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The Licensing (Scotland) Bill: A Consultation on Liquor Licensing

Chapter 12
Fees

The Nicholson and Daniels Reports

The Nicholson Report notes that a new fee structure will be required for the new system. The Report recommends that fees should continue to be set centrally and reviewed every 1 or 2 years, that the system should as far as possible be self financing and that different levels of fees for clubs and premises of varying size and capacity would be appropriate. The Daniels Report recommends that we undertake financial modelling to determine the extent to which costs can be recouped through the licensing fee.

Consultation Summary

There were around 39 responses on fees, half from Licensing Boards. A majority agreed that the system should be self financing although there were concerns about the cost of Liquor Licensing Standards Officers and suggestions for annual retention fees. Views were evenly split on whether fees should be set centrally or locally. It was felt that fees for a self financing system should be set locally to reflect cost differences based on geography and number and type of premises. There was broad agreement that we should establish different fee levels for different types of premises but further work needed on how that should be done.

Our Approach

There are three key issues. The first is how far the licensing regime can be self financing without the costs of a licence becoming untenable. The current licence fee is £160 and should certainly be substantially increased, particularly since premises licences will be open-ended. The key new burden on local authorities would be the costs of Liquor Licensing Standards Officers, however, this will be offset by the reduction in some other administrative costs.

The second issue is how we can fund the system properly by spreading some of the income. If premises licences are open ended there will be no continuing fees. We need to consider the options.

The third issue is the argument some Boards make for locally rather than centrally set fees. This is on the basis of local fluctuations in costs.

We cannot resolve all of these issues now. However, on the issue of locally or centrally set fees, we disagree that local fee setting will provide the best mechanism to reflect differential local costs. Although local costs may be different, the number of licences and fee income will also vary substantially. We therefore need to ensure that we set fees at a suitable level but believe this should be done within a coherent national framework.

On funding the system, we intend to ask the Expert Group to review the fee system, to consider further what level of fees is required to cover the costs of the new system and to consider further how this can be achieved without placing an unnecessary burden on small businesses. Our preference, in line with policy in other areas, must be for full cost recovery through the licensing fee.

We support the principle of graduated fees for different types of premises. There will also require to be different fees for premises licences and licence variations, etc.

In addition, we believe there will be a need for a retention fee and will ask the Expert Group to consider how a retention fee for premises licences might be charged.

In the meantime, and after consultation with COSLA, we have agreed to raise licence fees to reflect inflation.

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