Councils face black hole over licensing cost

New licence fees will have to be set higher than the government's proposals or councils will go bust, claims a leading licensing lawyer.

Speaking at a House of Lords committee meeting Chris Hepher, of Pullig & Co, said the government's suggested annual licence fee would leave a black hole in local authorities' accounts "the size of Enron".

Under the new system, the government is suggesting the one-off cost of applying for a premises licence will be between £100 and £500, with an annual charge of between £50 and £150.

But because public entertainment licences (PEL) will be scrapped it will mean councils will lose millions of pounds in fees.

"A large pub or club might pay £12,000 for a PEL," said Mr Hepher. "If it is asked to pay an annual renewal fee of £150, you can see the council is going to lose money hand over fist.

"Councils will need more money to help them deal with licensing, not less."

A spokesman from the Department for Culture, Media and Sport said: "We have published an assessment which gives an in-depth analysis of the cost implications of the Licensing Bill. We are therefore confident that the fee levels proposed are sufficient.

"We are in on-going dialogue with the Local Government Association and will discuss with it any concerns."

Feelings in the House of Lords are running high over the transfer of licensing to local authority control.

Many peers have questioned the government's intentions and say it has given no satisfactory reason why control should be moved from magistrates.

"Kill the bill" campaigner Stuart Neame said it is still possible to make the government change its mind.