Short-Term Lets Working Group minutes: 2 February 2022

Attendees and apologies

Name	Organisation
Theo Lomas (TL)	Airbnb
Tony Cain (TC)	ALACHO
Fiona Campbell (FC)	ASSC
Ryan Pearson (RP)	Booking.com
Chris Mckee (CM)	City of Edinburgh Council
Ailsa Raeburn (AR)*	Community Land Scotland
Mike Callaghan (MC)	COSLA
Jean-Philippe Monod (JPM)	Expedia
Jo Millar (JM)	Gilson Gray
David Littlejohn (DL)	Heads of Planning Scotland (Perth & Kinross Council)
Sarah Farnham (SF)	Ketchum – representing booking.com
Alison McNab (AN)*	Law Society of Scotland
Hazel Stevenson (HS)	Local Authority Environmental Health Officers
Emily Donnelly (ED)	PLACE
Claire MacKenzie (CMz)	Police Scotland
Deborah Heather (DH)	Quality in Tourism
David Weston (DW)	SBBA
James Clark (JC)	Scottish Fire and Rescue Service
Simon Ovenden (SO)	Scottish Land & Estates
Marc Crothall (MCr)	Scottish Tourism Alliance
Shomik Panda (SP)	STAA
Patrick O’Shaughnessy (PO’S)	VisitScotland

*Part of meeting only

Scottish Government officials:

• Anita Stewart (AS) – More Homes (chair)
• David Manderson (DM) – More Homes
• Rachael Gearie (RG) – More Homes
• Linzie Liddle (LL) – Tourism and Major Events

Items and actions

Welcome and scene setting (including revised Terms of Reference)

Apologies had been received from Leon Thompson, Russel Griggs, James Foice, Kimberley Langley and Wayne Mackay.  Apologies had also been received from Alistair McKie and Kirsty Henderson, with Alison McNab and Emily Donnelly attending in their place.

AS introduced herself as the new Chair of the Short-Term Lets Stakeholder Working Group and invited members to introduce themselves in the chat bar. AS thanked members for taking time to have individual introductory meetings since her appointment.

AS explained that all members (including those who resigned last year) had been asked back together in order to provide input to revise the licensing guidance to reflect the Licensing Order approved by the Scottish Parliament in January 2022. AS acknowledged there was a difference of opinion within the group about the best approach to regulating short-term lets, with some favouring registration. AS noted group members’ positions and that the working group terms of reference recognised involvement in the group is without prejudice to members’ freedoms to express their sectors’ views and represent their interests in the media and other for a. However, as the Licensing Order had now been approved by the Scottish Parliament, the group was being asked to utilise its range of expertise and interests, which had been of great assistance in the development of draft guidance in 2021, to update the guidance and prepare for the licensing scheme opening in October 2022.

David Weston (DW) explained that the SBBA agreed with the aims of making all tourism accommodation safe, and levelling the playing field between different business models. However, he disagreed that licensing was the right approach. It was the SBBA’s  view that the licensing scheme was disproportionate and onerous. DW did acknowledge that some concerns that industry bodies raised had been addressed in changes set out in the letter from the Cabinet Secretary for Social Justice, Housing and Local Government to the Convener of the Local Government, Housing and Planning Committee, dated 7 October. Despite not supporting licensing, DW acknowledged that the Scottish Parliament had approved the licensing legislation and therefore wanted to be as constructive and practical as possible to help the Scottish Government get the guidance right. Fiona Campbell (FC) echoed DW’s concerns (particularly that she felt the scheme would be onerous and disproportionate) but she recognised that the legislation has been passed. FM indicated ASSC has concerns about rejoining the working group and asked that a recent email to the Scottish Government be minuted (Annex A).  

On the revised Terms of Reference (ToR) circulated to the group for comment, AS explained that it felt right to bring the entire working group together again to finalise the guidance. However, going forward the group could meet on an adhoc basis for specific reasons, with members given the option to attend if their expertise/ interests related to those matters, rather than re-convening the full group. The ToR had been revised to reflect the changed purpose of the group from informing SG about development of legislation and draft guidance to helping to revise guidance to ensure it was: clear and easy to follow, and provided clarity on the intended approach that helped to remove unwarranted variation on processes across Scotland.

Members were in agreement with the revised ToR, which AS noted would be published on the working group webpage.

Forward Look

AS explained it was the Scottish Government’s aim to publish the guidance in March, when the legislation would come into force. This would allow those involved, particularly licensing authorities, to prepare for the scheme going live. AS acknowledged the timescale would be tight, and needed to factor in internal clearance processes. Members were invited to submit written contributions or tracked changes for consideration. AS explained that further updates would be considered, and the document could be honed as the scheme rolled out, but it was important to publish guidance that reflected the approved legislation as soon as possible.

Licensing Guidance discussion

AS introduced the discussion on the licensing guidance, and suggested exploring the following four main areas:

• Style, layout and general content in licensing guidance part 1 and part 2.
• Risk based approach to inspections, and supporting licensing authorities to do so.
• Fees
• Use of temporary licences and temporary exemptions

Marc Crothall (MCr) touched on the importance of engagement and using the expertise within industry groups and keeping the guidance as simple as possible.

Mike Callaghan (MC) asked if there would be any funding available for local authorities to support the implementation of the scheme. AS explained that as the scheme worked on a cost recovery basis there would be no funding provided by Scottish Government.

Style/layout/format

 Joanna Millar (JM) felt that some sections of the guidance were too ‘chatty’ and based on opinion and narrative. For example, commentary on research outlining negative impacts of short-term lets. Her view was that both parts of the guidance should focus purely on what is set out in law, and what the law requires people to do. JM was concerned about the use of the MoSCoW rating system as she felt this was primarily a project management tool and not based in law. JM also commented that the Civic Government (Scotland) Act 1982 had operated for 40 years, and supported by a significant amount of case law.  

Action 5.01: Officials to consider the use of the MoSCoW system

FC echoed what JM had said and stressed the need for plain English and that the guidance must be approachable and significantly shorter. FC commented that anything that could be done to simplify the process would be welcomed. FC suggested that JM should be allowed the opportunity to redraft the guidance, given her extensive expertise in licensing and the production of associated guidance.

 Shomik Panda (SP) agreed with the previous comments on making the guidance as simple as possible, as he felt both documents were still quite dense. SP  suggested creating infographics to make it easier for hosts and operators to understand. AS explained that SG was currently exploring an interactive tool to aid hosts and operators understand whether they were likely to require a licence, and what type they may require. SP was also concerned that some of the language used in Part 1 of the guidance suggested that there was no benefit to secondary letting. SP felt this should be removed.

Ryan Pearson (RP) explained that Booking.com’s main concern was around the lack of clarity on legal obligations for platforms. If there were no legal obligation on platforms then some platforms would not do what guidance recommended they should be doing creating a fragmented approach across Scotland. RP considered that the way platforms adhered to guidance was critical to the success of the licensing scheme.     

Risk-based approach

DW noted that a risk based approach to the licensing scheme was very important to the B&B sector and wanted to see the wording around this strengthened in guidance. DW suggested the list of reasons a licensing authority may want to consider when taking a risk based approach should be expanded on. DW suggested licensing authorities should develop a risk scoring system, whereby those who have operated for a long time, and are a member of a trade organisations and have various accreditations should be considered low risk, especially compared to a new operator starting up who may not yet be a member of a trade organisation. JM could understand the rationale for DW’s suggestion but commented that it would not be appropriate to include it within the guidance, as it was too prescriptive. Stating that new operators may need inspected was offering an opinion.  

James Clark (JC) commented that whilst being a part of an organisation or trade body may be beneficial, it would not determine whether a person was compliant or not. The Scottish Fire and Rescue Service would consider the approach to inspecting short-term lets through licensing consultations and auditing processes. The potential impact of the licensing scheme on the SFRS was significant, and therefore it was important to ensure a standard approach was applied across Scotland.

FC considered that a risk based approach was the preferred way forward from an operators point of view, and did not want to see an onerous approach to inspections. Therefore the approach licensing authorities took in relation to inspections needs to be as clear as possible.

Chris McKee (CM) explained that City of Edinburgh Council are currently considering a risk based approach and how it would work with their existing structures and new IT provision. CM indicated he would be happy to feedback and work with other local authorities on the issue.

JM cautioned that guidance should not tell licensing authorities how to do their job as they have a lot of experience in administering licensing schemes under the 1982 Act. The guidance should not be detailed or express any opinion as that might influence the licensing committee. AS explained the guidance was non-statutory and the Cabinet Secretary had been clear that the Scottish Government wanted to work with licensing authorities to support the roll out of the licensing scheme, and ensure that the policy intent was communicated through the guidance.

Fees

AS drew attention to the Cabinet Secretary’s letter of 7 October to the Local Government Housing and Planning Committee, which said the Scottish Government was considering specifying an average fee in guidance which licensing authorities should not exceed. AS advised that having considered this matter, it would be unrealistic to calculate average fees that all licensing authorities could implement (and still administer under a cost recovery system). Therefore to note this had not been included in the revised guidance. Instead the emphasis was on providing clarity through the guidance of how licensing authorities could use a risk based approach to assessment that would minimise fee levels and be proportionate.

FC was concerned that fees were the biggest threat to short-term let operators, and setting average fees would not be possible. FC noted that local authorities have no idea how many short-term let premises there are in their area, or the type of premise, so it will be impossible for them to set an accurate cost recovery fee, FC cautioned against setting fees according to turnover, as this could be seen as a form of taxation, not a licence fee.

DW considered fees to be an important as they had the potential to seriously impact on small micro businesses and a flat fee would not be fair. JM warned that guidance on fees should be based on what was set out in the 1982 Act only, with responsibility for setting fees resting with licensing authorities on a cost recovery basis.

Simon Ovenden was concerned about unscupulous operators flying under the radar of licensing authorities. FC echoed this concern, given it will be more straightforward to target operators who are already compliant and known to local authorities, for example through inclusion on the non-domestic rates register, than those who aren’t. FC felt this will disproportionately impact legitimate businesses and not reach the non-compliant hosts that the legislation purports to target.

DW and SO both agreed that proportionality was critical. SO was particularly concerned for those operating in very remote areas, including in island communities.

Temporary exemptions/licences

CM acknowledged that Edinburgh was known for relying on additional accommodation for short periods of the year to facilitate large events such as the festival. CM outlined that City of Edinburgh Council had not yet discussed these powers in detailed, but expected they would be included in a consultation on the licensing scheme.

Emily Donnelly (ED) was concerned that use of temporary exemptions may be at odds with the requirement that licensing authorities could not impose a maximum annual number of nights a property could be let for (in order to avoid properties lying empty for large parts of the year). She was also concerned that they may be at odds with planning control.

Planning guidance

AS briefly updated the group to explain it was the Scottish Government’s intention to also update the planning guidance and planning circular, alongside updating the licensing guidance.  

DL considered that updates to the planning guidance would be minor tweaks, rather than wholesale changes.

SP asked if planning guidance could set out clarification on the notification process, following designation of a control area, seeking clarity on notification to hosts and operators with an existing licence.  

Action 5.02: Officials to consider this request when updating the planning guidance.

Communicating the message to hosts/operators

AS noted licensing authorities would be expected to raise awareness of the new requirement of licensing in their areas. Alongside this she informed members that the Scottish Government is also considering how it might support this nationally. AS asked members if they had any views or suggestions on how best to let hosts/operators know about the licensing scheme - particularly those in hard to reach groups such as home sharing.

DW noted that trade associations could help to get the message out to their members, and stressed the need for funding in order to develop a communications project to reach all short-term let operators. FC noted that whilst they could communicate to their members, SG and local authorities would find it difficult to reach operators who were not members of associations, and it was those operators who were the most critical to reach, as in her opinion they may be less likely to be compliant. DW suggested a taskforce or communication working group may help. The ASSC, Visit Scotland, Quality in Tourism, Scottish Land & Estates expressed their interested in being part of a communication sub-group. AS thanked members and indicated this could be helpful.

Action 5.03 – Secretariat to follow up with interested members once Scottish Government discussions on communication are at appropriate point to engage further.

2023 Review

AS highlighted that the 2023 would be a point in time review and should give a good indication of the numbers of licence applications made, following the April 2023 deadline for all existing hosts and operators to submit an application for a short-term let licence. The review would allow the Scottish Government to assess how the regulatory measures were working, whether any further measures were required, and to confirm that the wider sector was still healthy. The Scottish Government would also continue to monitor the proposals on an ongoing basis, to ensure they remained effective and targeted. FC noted that the Cabinet Secretary had said the 2023 review was about assessing the health of the sector, but FC felt this would be impossible given the lack of baseline data. FC advised the ASSC is aware of operators already leaving the sector on the basis of the introduction of this legislation. FM stated she believes a viable review is therefore unachievable. 

Patrick O’Shaunessy (PS) updated the group that the data observatory objectives being led on by Visit Scotland are quite different from those of the monitoring process. However, VS as an organisation are carrying out a separate data mapping exercise, which may fit with the monitoring review. AS welcomed this update and agreed officials would be interested in exploring this.

Action 5.04 – Secretariat to follow this up with Visit Scotland

ED welcomed the 2023 review, and wanted to see a commitment that overprovision conditions would be reinstated as an outcome of the review. ED was concerned that control areas were reactive rather than preventative, and felt reinstatement of overprovision would be a tool that licensing authorities would need. FC noted that as the licensing scheme was primarily about safety she did not feel it would be appropriate to consider overprovision as part of the review. AS noted both points, and indicated it is important not to pre-empt the findings of the review nor what further measures may be considered as a result.

AS invited group members to suggest what metrics the Scottish Government should monitor as part of the review.

Summary and next steps

AS thanked members for their contributions and for an interesting discussion, and encouraged members to provide comments on the revised guidance, which would be used to make sure the guidance is more user friendly and  supports licensing authorities to deliver licensing schemes that meet the policy objectives of the legislation.

Short-term lets stakeholder group meeting: Annex A

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