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Table of contents

On 17 May 2023 the House of Lords is due to debate the following motion:

Baroness McIntosh of Pickering (Conservative) to move that this House takes note of the report from the Liaison Committee, ‘The Licensing Act 2003: post-legislative scrutiny follow-up report’.

1. Licensing Act 2003

The Licensing Act 2003 substantially altered the legal regime governing the sale of alcohol, replacing licensing provisions across 10 different statutes and unifying them in one piece of legislation.

The act regulates four licensable activities, namely the sale and supply of alcohol, the supply of alcohol in clubs, provision of regulated entertainment, and provision of late-night refreshment. In doing so, the act liberalised alcohol licensing and transferred authority for licensing from the judicial system to local authorities, establishing licensing committees to make decisions on enforcing the provisions of the act.

Key aims of those reforms to the licensing regime were, according to the government at the time, to prevent crime and disorder, increase public safety, prevent public nuisance and protect children from harm.

The Licensing Act 2003 only applies to England and Wales. Alcohol licensing is a devolved matter in Scotland and Northern Ireland. The act came into force in November 2005.

2. Select committee on the Licensing Act 2003 (2017)

The House of Lords Select Committee on the Licensing Act 2003 conducted post-legislative scrutiny in 2017. The 2003 act had been in force for 11 years, during which time the committee said “hardly a year [had] gone by without major reforms to the act”.

The committee was critical of several areas of the implementation of the act. This included the creation of new licensing committees for each of the 350 local authorities. The committee said councillors sitting on these new committees, and the staff assisting them, “had no experience of the complex new law they were administering”. As a result, the committee said that “too often standards [fell] short” and called for mandatory training to be introduced for those involved in these decisions.

In contrast to these new bodies, the committee said that local authority planning committees were well established, with better support from experienced staff. Thus, the select committee said its main recommendation was that there should be a trial merger of licensing committees with planning committees. The select committee also recommended that planning inspectors should hear licensing appeals.

The committee also noted changes implemented between 2005 and 2017, which it said had “greatly increased” the powers of the police to deal with crime committed by those under the influence of alcohol. For instance, closure powers and powers of summary and expedited review. The committee said that it did not dispute that those powers were required in some cases. However, it said that they “must be accompanied by appropriate safeguards when the livelihood of the licensee is at risk”. For example, the committee said that magistrates should be given better supervision of the exercise of police powers when dealing with alcohol related incidents.

The select committee also noted the increase in the sale of alcohol from off-licences and supermarkets, including high-strength alcohol at very low prices, which it said had driven antisocial behaviour and disorder. The committee called on England and Wales to follow similar measures introduced in Scotland to curb those issues, including restrictions on multi-pack pricing and drinks promotions.

On the later opening hours introduced by the 2003 act, including the possibility of 24-hour opening, the committee said these “have led to a thriving night-time economy in many cities”. However, the committee was critical of the powers offered to local authorities to deal with the associated problems, including early morning restriction orders and late night levies, both of which it said should be repealed unless they could be made more effective. The committee also made several other recommendations on issues such as live music, and airside and portside sales.

In summary, the committee said:

[O]ur conclusion is that, while the implementation of the act leaves a great deal to be desired, to a large extent this is caused by an inadequate statutory framework whose basic flaws have, if anything, been compounded by subsequent piecemeal amendments. A radical comprehensive overhaul is needed, and this is what our recommendations seek to achieve.

3. Key findings of the Liaison committee’s follow-up report (2022)

The House of Lords Liaison Committee published its post-legislative scrutiny follow-up report in July 2022. It found that flaws in the licensing system remained unresolved and again that significant reform was required.

The Liaison committee’s inquiry focused on the areas summarised below.

3.1 Coordination of the licensing and planning systems

Despite guidance and policy changes implemented since 2017, the Liaison committee found that coordination between the licensing and planning systems had not improved, resulting in continued inconsistency and a lack of joined-up decision-making. It also said that, despite commitments made by ministers to ensure that the licensing and planning systems were briefed on their responsibilities to work together effectively, there had been no practical progress and “no initiative from government to take forward the work undertaken to explore solutions”. The committee recommended that the government should work with key stakeholders to establish a clear mechanism for the licensing and planning systems to work together and communicate successfully.

3.2 ‘Agent of change’ principle

The committee said that a key example where the need for coordination between the licensing and planning systems was apparent was the application of the ‘agent of change’ principle. In other words, that those seeking to build a new development (ie the ‘agent of change’) should be required to provide suitable mitigation to ensure that any such development is integrated effectively with existing businesses and community facilities such as pubs and music venues. The 2017 committee had recommended its introduction into planning guidance and the Liaison committee echoed that recommendation. However, it also said the government should also go further:

The 2017 recommendation focused on the adoption of the ‘agent of change’ principle into guidance, however we have heard that the principle as it stands is inadequate and does not sufficiently explain the duties of all parties involved and needs to go further to protect licensed premises and local residents in our changing high streets, and to prevent continuing uncertainty and inconsistency. The government should review the ‘agent of change’ principle, strengthen it, and consider incorporating it into current planning reforms in the Levelling-up and Regeneration Bill to prevent further uncertainty.

The committee added that any changes to the ‘agent of change’ principle should then be reflected in guidance issued under section 182 of the 2003 act (known as section 182 guidance).

3.3 Training for those in the licensing sector

As identified in the 2017 report, the Liaison committee again said that training across the licensing sector was crucial to tackling issues of consistency and confidence in licensing decisions. The committee said it welcomed the work of the Institute of Licensing, Local Government Association and government to develop councillor training since the publication of the 2017 report. However, the Liaison committee said there was “no clear sense that training has resulted in improvements in the licensing system”.

As such, the committee reiterated the original inquiry’s recommendations for the Home Office to work with stakeholders to establish a minimum training standard for councillors, including a refresher training standard. It said this agreed minimum standard should be set out in section 182 guidance, and councillors who are members of a licensing committee should be prohibited from taking part in licensing committee or sub-committee proceedings until this minimum standard had been met.

3.4 Access to licensed premises for disabled people

The Liaison committee said that it found “the lack of progress in improving access [for those with disabilities] to licensed premises unacceptable”. It echoed the findings of the previous committee that the law should be amended to require that an application for a premises licence should be accompanied by a disabled access and facilities statement.

The committee added that if the government did not believe the Licensing Act 2003 was the right mechanism to bring about change, it was imperative that it reviewed the provisions of the Equality Act 2010 in consultation with disabled peoples’ charities and organisations to ensure accessibility to licensed premises was improved. The committee welcomed the appointment of a hospitality disability and access ambassador and said it hoped this role would champion the reforms needed.

3.5 Night-time economy

The committee echoed the conclusion of the 2017 report on the positive impact of the industry-led initiatives which have been put in place to support the night-time economy.

In evidence to the 2022 Liaison committee on the night-time economy, then Home Office minister Kit Malthouse had said that the local alcohol action areas programme—designed to tackle the harmful effects of irresponsible drinking—was a “useful tool” but which had “run its course in its original form”. Consequently, the committee recommended that the government should provide an update on any replacement to local alcohol action areas within two years.

In addition, the committee said that if the government was to retain the late night levy—allowing licensing authorities to raise a contribution from late-opening alcohol suppliers towards policing the night time economy—then amendments made to it under the Policing and Crime Act 2017 needed to be consulted on as a “matter of urgency” and brought into force. The committee also recommended that within three years of the provisions being implemented, the government should consult local authorities, businesses and interested parties on the impact of the amended levy. If there is not a demonstrable improvement of the impact and uptake of the levy, the committee said it would “continue to recommend that it be abolished”.

The committee also said that it continued to recommend that local authorities consider the use of business improvement districts (BID) and other initiatives to support the night-time economy.

3.6 Pricing and taxation of alcohol

Following the introduction of minimum unit pricing (MUP) for alcohol in Scotland and Wales, the committee recommended that the government undertake a formal review of its impact to assess the benefit of implementing it in England.

3.7 Sale of alcohol airside

The committee said it was “surprised and disappointed” by the decision of the government not to proceed with licensing airside. Due to the “potential danger posed by excessive alcohol consumption airside, and the resulting disruptive incidents”, the committee recommended that the government commit to review their decision on licensing airside within three years.

3.8 Application systems for online licensing and a national database for personal licence holders

The committee said that the future of the government’s online licensing platform must be determined and an alternative established before it is removed.

The committee also recommended that the government proceeded with its proposed review of adding records of refused, suspended and revoked personal licences to the national register of taxi and private hire vehicles revocations and refusals. The committee said if this approach was found not to be suitable, the government should review whether to establish a national database of personal licences.

4. The government’s response to the Liaison committee’s report (2022)

The government published its response to the Liaison committee’s report in November 2022. In it, the government said it believed that the Licensing Act 2003 set out an effective legislative framework to “regulate licensable activities nationally balanced with considerable local autonomy allowing areas to develop their own localities and economies based on their unique character and needs”. It added that the act was kept under review and that the government continued to work with licensing practitioners to “ensure the regime remains fit for purpose and meets emerging challenges such as new digital technologies”.

The government response added that several actions had been taken since the original select committee reported, including a “substantial” review of section 182 guidance on the relationship between the planning and licensing systems and engagement with stakeholders on the issue of airside sales and drunk and disorderly passengers.

In response to the Liaison committee’s recommendations on the relationship between the licensing and planning systems, the government said it agreed that coordination was important. However, it added that “the systems are separate, with two very different and distinct objectives and approaches”. Further, it contended that processes already existed for coordination between the two systems to meet the needs and aspirations of local communities and said that ministers did not intend to introduce an additional mechanism.

On the ‘agent of change’ principle, the government said that it agreed with the committee’s recommendation on its inclusion in section 182 guidance and said that it would publish such updated guidance later in 2022. (Such revised guidance was published in December 2022.) At the same time, on strengthening the ‘agent of change’ principle and incorporating it further into planning reforms, the government said that it was already included in the National Planning Policy Framework (NPPF) meaning that planning policies and decisions should ensure that new development could be integrated effectively with existing businesses and community facilities. The government added that it was ultimately for the local planning authority to determine applications for planning permission in accordance with the development plan, unless material considerations indicated otherwise. The NPPF must be considered in preparing the development plan and is a material consideration in planning decisions.

In response to the committee’s points about training, the government said that it continued to recognise the importance of effective training for all professionals involved in the licensing regime. However, it said that it did not intend to introduce a formal minimum standard for training or put in place prohibitions on participation. It said that it would continue to work with providers to ensure that training was available and adequately signposted.

On access to licensed premises for disabled people, the government said that it recognised several challenges remained. However, it said that its position remained that the Licensing Act should not be used to control other aspects of licensed premises or ensure compliance with other legislation such as the Equality Act 2010. The government said it did not consider it necessary to take new legislative or regulatory measures in addition to the existing legislation. It said that the failure by a licensed premises to make such adjustments amounts to direct discrimination and a court may require remedies and award compensation to the affected disabled person in such cases where such adjustments were assessed as being reasonable. It added that the government had commissioned a full review of the building regulations relating to access to and use of buildings. This included a research programme on the prevalence and demographics of impairment in England and ergonomic requirements and experiences of disabled people.

On the night-time economy, the government said that, while the local alcohol action areas approach had been successful, “we think that it has run its course and have no plans to replace the programme”. It added that, as the committee noted, there were now many initiatives which the hospitality sector has in place to support the night-time economy. The government said that it would continue to engage with the sector and consider other ways in which local areas could be supported to reduce alcohol harms. Additionally, on the late night levy, the government said that it intended to deliver its commitment to consult on the level of the levy “at the earliest opportunity”. Further, the government said it was supportive of local authorities considering if and how a BID may further support their night-time economy.

Responding to the committee’s recommendation on the pricing and taxation of alcohol, the government said it would consider the findings of the forthcoming evaluation of minimum unit pricing in Scotland once they were available.

On the airside sale of alcohol, the government said the information and evidence submitted to its call for evidence on this issue in 2021 “did not make a compelling case” for extending the provisions of the Licensing Act 2003 to airside sales. It said that ministers did not intend to revisit this decision.

On application systems, the government said that it agreed that managing the removal of the licensing application platform should not have an undue negative impact on the licensing process. It said it had appointed a team to “identify and implement the best solution”.

Finally, on a national database for licence holders, the government said that it recognised the importance of establishing a record of refused, suspended and revoked personal licences. It said that it would continue working with key partners to identify the most effective way of delivering such a database.

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Cover image by Louis Hansel on Unsplash