Short-term lets – licensing scheme and planning control areas: business and regulatory impact assessment

D: Options

47. The 2019 consultation sought views on a wide range of possible approaches to the regulation of short-term lets. The 2020 consultation set out detailed proposals for a licensing scheme and control area regulations. In the 2020 consultation, we were not seeking views on a range of options but rather issues and solutions that would help refine the proposals set out in the consultation paper. The Minister for Local Government, Housing and Planning, Kevin Stewart MSP, outlined the Scottish Government’s approach in response to the 2019 consultation in the Scottish Parliament in January 2020.

48. We did not publish a partial BRIA with the 2020 consultation paper, as we were not seeking stakeholders views on a range of options (which was covered by the 2019 consultation) but were seeking feedback on the specific elements of our proposed regulatory scheme. However, the views expressed in the 2020 consultation, and further engagement with local authorities afterwards^[6], has provided useful information for this BRIA.

49. This BRIA focuses substantively on two options:

a) do nothing; and

b) the licensing scheme and control areas as set out in the Licensing Order and Control Area Regulations.

50. The 2020 consultation paper did not set out other options.

51. We have not separately assessed proceeding with the Licensing Order only (i.e. not proceeding with the Control Area Regulations) as an option. This is because the Control Area Regulations provide entirely discretionary powers to local authorities. It will be for local authorities to consider whether and how to make use of these powers and assure themselves that the use of these powers has the intended impact.

52. We did carefully consider industry suggestions for a registration scheme, and below we set out why we did not regard this as a viable alternative.

D1. Registration scheme

53. The sector has developed codes of conduct and guidance for hosts, with Airbnb, ASSC and STAA all publishing advice for hosts^[7]. The sector is not against regulation and sees benefit in helping hosts achieve basic safety (and quality) standards in their accommodation. The discussion has centred on the structure of that regulation.

54. There was, and remains, significant industry lobbying for a registration scheme as an alternative for the licensing scheme. A registration scheme would require a Bill (primary legislation) and would not have been possible to deliver in this session of Parliament. Development and Parliamentary consideration of a Bill, followed by secondary legislation and an implementation period, would likely push back the opening of a registration scheme to sometime in 2024 (whereas the licensing scheme will open in April 2022). The Scottish Government’s view is that such a timetable is too slow when the 1982 Act provides a suitable mechanism for regulation.

55. A key argument made by industry for registration, as opposed to licensing, is that, under a registration scheme, a host can register and continue operating whereas, under a licensing scheme, the host must wait to be granted a licence before operating. The Licensing Order makes provision for existing hosts (i.e. those operating before 1 April 2022) to continue to operate whilst their application is processed. Such existing hosts have until 31 March 2023 to make an application for a licence.

56. The other principal argument advanced is that a registration scheme would be much less costly and bureaucratic. However, this entirely depends on the requirements of the registration scheme. A “light touch” registration scheme is likely to be less costly to administer than the licensing scheme but, by the very nature of being “light touch”, would not deliver the same assurances and protections around safety and would not provide the tools to manage noise and nuisance. Local authorities are also well-practiced at administering licensing schemes under the 1982 Act and are likely to be able to adapt systems and practices in order to extend to the licensing scheme. A registration scheme would require new, unfamiliar infrastructure which local or national government would need to establish and fund.

57. In summary, the Scottish Governments’ view is that a registration scheme would not be ready in sufficient time and risks being either cheap and ineffective or a more expensive way of delivering the benefits of the licensing scheme.