Justice Secretary Kenny MacAskill today gave evidence to Holyrood's Justice Committee on proposed reforms to the licensing system.

The fee regulations put forward by Mr MacAskill, under the new Licensing Act, set limits that allow licensing boards to fully recover their costs – whilst also preventing them from making a profit.

This aims to make the system self funding for the first time. The current licensing system recovers only 63 per cent of running costs from fee income. The rest needs to be met from other council resources.

Speaking ahead of his Committee appearance, Mr MacAskill said:

"We are in danger of opting for a bargain basement licensing system that doesn't meet the needs of Scotland. I believe it's simply wrong that the taxpayer has to subsidise the cost of those who profit from the sale of alcohol and I don't think it should continue.

"Alcohol has serious consequences for our Health Service, our economy and our criminal justice system. Alcohol misuse costs Scottish communities enough already – without them having to pay towards letting others make money out of its sale.

"Those who profit from alcohol have a responsibility to help pay for the costs – for example the cost of Licensing Standards Officers, licensing clerks, and the enforcement of the system – believe this should rightly be met by the trade.

"I have heard all the complaints about us doubling fees and that's simply not true – some parts of the licensed trade have set out to protect their profits under the guise of complaining that fees are too high.

"The fees proposed are fair and reasonable to both the trade and to local authorities. I've set limits for boards to work with and let us not forget this is a brand new licensing system and it is disingenuous to compare the new fee arrangements to what is in place at the moment.

"Let me be crystal clear – I am on the side of the tax-payer, I am on the side of law and order, I am on the side of fairness and I make no apology for that. I find it hard to believe that many people will think it right that the taxpayer foots a big chunk of the bill for all of this, it is after all common sense."

If the regulations are annulled the possible consequences include:

• Starting the transition period without any fees being chargeable - so boards will not have any funding coming in
• Compromising the enforcement of the licensing system - Licensing Standards officers may not be employed and so a valuable source of knowledge and dispute resolution is lost to the trade
• Boards not being able to employ sufficient staff - reducing the amount of advice that can be given to applicants
• Applications not properly completed may simply be sent back rather than additional information being sought by 'phone - having a detrimental impact on the trade

The Licensing (Scotland) Act 2005 reforms the current legislation which dates back to the 1970s.

The aim of the new legislation is to simplify and modernise the existing legislation (the Licensing (Scotland) Act 1976, and the relevant parts of the Law Reform (Misc. Provisions) (Scot.) Act 1990) to balance the rights of the majority of people who drink responsibly against the need to protect local communities from nuisance and crime associated with misuse of alcohol, provide strong monitoring and enforcement powers, establish a more inclusive system for all those with an interest; support responsible members of the licensed trade and allow local flexibility balanced with consistency of decision making.

Each premises applying for a licence to enable them to sell alcohol from 1st September 2009 will need to pay a fee when they submit an application for a "premises licence".

Thereafter there will be an annual fee payable. The transition period for the move to the new system starts on February 1st, 2008, with full implementation – and new licences taking effect from September 1st, 2009.

The Independent research was based on fee information for 2004.

Under the current system the set fees for all premises are – initial licence, valid for three years, costs £172 with renewal for a further three years being £86. The current system does not distinguish between the size of premises.

The limits for fees that boards can set depends on the rateable value. We expect the majority of premises (around 82 per cent) will fall into the lowest 3 bandings (See table).

Further provision is being made so that registered clubs, tourist attractions selling on an off-sales basis, and small hotels/B&Bs which provide alcohol to guests automatically fall into the lowest banding regardless of their rateable value.

The bandings are:

Licensing information

Concern at licensing cost rises

Pub industry representatives have raised concern about a rise in licensing fees, claiming they would force the closure of smaller outlets.

The move will see some premises facing a £2,000 bill for their licence.

Justice Secretary Kenny MacAskill said the move would put communities before profit margins and fairly link the charges to the size of businesses.

Holyrood's justice committee agreed not to block the new measures, which will come into force in autumn 2009.

At present, all pubs pay an initial fee of £172 for a three-year licence, with further fees for renewals.

Under the new regime, premises with a rateable value above £140,000 would pay the maximum charge of £2,000.

Strongly defending the measures at the committee, Mr MacAskill said they would dispense with the "outdated and dogmatic" mindset that selling alcohol was a right.

"It is not," he added. "It is a privilege."

The licensed trade estimated that costs to the sector would rise from £5m a year to £20m.

David Daniel of Punch Taverns, which owns 500 premises in Scotland, said the increases did not reflect the cost of administration of the licence system.

Paul Waterston of the Scottish Licensed Trade Association said pubs were already under pressure because of the smoking ban and the use of alcohol sales by supermarkets as loss-leaders.

'Subsidised' system

"The last thing licence holders need is these fees coming in," he said.

Patrick Browne, of the Scottish Beer and Pub Association, added: "I think there will be marginal businesses that will no longer continue to trade after September 2009, and I think increased costs will be passed back to the customer."

The justice committee's convener, Tory MSP Bill Aitken, decided not to press a motion to block the increases, amid concern that the increases had been brought forward at the last minute.

Mr MacAskill also said the new fees would end the current taxpayer-subsidised licensing system, under which 63% of running costs were met from fees.

He added: "Clearly the licensed trade want that subsidised something-for-nothing system to continue. But the government does not and I would suggest the public do not want it either."

The system – welcomed by local authority umbrella group Cosla – will require a new network of enforcement officers to police the licenses and monitor the impact of pubs and off sales on communities in terms of anti-social behaviour.

Previous Tollcross Articles
Last orders at African café that made dinner for Mandela
Work set to start on £270k gateway to the gardens
Demands for crackdown on pavement clutter 'chaos'