Local authorities to pay licensing shortfall, says panel

The Independent Licensing Fees Review Panel, chaired by Sir Les Elton, has recommended to the government that local authorities should pay the £97m shortfall created by the implementation of the licensing regulations last year.

The panel, which was commissioned to look at the Licensing Act 2003 fees to ensure they were set at the right level for licensees and local councils, announced that local authorities will have spent more than they received in licensing fees during the first three years of the new regime

It also said that fee payers incurred higher costs than anticipated.

The panel said that the £97m shortfall, incurred over three years includes £43m, 20% of the total cost, which should be met by central government, plus £54m due to decisions made by some local authorities.

It further recommended that the fees should increase by 7% for the three year period from 2007/08, which the panel believes would bring in £3m in extra revenue a year. It also said that the fees should be reviewed again in three years time from 2009/10, for implementation in 2010/11.

The panel also make a number of other recommendations to streamline the process including local authorities to accept forms submitted electronically, paperwork to be simplified and set date for licence renewal.

Mark Hastings (pictured), director of communications at the British Beer & Pub Association, said: "We congratulate Sir Les Elton and the Panel for what is a comprehensive, thoroughly researched and authoritative report. In particular, it shines an interesting light on the wide disparity in costs entailed in the way some local authorities have approached the new Licensing Act. ​

"Furthermore, it raises questions about whether those costs were necessary or justifiable. We need to ensure lessons are learned and that those local authorities with excessive costs learn from the best in delivering an effective and efficient service.

"We are concerned about a seven per cent increase in fees. At a time when we are all trying to rein in inflationary pressures, it is not helpful to have an increase like this levied on business by government."