Trade welcomes Westminster City Council licensing fee judgment

Government plans to allow licensing authorities to set their own fees suffered a setback after a court blocked Westminster City Council from recovering enforcement costs against Soho sex-shop owners.

The court ruling, welcomed by pub trade industry bodies, found that only 10% of the licence fee was justified. It said the remainder, effectively the costs incurred by Westminster City Council to prosecute unlicensed operators, should not have have been charged back to the licensed sex shops.

Until recently Westminster charged sex-shop owners an annual licence of £29,102. New licences will now cost just £1,100.

Philip Kolvin QC, who acted on behalf of the sex-shop owners, said the ruling was likely to limit the ability of licensing authorities “engaging as much enforcement as they wanted”, and then charging it back to licensees.

He explained: “The Police Reform and Social Responsibility Act 2011 included provision for licensing authorities to set their own fees, but this ruling means they can’t set fees to recover enforcement costs. In the case of Soho, it seems offensive that licensed operators have been picking up the whole cost of the pursuit of criminals. It’s for the state to be enforcing the criminal law.”

According to British Beer & Pub Association spokesman Neil Williams, the Westminster ruling was welcome. “We’ve always argued very strongly that local licensing authorities cannot expect pubs and other licensed businesses to pay for the cost of over-zealous enforcement and unnecessary bureaucracy through potential increases to licensing fees.”

Kate Nicholls, strategic affairs director at the Association of Licensed Multiple Retailers, agreed that it was a very significant case, but added that the Government had already given a commitment to have a national cap on licensing fees.

“We don’t have unlimited cost recovery, like how it was under the sex establishment licensing regime, where licensing authorities had complete carte blanche.”

Nicholls warned that allowing licensing authorities to set their own fees without restriction could have meant a return to “those sky-high fees” experienced under the Public Entertainment Licences.

Scotland​
Patrick Browne, Scottish Beer & Pub Association chief executive told the PMA​ that the landmark case “reinforced” the requirement of the EU services directive, which he said imposes a "statutory obligation" on companies and public bodies to have transparency in terms of their fee regimes.

This transparency, Browne said, should be reflected in the new fees structure being considered by the Scottish Government.

“​Liquor licensing fees are being reviewed by the Scottish Government, the intention is they’ll be changed potentially as early as October this year,” Browne said. “When they do that they are going to have to draft new fees legislation. The judgement down South draws on the EU services directive… we’d like to make sure any new introduced fees reflects that transparency and openness.”

A Scottish Government spokesperson said: “Unless the fee is specified in legislation, the Scottish Government would expect local authorities to set their licensing fees at a level to ensure cost recovery and no higher. We will study the judgement carefully, particularly in the context of the alcohol licensing fees regime which is expected to report later this year.”