexibility to charge an appropriate fee for occasional applications, up to a maximum fee determined by regulations. This would enable them to charge a greater fee for larger, more complicated, commercial applications, and a smaller fee for smaller, more straight forward applications.

Members' Clubs

40. The research showed that many stakeholders believed that members clubsMembers' Clubs should not receive reduced rates because some may be operating as commercial entities. The steering group felt that, in light of these findings, further work should be carried out to consider whether the treatment of members clubsMembers' Clubs was still appropriate.

Licensing Board Duty

41. The lack of data on whether Licensing Boards are currently achieving cost recovery means that neither an overall rise nor decrease in fee levels could be empirically-proven at this time.

42. The steering group agreed that action should be taken to address this data gap so that any future changes to the fees regime could be based on robust evidence.

43. The group noted the Hemming vs Westminster City Council judgement, while not having precedence in Scotland, makes clear that local authorities must be able to justify fees and demonstrate that they operate on a cost recovery basis.

44. It was agreed that the Scottish Government should take steps to place a duty on Licensing Boards to account for their costs and fee income in a transparent manner. It is important to ensure that the required accounting be produced and that Boards use comparable approaches to data gathering/reporting.

45. The details of how a duty may work are outside the remit of the steering group. However, very clear parameters will be needed or there could be wide variations in the methods and quality of cost reporting. There are many factors to be considered - for example licensing is just one of many tasks that local authority employees carry out; there are many indirect costs to consider; and some costs are not currently calculated (such as use of council buildings/electricity).

46. It was agreed that the most suitable approach would be to wait for an appropriate legislative opportunity to insert a duty into primary legislation. An order-making power could be inserted so that the details can be finalised at a later date.

47. At the SOLAR meeting on Fri 13th September 2013 (The Society of Local Authority Lawyers & Administrators in Scotland), the group considered the steering group's recommendation to place a duty on Licensing Boards to account for their costs in a transparent manner in order to demonstrate that their fees regime operate on cost recovery (unless they choose to make a deficit).

48. There was agreement from SOLAR that this was an appropriate recommendation, although the importance of clear guidance regarding exactly what kind of data Boards should provide was emphasised.

Fairness and Proportionality

49. The Steering Group discussed whether 'fairness' and 'proportionality' should be considered when setting the alcohol licensing fees or whether cost recovery should be the only consideration in decision making. The group agreed that although the cost recovery principles set out in the 2005 Act should determine the overall amounts raised through fees, within these totals it was appropriate to consider fairness and proportionality.