Councils to blame for licensing overspend

Industry leaders have welcomed the long-awaited Elton report into licensing fees, which laid the responsibility for a £97m overspend at councils' doors.

Sir Les Elton, head of the panel, said the Government should meet £43m of the shortfall with local authorities - many of which had gone beyond their remit administrating the new regime - plugging the remaining £54m gap.

The British Beer & Pub Association (BBPA) welcomed the review, saying it highlighted the inconsistent way local authorities had approached the licensing change in the run-up to November 2005. "It raises questions about whether the set-up costs were necessary or justifiable," said Mark Hastings, head of communications at the BBPA. "We need to ensure lessons are learnt."

Widespread fears over a rise in licensing fees have been realised, although the jump of just 7% was welcomed by industry body Business in Sport and Leisure. "We believe that a 7% increase in licence fees for the next three years represents a reasonable settlement," said chief executive Brigid Simmonds.

One recommendation that has worried operators is the proposal to widen the use of fee multipliers. Under the present system, local authorities can apply a fee multiplier to e_SFlbcity-centre pubs and bars that "are exclusively or primarily in the business of selling alcohol". However, the review calls for the definition to be broadened to take in all pubs and clubs that "attract large amounts of enforcement and inspection activity".

Nick Bish, chief executive of the Association of Licensed Multiple Retailers, said: "Our fear is that Tessa Jowell, the Secretary of State for Culture, Media and Sport, will use the multiplier rule to hammer operators with in order to meet the funding shortfall. The Elton Report was not the blank cheque she or the Government had hoped for."

The Government said it would fully consider the recommendations and publish a response shortly.

Elton Review: Key recommendations

• Central Government and councils should pay the £97m shortfall created by the implementation of the licensing regulations in 2005.
• Application paperwork should be simplified.
• An annual licence renewal date should be introduced.
• All councils should accept electronic licence applications.
• Definition of premises attracting the licence fee multiplier should be broadened.
• Premises licence fees should rise 7% from 2007/08.

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By Chris Druce

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