The Home Office said it would not introduce the change to give councils the power to set licence fees “at the present time” but added that it will invite local authorities to provide evidence of their costs before potentially proceeding with the move further.
The Government had conducted a survey asking licensing authorities to outline their costs, but only 20 out of 350 councils completed the form.
Regarding the proposal for a single payment date for annual fees, the Home Office added that it would consider an option under which licence holders can nominate their payment date, rather than introducing a universal date. It said this will benefit businesses that hold multiple licences without imposing unnecessary change on small businesses.
Concerns
The proposals had caused concern among the trade, with industry figures stating that the proposed universal caps on the local fees were too high and the removal of bands could hit smaller premises hard.
The proposals had outlined that fees for a pub in band B – the most typical band – would be capped at £740, £560 more than this type of premises currently pays. It also proposed that the fee to vary a premises licence to specify a designated premises supervisor would be capped at £105 – a 357% rise on the current fee of £23.
More than two-thirds of the 681 responses to the consultation were from fee-payers, who were strongly opposed to the proposals and expressed concern that there was not enough evidence of the costs local government incurs in administering the licensing system. Pub owners were also concerned that fees could rise without justification.
'Avoid undue burdens'
Crime Prevention Minister Lynne Featherstone said:“This Government strongly supports the vital contribution that responsible businesses, including pubs, hotels, restaurants and community premises, make to our economy and to their communities, and we want to avoid putting undue burdens on them.
“The introduction of locally-set licensing fees would affect a wide range of businesses and we need to get it right. We intend to work with local government to ensure that we move forward on the basis of up-to-date evidence.
“At the same time, we are committed to freeing up local communities to tackle alcohol-fuelled harms. That is why we have made it easier for licensing authorities and the police to deal with problem premises.”
Trade reaction
Andy Grimsey, solicitor at licensing law firm Poppleston Allen, said: “If only 20 out the 350 local authorities completed the survey it raises questions either about the need for imposing such a regime or perhaps their lack of resources even to complete the survey.
“This, combined with the confusion over the Hemming case (relating to the power to charge licensed operators for enforcement costs) leads to a rather unclear picture in respect of fees at present.
“The Government has invited the LGA to provide detailed up to date evidence of licensing authorities’ costs, and if this is so provided the spectre of locally-set fees has certainly not gone away.
“As to the single annual fee payment date, the option for owners of multiple premises to nominate a single date for payment has to be welcomed.”
'Great news'
British Beer & Pub Association chief executive Brigid Simmonds welcomed the announcement.
She said: “This is great news – in not moving ahead with locally set fees, the Government deserves our thanks for listening to our concerns. Such a change would have damaged small community pubs, which the Government is rightly keen to support.
“Pubs do not enjoy any subsidy; they pay hugely into the public coffers through the taxation system, through beer and other alcohol duties, business rates, and a host of other taxes, which is why we are campaigning for more business rates reforms for pubs and a third beer duty cut in the March Budget.”
'Government has listened'
Association of Licensed Multiple Retailers chief executive Kate Nicholls said: “It is important that retailers be afforded the stability they require to invest in their businesses and the retention of a national structure will give them some measure of consistency to do so.
“The introduction of locally-set fees would have led to a significantly increased financial burden for pubs, bars and restaurants, not to mention additional red tape and administrative costs to businesses already battling against tightening margins. Retaining the national structure shows that the Government has listened to businesses and opted for a common-sense approach.
“What we would like to see now is further action by the Government, looking at the business rates and alcohol duty burdens faced by licensed hospitality businesses, to create a fairer, more flexible marketplace for pubs, bars and restaurants to continue contributing to their local economies.”
'Clarion call'
Philip Kolvin QC, head of Cornerstone Barristers, who is representing sex licensing fee payers in the Supreme Court case of Hemming, said: “The most worrying aspect of the Home Office response is their conclusion that not all licensing authorities even have the capacity to estimate their costs, which they correctly state is a prerequisite for setting fees.
"Given that licensing authorities already have to set fees for other licensing regimes, including sex establishment and taxi licensing, the announcement ought to sound a clarion call to authorities to get their house in order.”
Local Government Association
Councillor Ann Lucas, chair of the LGA’s Safer and Stronger Communities Board, said: “It is hugely disappointing for the Government to miss an opportunity to ease the burden centrally-set licensing fees are placing on council services, which are already under pressure from a 40% cut to local government funding since 2010.
“Not letting councils set their own licensing fees and recover the full costs of applications from pubs, nightclubs and off-licences means that around £170 million of taxpayers’ money has subsidised the drinks industry in the past decade. This bill is rising by around £1.5 million a month.
“At a time when every penny is needed to protect services, this money would help patch up our crumbling roads and ease the pressure on squeezed social care budgets.
“The Home Office has accepted the principle of locally-set licensing fees by introducing them as part of the recent Scrap Metal Dealers Act. It makes little sense to then decide they can’t be introduced for the Licensing Act.
“Licensing fees haven’t risen in a decade despite an independent review calling for an increase in 2006. We will continue pressing the Government to ensure fees are increased and this subsidy is ended once and for all.”