Trying to build on shaky foundations

It is rather like asking a competent tailor to make alterations to a suit that never fitted in the first place. Sir Les Elton's small review committee have done their best and provided some smart embellishments, but it still looks decidedly lopsided.

That's my first impression of the report on licensing fees, commissioned by the Department for Culture, Media and Sport (DCMS) when they realised everyone was unhappy with their last-minute efforts, and published last week.

The main recommendations - a 7% hike in fee levels and belated £43m transition payment direct from Government to local councils - have been covered elsewhere. But some other points bear closer scrutiny as well.

The key reason for proposing fairly modest changes is spelled out early on. Sir Les thinks that the true picture on local council costs has not yet emerged, because work on transition ran on well into 2006 and some of the local authorities in his "quartile" (those on which he bases his recommendations) had not issued licences until last autumn.

Really? Sorry to rub it in, but was I not berated by the Local Authorities Co-ordinating Office on Regulatory Services (LACORS) for daring to suggest this was the case? Surely Sir Les is wrong - they were all issued by the end of 2005, according to the local government people.

The report indicates that polar opposites rarely share common ground: the trade felt the fees were too high and the Local Government Association insisted they were far too low, and that they were considerably out of pocket.

Sir Les agrees, to an extent, with the "out of pocket" argument. But I do recall the licensing minister in 2003/2004 promising "seed-corn" funding to help them through transition. Clearly, the £43m the report proposed should have been with them from February 2005, when they obviously needed it.

But Sir Les does not think the compensation payments should all come directly from the trade. The report suggests wide variation in costs (and by implication, efficiency) among local councils, some of whom, he feels, have used licensing to enforce other legislation for which they were responsible anyway. He felt there was a level of confusion over areas already covered. I am glad he picked that up, particularly on enforcement. He comments that it is

"difficult to understand what has changed that requires additional funding through licence fees."

So a further review will be necessary three years hence, when the dust has truly settled. This is reasonable, but the trade is left with the sense that the bridge to higher fees has been crossed and a return to low-cost licences and exemptions is not on the agenda.

In fact, Sir Les has most definitely turned his back on most of the exemption or remission arguments - including, rather surprisingly, the problem with small traders or clubs inside large rateable areas. There was a good case here for a charge based on the licensed area. I think he has got some of this wrong, but he has asked the DCMS to look at it again.

There are also one or two anomalies or omissions. The report does not discuss the actual rate-banding divisions at all, except for a passing reference to splitting band B, which is by far the largest "chunk" of the market. Also, Sir Les considers it appropriate that an argument for impact on costs should apply to premises which attract large amounts of enforcement and inspection (such as city-centre drinking venues), but conversely, no impact argument for small premises which don't.

As promised, the report has made some further suggestions on improving the system as a whole, to take more of the hassle out of licence applications and changes. Simplifying and shortening the licence/variation application form is suggested, as well as tidying up designated premises supervisor (DPS) variation and a longer period for interim authorities (28 days instead of the ludicrously short seven, which I wrote about four years ago).

A key recommendation is electronic submission of licence applications and the possibility (taken up already by a couple of enlightened boroughs I know) of sending one form to a central council point instead of having to photocopy and post out up to seven or eight identical packets of forms and supporting paperwork. That is true simplification of the process, and nobody suffers.

Finally, the last paragraph of the annex on forms gently criticises the guidance notes attached to the forms, which in my view are the most unhelpful and badly-written work ever to emanate from a Government department. Give the job to Revenue & Customs! Whatever you think of them, at least they can write plain English and provide actual instructions on what to put in the boxes.