Following a close examination of the fees and local authority spending during the first eighteen months of the new regime, the panel has found that local authorities will have spent more than they received in licensing fees during the first three years. It also found that fee payers incurred higher costs than anticipated.

The panel concludes that there is a shortfall, incurred over three years. £43 million – 20 per cent of the total cost - should be met by central Government. £54 million is due to decisions by some local authorities. The panel therefore recommends this cost should be met by local authorities. 

With regard to future fees, the panel recommends they should increase by seven per cent for the three year period from 2007/08.

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The panel also make a number of other recommendations to streamline the process. These include recommendations that:

• premises where the sale of alcohol is incidental, such as flower shops and books shops selling communion wine, should be exempt from paying fees;
• all local authorities should accept electronic applications;
• fees for exceptionally large events, such as music festivals and country fairs, should be set locally;
• the multiplier on bands  D and E – covering the largest premises - should be redefined;
• the application forms and processes should be simplified; and
• the fees should be reviewed again in three years;

Sir Les Elton said:

“Getting the new licensing system up and running has been a huge undertaking and I congratulate everyone who has made it work. We have found that the new regime is working well and that the vast majority of people we spoke to were positive about the new legislation.

“We have found our task of reviewing the fees regime to be an extremely interesting but a complex one. Most stakeholders have acknowledged that there is no single right answer across all interested groups. We have also been aware throughout the review that benefiting one set of stakeholders can lead to a whole new set of disadvantages for others.

“We have arrived at a set of recommendations which we believe to be based on common sense and to offer a sensible way forward.”

Licensing Minister, Shaun Woodward said:

“I am pleased that the panel thinks the fees model is broadly right.   As the report acknowledges, setting the fees is a complex task.  We based our original estimates on the best information available at the time, but always accepted that fees might have to change in light of actual experience.  That is why we established the panel. 

“The regime has been in place for more than a year and we now have a good examination of the costs so far. We will now look at how we reflect this through the fee structure.

“We will fully consider all the recommendations in the report and publish a response shortly. Once we have reached a decision, we will undertake a full public consultation before making any changes, so licensees, local authorities and the public can have their say.

“I would like to thank Sir Les and the panel members for their hard work over the past 18 months and for their very detailed report.”

The original fees were set following a public consultation. They reflect the evidence provided by more than 400 respondents and work carried out for the department by Price Waterhouse Coopers. Licence fees should be set at a level that allows Local Authorities to recover the legitimate and efficient costs of the administration, inspection and enforcement associated with their functions under the Act. 

Notes to Editors

1. The full final report by the Independent Licensing Fees Review Panel is available online.

2. The panel’s terms of reference were to:

• consider whether the fees cover the full cost to licensing authorities;
• identify the scale, extent and nature of any problem(s) encountered by licensees/licence payers and licensing authorities;
• make recommendations about how the existing fee structure and levels could be developed;
• ensure best practice is being fully realised across all authorities; and
• identify how the regime could be developed to address any other issues, including the impact of the fee scales on community amateur sports clubs and village and community halls.

3. The panel members were as follows:

• Sir Les Elton is a non Executive Director, Port of Tyne Authority. He is a visiting Professor of the Business School, University of Newcastle upon Tyne and was a consultant to several firms and public bodies.  From1984 – 2004 he was the Chief Executive of Gateshead Council and Clerk to Northumbria Police Authority;
• Clive Allen, former Executive Head of Corporate Services, Surrey Heath Borough Council.
• Duncan Bowdler, Head of Trade Liaison, the Co-operative Group;
• Francis Patton, Customer Services Director, Punch Taverns;
• Brian Wilson, Group Director (Thematic Studies and Inquiries), Commission for Rural Communities; and
• Paul Woods, City Treasurer, Newcastle City Council.

The panel was established in summer 2005.

4. Under the licensing system, premises apply for a one-off premises licence and then pay an annual charge for their licence thereafter. The charge is based on the rateable value of the property. The current fee structure for these two payments is as follows:

Rateable value bands                 A      B      C     D    E
Main Application Fee               100  190  315  450  635
Main Annual Charge                  70   180  295  320  350
 
In addition, a multiplier is applied to town and city centre pubs (those in Bands D and E), where they are exclusively or primarily in the business of selling alcohol:

Band                                                         D (x 2)      E (x 3)
City / town centre pub application fee            900          1905
City / town centre pub annual charge             640          1050
 
 
The rateable values that the fee bands are based on are as follows:
 
A: No rateable value to £4,300
B: £4,301 to £33,000
C: £33,001 to £87,000
D: £87,001 to £125,000
E: £125,001 and above
 
5. The full details of the fee structure can be found on the alcohol and entertainment pages of the DCMS website.