Rewiring Licensing: Open For Business

National and local frameworks and thedevolved administrationsOne characteristic of the current licensing frameworkis the degree of complexity in terms of licences thatare mandated nationally and others where licensingrequirements have been adopted locally in some areasbut not others.For example, licences to run a pet shop or ridingestablishment, be a scrap metal dealer or establisha caravan site are all mandated nationally, whilelicences for auction premises, massage and specialtreatments, street trading, hairdressers and streetcollections are only necessary if a council has chosento adopt the requirement for a licence. Some councilswant to license these activities and the law allows themto without burdening businesses nationally.This is localist and deregulatory and we are extremelysupportive of this approach. However, the list ofactivities that councils can ‘opt in’ to license is outdatedand does not include modern activities that are now ofconcern to some councils (for example, sunbed use).Updating the legal framework for local licensing, andintroducing future flexibility about the issues councilscan license, would be helpful and reduce the demandfor future Parliamentary time to address specific issues.The devolved administrations are increasingly takinga divergent approach to their licensing schemes.Scotland and Northern Ireland have operated differentlicensing schemes for many years, while Walescontinues to work in a way more comparable toEngland; both are subject to the 2003 Licensing Act.Close consideration will need to be given to therequirements of the devolved administrations, andWales in particular, as the proposals in this report aretaken forward.Licensing and planningCouncils need effective powers to secure economicallyefficient use of land but also the ability to managethe social, environmental and aesthetic impacts oncommunities. In practice, however, the distinctionbetween the role of planning and licensing inproviding these functions is blurred.This results in confusion to businesses and a perceptionof unnecessary duplication of control. It also meanscouncils lack the means to deal with issues such asclustering in an efficient and effective way. Yet residentsexpect councils to have powers to influence the natureof land use and business activity in their areas.Resolving these issues will require greater clarityabout the distinction between licensing and land useplanning in managing how business premises areused. As recent debates on the clustering of bettingshops illustrate, neither the planning use class systemnor licensing framework, operating individually orjointly, enable councils to effectively manage andmitigate the social impact and public protectionaspects of business activity.This is because use classes group together classes ofactivity that have a comparable economic impact onan area and licensing objectives are too narrow.6

We need a further debate about how these issuescan be disentangled to result in use classes thatprovide effective economic regulation and within themtransparent local licensing options to manage thesocial and public protection impacts.The distinction between planning and licensingfunctions needs to be clear, but it is also important thatthe functions are aligned operationally to provide ajoined up and customer focused service to businesses.Many councils are already exploring opportunities toimprove customer service for businesses in this area,for example by joining up planning, licensing andother advice at an early stage through pre-applicationadvice services.Previous reviews of licensingThere have been several reviews of licensing schemesin recent times, from the Better Regulation Taskforcereport that brought in the Licensing Act 2003, to theLaw Commission’s current review of Taxi and PrivateHire Vehicle Legislation. The Penfold Review of 2010considered the relationship between planning andlicensing as part of a wider review, while many ofthe Focus on Enforcement and Red Tape Challengereviews have also touched on areas of licensing.However, these reviews have all looked at specificthemes – whether alcohol and entertainment, taxis andprivate hire, or subject specific issues like scrap metal.There has been no attempt to look across the entiretyof licensing schemes and related control mechanismssuch as permitting and registrations.7This has missed a clear opportunity to learn frompractical experience of other systems, but also to alignthem in a way that makes sense from the point of viewof both licensees and administrators.Some systems, such as the recent Scrap Metal DealersAct 2013, have looked at and incorporated bestpractice from elsewhere, but there is much more thancan be done to clarify our expectations of what alicence does, how it operates, and how we ensurefairness for businesses while reflecting the views oflocal residents.We believe that overall the legislation thatunderpins england’s multiple licensing frameworksis unnecessarily fragmented and frequentlyoutdated. This creates barriers that prevent councilsfrom issuing licences as efficiently as possible,imposing burdens on both businesses and councils.There is an urgent need for a comprehensivereview that identifies where legislation can bescrapped, amended or consolidated to createconsistency in the frameworks underpinninglicensable activities and deregulate wherepossible. A new licensing framework shouldsubsequently be overseen by a single governmentdepartment.

Licensing objectives, councilresponsibilities and communityinvolvementLicensing is essentially permissive, with the presumptionthat a licence will be granted unless specific criteriaare not met. These criteria can often be administrativeand process-focused, with little scope to consider issuessuch as the appropriateness of a business to an area.The Licensing Act 2003 and Gambling Act 2005 dohave more strategic objectives which, if not met, providegrounds to refuse a licence application. However, whilean improvement on the process-based approach, theyare not without their own limitations. More recently, theconcept of cumulative impact has been introduced toalcohol licensing, but this idea remains controversial andis often contested in the courts.It comes as a surprise to many residents that councilsand communities are so restricted in being able toinfluence the type or number of businesses that operatein their areas.Licensing objectivesDifferent licensing frameworks operate to differentoverarching objectives. The 2003 Act has fourlicensing objectives (the prevention of crime anddisorder; public safety; protection of children fromharm; maintenance of public order), while the 2005Gambling Act has three (preventing gambling frombeing a source of crime or disorder, being associatedwith crime or disorder or being used to support crime;ensuring that gambling is conducted in a fair and openway; protecting children and other vulnerable personsfrom being harmed or exploited by gambling).These objectives, broad in approach, but still clearlyoutlining the parameters for granting a licence, serveas a contrast to the majority of licensing frameworksthat either do not have stated strategic objectives and/or where licence criteria are administrative and donot provide scope to consider any local context whengranting a licence.Councils want to promote economic growth andsupport businesses as much as possible. But theyare also entrusted with a much wider range ofresponsibilities that are not reflected in the currentlicensing objectives, which have not kept up withthe delivery of local services and are consequentlytoo narrow.One example is councils’ public health responsibility.Excessive alcohol consumption is estimated to cost theNHS 3.2 billion a year, with additional costs fallingto social services, police and businesses. In 2010/11there were 198,900 hospital admissions directlyattributable to alcohol, an increase of 40 per centsince 2002/3.It is recognised that because health impacts are linkedto consumption and the availability of alcohol, thereis a need for public health bodies to play an activerole in licensing activities; therefore, under the 2003Act, local health bodies are able to contribute tothe licensing process through being a ‘responsibleauthority’.Yet bizarrely, while this link is recognised, there isno scope for health bodies or councils to oppose ormodify an application on health grounds, since thelicensing objectives have not been amended.8

This prevents democratically elected councillors fromreaching decisions based on the health advice of localhealth experts, despite local health bodies nominallybeing involved in the licensing process and evenwhere there is evidence of a clear risk to health. Publichealth is a complex matter when applied to thelicensing of individual premises, but it is important thatit is considered and the current approach is ineffective.Economic objectives too, can be frustrated byrestrictive licensing schemes. Studies have shown thatthe greatest footfall in high streets is generated by adiverse offer of retail, leisure and cultural activitieslocated within close proximity. Recognition thatlicensing can play a place-shaping role, reflected inbroader licensing objectives, could help stimulate localeconomies and increase the desirability of places.Communities and residentsCommunities and residents have a keen interest in thenature and makeup of their area. For many, it will bewhy they chose to live and work there. Councils listento the views and needs of their residents on a dailybasis, whether through formal consultation measuresor informal discussions. This underpins a council’sdemocratic accountability. However, communitiescan find themselves excluded from being able tomeaningfully influence licensing decisions.Councils have made great strides in providing adviceand guidance for individuals and community groupson making licensing representations, but it can still bedifficult to meet the evidential basis required, whichprevents councillors from taking into account the viewsand concerns of local residents.9We believe t

animals and hypnotism performances. Licensing can be defined as formal or official permission from an authority to do something (whether that is owning or using a specific item or carrying on a particular trade); in this paper, we use the term to refer to the collective set of licences, permits, registration and consents issued by councils.