Licensing fees: Off the scale

The licensing fees are higher than expected, as Tom Sandham reports.

After some all too familiar procrastinating, the government finally announced the fee structure for licensing last week. But while licensees should have been breathing a sigh of relief that the details of the new licensing regime were finally taking shape, the response has largely been "no thanks". Not only did the fees arrive late, little more than two weeks ahead of the First Appointed Day, but they are noticeably higher than was originally trailed by the Department for Culture Media & Sport (DCMS). Instead of being relieved that they know the score, publicans are understandably incensed as licensing reform continues to hit them where it hurts.

And what timing for the announcement - when the DCMS finally revealed the figures they conveniently featured alongside the government's plans to combat binge-drinking. In a week that had seen the national media generate plenty of hysteria, it was hardly surprising that the fees were almost swept under the carpet.

The fees were originally set at £80 for premises with rateable values of up to £4,300, £150 for rateable values up to £33,000, £250 for rateable values up to £87,000, £350 for rateable values up to £125,000, and £500 for those above.

The revised fees are, respectively: £100, £190, £315, £450 and £635. In each case there is an annual "top-up" fee, which has also been increased.

But it doesn't stop there. For those premises exclusively or primarily in the business of selling alcohol in band E (mainly larger town centre pubs), the application fee has amazingly increased three times to £1,905 and the annual charge to £1,050.

Government estimates don't really hold much water so when in 2003 the licensing minister at the time, Kim Howells, suggested the one-off premises fees would be between £100 and £500, it was difficult to believe it wouldn't go higher.

There is little faith that a government review of the Licensing Act will ever work in the favour of licensees. Perhaps the wildly optimistic will see a way back on fees, most won't though and it's to be expected that the only direction they will go from here is up.

"There'll be no change in this now," says Mark Hastings, director of communications at the British Beer & Pub Association. "But it's important that everyone in the trade feeds back the impact on business over the next 12 months.

"The fees represent an increase in what was initially proposed and at the lower end of the market will have a huge impact on overall revenues."

The DCMS points at two reasons for the rise - the first being that the level was pitched too low. Apparently the original estimates would not "enable the full costs recovery for administration and enforcement in the new regime".

Local authorities, which began their campaign to raise the fees from the day the provisional figures were announced at The Publican Conference in November, appear to have won the day.

Sally Powell, Local Government Association chair of the safer communities board, claims: "This national system will generate income for local authorities to enforce the new laws. The fees are based on full cost recovery and the process will be completely transparent so if they are too high that will be seen, and likewise if they are too low. There will be a full review after a year."

Perhaps more alarming is the implication that the extra is needed to cover rising costs around premises when hours are extended.

According to culture secretary Tessa Jowell: "In particular, we are asking the largest town and city centre pubs to pay a higher premium. This is only right. They can have the biggest capacities, the highest turnover and often make the greatest profit. They are a major beneficiary of our nighttime economy. They should put more back into policing it."

This will prove a little hard to swallow when the same government is investigating additional fines for licensees in "alcohol disorder zones". Quite rightly the trade will be asking where it all ends.

Bob Cotton, chief executive at the British Hospitality Association, agrees: "The government has caved in to pressure from local authorities, which claim the new system, in which they are responsible for licensing, will cost them money. What will happen in 2006, after the first year's review, if the local authorities come back and ask for more? This could be a regular little earner for them."

Premises in bands D and E which are exclusively or primarily in the business of selling alcohol, will have fees and charges doubled and trebled respectively.​

Payments to vary conditions during the transition range from £20 to £120. For further details visit www.culture.gov.uk/alcohol_and_entertainment

Related articles:​

Increase in final licensing fees (21 January 2005)