Preparation used to support the decision making outlined in Short-terms lets legislation: FOI release

Information requested

Under FOISA, please provide the modelling, information, analysis, any calculations and documentation used to support the Scottish Government's decision making, outlined in Short-term lets - licensing scheme and planning control area legislation: draft business and regulatory impact assessment (BRIA) [https://www.gov.scot/publications/short-term-lets-licensing-scheme-planning-control-arealegislation- draft-business-regulatory-impact-assessment-bria/] that:

• "60. We did carefully consider industry suggestions for a registration scheme.";
• "we did not regard these as viable alternatives.";
• "65. In summary, the Scottish Governments’ view was that a registration scheme would not be ready in sufficient time and risked being either cheap and ineffective or a more expensive way of delivering the benefits of the licensing scheme. "; and,
• "68. The Scottish Government’s view is that this proposal either does or does not provide the same protections as licensing."

This should include the granular detail of the information officials relied on, either provided to the government, or collated or generated through its own officials' research conducted, or requested from other sources, including data about applications, costs, and enforcement activity, or the likely costs of the alternatives.

Please also provide the relevant briefing papers which support the position used internally (for ministers and officials) including any communication discussing the position or requests for clarification.

Response

Ahead of responding to your specific questions, I thought it may be helpful if I provide some brief background on the development of our regulatory proposals for short-term lets.

You can find the consultation papers, reports, research and information about our Short Term Lets Stakeholder Working Group here: Short-term lets: regulation information - gov.scot (www.gov.scot). We have also published all the consultation responses from the 2019 and 2020 consultations and will do the same for the 2021 consultation.

We first consulted on a broad regulatory framework for short-term lets in 2019. We received over 1,000 responses. In parallel, we conducted independent research on the impact of short-term lets on communities. Following careful consideration of the evidence provided by the research and consultation responses, the then Minister for Local Government, Housing and Planning announced a package of regulatory proposals in January 2020 for short-term lets, which included a mandatory licensing scheme for all short-term lets across Scotland.

Therefore, in considering your request I have carried out searches for information relating to registration, prior to the decision to proceed with a mandatory licensing scheme, announced in January 2020. In addition, I have also carried out searches in accordance with your request relating to proposals for an alternative licensing exemption for registered accommodation, as proposed by the ASSC to the working group in 2021.

We are currently carefully considering responses to our third public consultation on short-term lets, which closed on 13 August 2021, ahead of making further revisions to the Licensing Order, before it at the Scottish Parliament in November 2021. I draw your attention to the Cabinet Secretary for Social Justice, Housing and Local Government’s letter to the Local Government, Housing and Planning Committee of 7 October which set out some changes to the proposed legislation. An updated BRIA will be published alongside the Licensing Order.

"60. We did carefully consider industry suggestions for a registration scheme."; "we did not regard these as viable alternatives.";

To quote paragraph 60 in full:
60. We did carefully consider industry suggestions for a registration scheme. We also considered proposals for an exemption from the requirement to obtain a licence for hosts and operators who were registered, which were put forward by industry to the stakeholder working group. Below we set out why we did not regard these as viable alternatives.

We did consider registration as an alternative to licensing. However, this would have required primar legislation. As set out in paragraph 62 of the BRIA:  Development and Parliamentary consideration of a Bill, followed by secondary legislation and an implementation period, would push back regulation by several years. The Scottish Government’s view was that such a timetable was too slow when the 1982 Act provided a suitable mechanism for regulation.

The 2019 consultation information and responses and research were used to develop the policy objectives and requirements that any registration or licensing scheme needed to meet. At that stage, the focus was on identifying the functions required of any regulation. Once we had established that a licensing scheme established through secondary legislation under powers in the 1982 Act could deliver the policy objectives, registration was not considered again until the ASSC exemption proposal was put forward in April 2021.

"65. In summary, the Scottish Governments’ view was that a registration scheme would not be ready in sufficient time and risked being either cheap and ineffective or a more expensive way of delivering the benefits of the licensing scheme. ";
"68. The Scottish Government’s view is that this proposal either does or does not provide the same protections as licensing."

The timetabling concern is discussed at paragraph 7 above. As explained at paragraphs 68 and 69 of the BRIA in respect of the exemption proposal (which applies equally to a standalone) registration scheme:
68. The Scottish Government’s view is that this proposal either does or does not provide the same protections as licensing. If the same protections as licensing are afforded, then the proposal could not be less onerous, unless there was an assumption that the scheme administrator would be more efficient than licensing authorities. Licensing authorities are experienced in delivering various licensing schemes, and able to provide a good value way of providing the required level of assurance.

69. If the same protections as licensing are not afforded, then the proposal does not deliver Ministers’ policy intentions.

Paragraph 68 of the BRIA relates to the alternative exemption for registered accommodation proposal received by Scottish Government from the ASSC in April 2021 and circulated to the Short Term Lets Stakeholder Working Group for the meeting in May 2021. The Working Group was established in February 2021. The terms of reference of the Working Group were clear that it was out of scope to debate whether or not to implement a licensing scheme. However, we did carefully consider the exemption proposal put forward by the ASSC.

As explained in paragraph 66 of the BRIA, the exemption proposal would require the same basic safety standards as required for licensing. However, the proposal does not appear to include provision for a fit and proper person test, or for additional conditions to be attached to the registration. These are important components of the licensing scheme which a parallel registration scheme would undermine. Our licensing proposals provide local authorities with powers to add further conditions, where necessary, to address local needs and concerns.

The proposed exemption would also have required further secondary legislation, potentially delaying the introduction of powers to address what remains, for many residents and communities, a pressing issue.

Attached

• Short-Term Lets Working Group: Meeting 3: Paper 4: ASSC Note & Proposed Amendments (May 2021). You can find a note of the discussion of the May meeting of the working group here: Short Term Lets Working Group papers and minutes: May 2021 - gov.scot (www.gov.scot)

Section 30(b)(i) – free and frank provision of advice in relation to Ministerial and official discussions and policy formulation and development & Section 30(b)(ii) – free and frank exchange of views for the purposes of deliberation in relation to Ministerial and official discussions and policy formulation and development.

An exemption under section 30(b)(i) of FOISA (free and frank provision of advice) applies to some of the information requested. This exemption applies because disclosure would, or would be likely to, inhibit substantially the free and frank provision of advice. This exemption recognises the need for officials to have a private space within which to provide free and frank advice to Ministers and other officials before the Scottish Government reaches a settled public view. Disclosing the content of free and frank advice on the development of the regulatory framework for short-term lets in Scotland will substantially inhibit the provision of such advice in the future, particularly because the full regulatory framework is still being developed and covers sensitive or controversial issues such as the scope of the regulatory framework and the commitment to review the tax treatment of short-term lets to ensure that they make an appropriate contribution to the communities that they operate in.

An exemption under section 30(b)(ii) of FOISA (free and frank exchange of views) also applies to some of the information requested. This exemption applies because disclosure would, or would be likely to, inhibit substantially the free and frank exchange of views for the purposes of deliberation. This exemption recognises the need for Ministers and officials to have a private space within which to discuss and explore options before the Scottish Government reaches a settled public view. Disclosing the content of free and frank discussions on the development of the regulatory framework for short-term lets in Scotland will substantially inhibit such discussions in the future, for the same reasons as given above.

These exemptions are subject to the ‘public interest test’. Therefore, taking account of all the circumstances of this case, we have considered if the public interest in disclosing the information outweighs the public interest in applying the exemption. We have found that, on balance, the public interest lies in favour of upholding the exemption. We recognise that there is a public interest in disclosing information as part of open, transparent and accountable government, and to inform public debate. However, there is a greater public interest in allowing a private space within which officials can provide full and frank advice to Ministers and other officials, as part of the process of exploring and refining the Government’s policy position on the development of the regulatory framework for short-term lets in Scotland, until the Government as a whole can adopt a policy that is sound and likely to be effective. This private thinking space is essential to enable all options to be properly considered, based on the best available advice, so that good policy decisions can be taken. Premature disclosure is likely to undermine the full and frank discussion of issues between Ministers and officials, which in turn will undermine the quality of the policy making process, which would not be in the public interest.

Section 36(1) – legal advice
An exemption under section 36(1) of FOISA (confidentiality in legal proceedings) applies to some of the information requested because it is legal advice and disclosure would breach legal professional privilege. This exemption is subject to the ‘public interest test’. Therefore, taking account of all the circumstances of this case, we have considered if the public interest in disclosing the information outweighs the public interest in applying the exemption. We have found that, on balance, the public interest lies in favour of upholding the exemption. We recognise that there is some public interest in release as part of open and transparent government, and to inform public debate. However, this is outweighed by the strong public interest in maintaining the right to confidentiality of communications between legal advisers and clients, to ensure that Ministers and officials are able to receive legal advice in confidence, like any other public or private organisation.

About FOI
The Scottish Government is committed to publishing all information released in response to Freedom of Information requests. View all FOI responses at http://www.gov.scot/foi-responses.

FOI202100232330 - Information released

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