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The Nicholson Committee: Review of Liquor Licensing Law in Scotland
CHAPTER 8
FEES
8.1 Section 8 of the 1976 Act provides that the Secretary of State may, by order made by statutory instrument, determine the fees payable by any applicant to a licensing board. It is also provided that those fees, on being paid by any applicant to the board, are to be paid over by the clerk of the board to the council which defray the expenses of that board. The fees payable by virtue of the foregoing provision are currently set out in the Liquor Licensing (Fees) (Scotland) Order 2001, and, to give just some examples, the fee payable on an application for the grant of a new licence is 160.00, the fee payable on an application for the renewal of a licence is 80.00, and the fee payable on an application for regular extension of permitted hours is also 80.00.
8.2 Without exception those licensing boards who have been in touch with us have argued that the present level of fees is inadequate and fails to meet the cost of running the licensing system. It has been said to us that a particularly substantial cost which has to be met is that of advertising the business for board meetings; and we have been shown figures which amply support those complaints. The consequence of this disparity between fee income and actual costs is, of course, that a not insubstantial part of the cost has to fall on ratepayers and council tax payers who derive no benefit from the system other than, perhaps, as customers. Needless to say, the disparity between income and costs would be likely to increase still further if effect is given to our recommendation 1 that in future licensing boards should employ an appropriate number of Liquor Licensing Standards Officers.
8.3 Interestingly, it has come to our notice that the fees payable in respect of another licensed activity, namely gaming, are substantially greater than those applicable to liquor licensing. For example, the fee for the grant of a gaming licence is now 28,915, and the fee for the renewal of such a licence is 7,950. 2 We recognise, of course, that gaming establishments are very different from licensed premises of the kind with which this report is concerned, but the foregoing fee figures suggest that it is not unknown for fees to be fixed at a level which is significantly higher than the present level in respect of liquor licences.
8.4 It will, of course, be necessary to change the fee structure in any event in order to take account of the changes recommended in this report. In future there will have to be fees in respect of applications relating to premises licences and a separate system of fees in respect of personal licences. There may also have to be a somewhat different system of fees in respect of clubs. Since, under our proposals, premises licences will not be subject to any fixed period of validity, and since personal licences will remain in force for a period of ten years, it may be desirable, we suggest, to give consideration to requiring payment of an annual retention fee. Regardless of any necessary changes, however, we are persuaded that there is a case for fixing a fee structure which will, so far as possible, ensure that the licensing system is self-financing. Indeed, that would be consistent with the approach now taken in the civil courts where, as we understand it, the policy is that fees should be fixed at a level which by and large meets the costs of the courts concerned. Some licensing boards proposed that in future individual boards should be entitled to fix their own level of fees, but we are not attracted by that proposal. As we have noted above, some restructuring of the fee system will be necessary in order to take account of the new licensing system which we are proposing; and in our view that is something which ought to be done on a national basis in order to ensure uniformity throughout the country. We also consider that the actual level of fees should be uniform throughout the country, and that can only be achieved if the amounts of fees are determined centrally, as happens at present. We, for our part, are not in a position to say what level of fees will be appropriate in future since that will depend in part on the extent to which effect is given to our recommendations. However, we simply note that, although our proposed licensing system will introduce some additional costs, such as those mentioned above in respect of Liquor Licensing Standards Officers, it will also bring about savings. Under our proposals, for example, the need for large quarterly board meetings will disappear and, since there will also be no need for extensive renewal hearings on a regular basis, advertising costs should diminish substantially. As we have noted above, licensing boards have told us that at present such costs represent a significant proportion of the total costs of the system.
8.5 There is, however, a further consideration in relation to fees which has been brought to our notice by some consultees. It is that, under the present system, the fee which is payable is exactly the same regardless of whether the premises to which an application relates is a small grocery shop or a very large super-pub or night club. It has been represented to us that it is unfair and unacceptable that the same fee should be payable by an operator whose turnover relative to alcohol may only be of the order of 100 a week and one whose turnover in the same period is likely to be many thousands of pounds. We agree with that in principle. However, we do not have the means to investigate how some sort of differential system might be constructed, and we therefore limit ourselves to suggesting that such a system would appear to be worthy of consideration.
8.6 We also regard it as important that the level of fees, however that is devised, should be kept under regular scrutiny - probably annually, or at most every two years - so that fees will always be at a fair and reasonable level. There is, we believe, a risk that the review of centrally determined fees may not be given particularly high priority by government departments, but a failure to maintain a realistic level of fees will simply mean that costs, which should be met by fee income, will have to be borne by ratepayers and council tax payers. That, in our view, is undesirable. Later in this report 3 we propose that in future there should be a National Licensing Forum charged with keeping under regular review all matters relating to licensing law and practice. We consider that one of its tasks might be to offer advice to Ministers as to changes in fee levels which appear to be desirable.
8.7 Taking account of all the foregoing matters, we recommend:
45. (a) The fees payable in respect of liquor licences should continue to be fixed centrally by means of a statutory instrument or other order.
(b) The fees determined as above should, so far as is practicable, be of an amount which will make the licensing system self-financing.
(c) Consideration should be given to devising a system of fees in respect of premises licences which will distinguish between premises of different size and capacity.
(d) The level of fees should be reviewed regularly, preferably annually but no less often than every two years.
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