Cheltenham became the second local authority in the country to introduce a LNL in April 2014 — paid by licensed premises operating between midnight and 6am — which is meant to fund initiatives to improve the night-time economy.
The council pushed ahead with the introduction of the levy, despite the majority of respondents to the consultation opposing it, claiming it would raise almost £200,000.
But a Freedom of Information request by the PMA’s legal specialist Poppleston Allen a year on from its implementation revealed that income raised was £76,889 — just 39% of the original estimate.
The amount of premises that contribute to the levy is 123 — almost 100 fewer than the original prediction — with the council confirming that 22% of premises affected reduced their hours by way of a licence variation to avoid paying the tax.
While some of the cash is being spent on valid schemes, critics have said the money is not being used to tackle specific problems in the town and is even funding research into a new alcohol-free venue.
Kate Nicholls, chief executive of the Association of Licensed Multiple Retailers, said Cheltenham’s approach was “against the spirit of the regulations” and demonstrated why the legislation should be reviewed.
She also expressed concern that the cash was being used to fund activity that would normally be covered by local authority expenditure, such as a coordinator for a new Purple Flag scheme.
“These are good partnership initiatives but they benefit all businesses, day and night, as well as late-night, but are only being paid for by the latter, and they are initiatives which should be pursued instead of a levy not on top of one,” Nicholls said.
“It is also worrying that the impact of the levy has been to reduce diversity in the night-time economy — with businesses closing and re-ducing their hours high-lighting the unforeseen consequences of a new tax.”
British Beer & Pub Association chief executive Brigid Simmonds said the figures added more weight to evidence that late-night levies were ineffective.
“They don’t secure the expected revenues, damage the local economy, and get in the way of good partnerships between local businesses, the police, and councils. With these findings, and several local councils backing away from levy plans, I hope others councils learn from this,” she said.
Licensees in the town contacted by the PMA said they weren’t surprised that the council hadn’t raised as much cash as predicted.
One said that there had been no visible changes in policing levels since the levy’s introduction and raised concerns about the money being spent on a proposed alcohol-free venue. “It doesn’t seem to equate that it should be spent in that way,” he said.
Six other councils across England currently have a levy in force: Newcastle, Islington, City of London, Nottingham, Chelmsford and Southampton.