Fair deal needed on licence costs

Alarm bells ring when the question of licence fees is raised these days. Now, the Local Government Group has raised the bar by suggesting not only "full cost recovery" — that ominous phrase — but fees set at a level to recoup everyone else's costs as well.

Back to Sir Les Elton, please. His report, which has been parked or ignored for more than three years, was fairly critical in parts of the approach by council lobbyists who wanted to load the licence fees with all their costs of a range of services.

He thought that they were over-egging the pudding, because many of these services would have to be

in place anyway and were not directly associated with the licensed trade specifically.

But of course the Elton report was parked mainly because the then Government did not want to cough up the £43m Sir Les said the councils were owed.

It was never paid. So technically the councils are out of pocket and it is not surprising that they want to claw back some funds from whatever source they can find.

There is no doubt that licensing fees will have to go up. They have been static since day one, with only the multiplier for large vertical drinking venues to bring in more cash. This is why the madcap idea of alcohol disorder zones was created, and why the similarly barmy idea of a late-night levy is now on the cards.

But remember what it was like in Westminster when public entertainment licensing was the cash cow for City Hall? Annual fees for larger hotels and clubs ran into thousands of pounds. An extra half an hour on your licence cost another four-figure sum, although the costs to the council were negligible. Overnight in 2005, all that income was snatched away, and the much lower fees for general licensing did not cover the huge administrative costs of the over-staffed licensing department.

There has to be some central control over fees, however. Leaving it to the calculations of local licensing authorities will result in anomalies and considerable over-charging in some areas.

Methods used to calculate cost recovery will have to be very carefully drawn up and then monitored, to ensure that everyone gets a fair deal. But regrettably, that dreaded phrase "the polluter pays" has crept back into MPs' vocabulary recently, and that could mean that the trade gets clobbered once again.