The Alcohol and Entertainment Licensing Branch

The Alcohol and Entertainment Licensing Branch

Tourism Division, 3rd Floor

DCMS

2-4 Cockspur Street

London SW1Y 5DH

21 November 2004

CONSULTATION ON DRAFT FEE LEVELS TO BE ESTABLISHED BY REGULATION UNDER THE LICENSING ACT 2003

Established in 2001 with the support of the Secretary of State for Culture, Media and Sport as the voice of the UK tourism industry, the Tourism Alliance comprises over 40 Tourism Industry Associations that together represent some 200,000 business of all sizes throughout the UK. The Tourism Alliance’s mandate is to work with government on issues relevant to the growth and development of tourism and its contribution to the economy and it is therefore responding to this consultation in that capacity.

The Tourism Alliance is generally supportive of the consultation paper and the principles on which it is based – that licensing fees should be set centrally at a level that provides for cost recovery for the licensing authority and be based on an equitable approach that takes account of regional differences in costs. This approach is in accord with the legal position established through case law that local authorities are not empowered to raise revenue through a licensing scheme.

However, with these principles in mind, the Tourism Alliance would like to state its considerable concern regarding the proposed “Additional Fees” to be charged to license exceptionally large events of a temporary nature requiring premises licences, as set out in paragraphs 7.32 – 7.36 and Table 13 of the consultation document. The charges proposed in this section do not appear to conform to the principles stated in the document as they appear to be neither equitable when compared to other licensing fees, nor based on the actual cost of granting the licence.

As set out in the consultation document, the proposed maximum charge for a premises licence will be £500 (for premises with a rateable value of over £125,000). It is considered that this is sufficient for the inspection costs associated with a premises designed to accommodate a maximum of 5,999 people. However, for events of 6,000 people and over the cost suddenly rises by between £5,000 and £50,000 with little in the way of accompanying justification for this substantial increase.

It would appear that, it developing this proposal, there is a perception that these large events are mainly Glastonbury type concerts, where there is little or no base infrastructure, the temporary buildings are bespoke for the site and therefore have to be inspected by specialists, the event is highly profitable and has high public nuisance costs.

In reality, the majority of large events are held in the grounds on existing attractions with the inherent facilities and management structure that that entails. These events also have very low profit margins (I am aware that the Visitor Attractions Forum estimates that events of around 6,000 attendees generally generate a profit of less than £10,000).

In contrast to the rest of the document which has a considered approach to fee-setting, the proposed cost structure for large temporary events looks as though someone has simply thought that a rate of 50p per person attending this type of event would be “about right”. That the proposed additional fees are not based on actual costs is supported by a simple analysis using the costing assumptions used earlier in the consultation document. Chapter 4 of the consultation document states that the cost of inspections is calculated on the basis of £60 per hours and enforcement activity is calculated on the basis of £45 hour.

Using an average rate of £55 per hour (on the assumption that more time is required to inspect temporary events than to enforce conditions during its operation), for an event with 75,000 people this equates to almost 6 months fulltime work for a licensing authority staff member. Put another way, it is the equivalent to a team of over 40 licensing authority staff undertaking two days of inspection work prior to the event and another day’s worth of enforcement work during the event itself.

Compare this to the maximum of two hours inspection work for one person that the consultation document determines will be required for a premises with a capacity of under 6,000 people and it is obvious that the proposed fee for temporary large events is unjustified. The accompanying text even admits that it is arbitary in nature and “can only be addressed – and possibly adjusted – with experience”.

The Tourism Alliance believes that it is unacceptable to charge event organisers up to £50,000 for a premises licence on the basis of information that is clearly inadequate. The introduction of such a fee structure would jeopardise many outdoor events and the associated benefits to tourism and local communities. Although the consultation document states that these fees will be subject to review, by the time that it is discovered that the fees are disproportionately large, many events may well have been cancelled.

For evidence that the imposition of disproportionately high charges on temporary events will have a detrimental impact on this sector of the tourism industry one need look no further than the guidance issued by the Home Office in April 2000 (HO circular No:13/2000). This guidance states that “There are grounds for concern that particularly high fees and associated costs are deterring some organisers from offering entertainments, with knock-on effects for performers, venues and the wider leisure industry. A thriving public entertainment sector has a role in promoting tourism. It is therefore important to ensure that the burdens imposed by the necessary licensing of these events is justified.”

With this mind, the Tourism Alliance strongly urges that the licensing fees

Proposed for exceptionally large events of a temporary nature requiring premises licences is reconsidered and a more justifiable and equitable approach is adopted. The Alliance would welcome the opportunity to provide expertise from the industry to help the Department for Culture, Media and Sport develop a solution to this issue.

Yours sincerely

Kurt Janson

Policy Director

Tourism Alliance