Reform spells budget woe for 40% of councils

by John Harrington

Four in 10 local authorities in England and Wales have contacted the Local Government Association (LGA) saying that reform of licensing laws will leave big holes in their budget, the Morning Advertiser has learned.

Local councils fear they may be forced to cut other services ­ or increase council tax ­ to pay the substantial costs of taking control of licensing, with responsibilities for inspections, plus legal and administrative costs.

They could be forced to hire emergency staff to cope with the workload, and some councillors say they may have to sit full-time on licensing committees.

The LGA is calling on the Government for extra funding to cover the cost of introducing the new licensing regime.

This comes as councils and the industry still remain in the dark about the fees, details of which have yet to be published. The LGA had earlier warned that councils need details of expected revenues before they can start to budget for next year.

LGA spokeswoman Trish O'Flynn said there has been "minimal growth" in local government budgets, so any extra costs would have to be covered in other ways.

"The DCMS [Department of Culture, Media & Sport] says the fees will cover all costs. If that doesn't prove to be the case then there will be problems for local government.

"If the licence doesn't cover our costs then there are two options: either cut a service to pay for it or raise council tax."

She added: "About 150 out of the 376 authorities said they expect to lose money."

Westminster Council is understood to have allocated £2.6m and hired 25 extra staff to cope with the strain of licence applications.

Audrey Lewis, council member responsible for licensing at Westminster, said: "It's a nightmare. Councillors will have to sit on licensing applications daily all day for months on end to review applications.

"I don't think the Government has thought through the chaos it is unleashing on local authorities over the next 12 months."

At Blackpool Council, an extra 14 emergency staff members have been recruited to cope with the added demand.

"We have no final figures but this is going to have a significant impact on our resources," said a spokesman. "We are braced for a huge operation."