Publication - Guidance

Licensing (Scotland) Act 2005 section 142: guidance for licensing boards and local authorities

Published: 16 Apr 2007
Directorate:
Justice Directorate
Part of:
Law and order
ISBN:
9780755966080

Guidance on section 142 of the Licensing (Scotland) Act 2005 for licensing boards and local authorities.

94 page PDF

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94 page PDF

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Contents
Licensing (Scotland) Act 2005 section 142: guidance for licensing boards and local authorities
3. The Overprovision Assessment

94 page PDF

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3. The Overprovision Assessment

Overprovision: the previous law

29. In terms of Section 17(1)(d) of the Licensing (Scotland) Act 1976, a Licensing Board must refuse an application for a new licence if, having regard to:

"(i) the number of licensed premises in the locality at the time the application is considered; and
(ii) the number of premises in respect of which the provisional grant of a new licence is in force,

the Board is satisfied that the grant of the application would result in the overprovision of licensed premises in the locality."

30. The Nicholson Committee's Report concluded that this approach to overprovision results in a "largely arithmetical exercise" which is "imprecise and unworkable in any meaningful sense". As interpreted by the Court, it requires Licensing Boards to examine the facilities which the holders of licences in the locality are authorised to provide in terms of Schedule 1 to the 1976 Act. That authorisation is expressed in general or economical terms, particularly in relation to public house, hotels and off-sales. For example, the holder of a public house licence is simply "authorised to sell by retail alcoholic liquor for consumption on or off the premises". Subject to the provision of a minimum number of letting bedrooms, a similar authority is conferred on the holder of a hotel licence. An off-sale licence authorises the holder "to sell by retail alcoholic liquor for consumption off the premises only".

31. The Court has also said that the Licensing Board is not entitled to take account of the particular way in which each licence holder is in fact operating the premises or the facilities which an applicant proposes to provide.

32. This approach has produced undesirable results:

  • the Licensing Board is disabled from drawing distinctions between different proposals, for example:
    • premises operating in the style of a high quality restaurant with a limited bar facility and a so-called "vertical drinking establishment" would both require to be the subject of a public house licence, although the latter is exclusively or predominantly used for the consumption of alcohol;
    • a small delicatessen offering a limited range of wines and spirits complimentary to specialist groceries, or a florist's shop with a limited range of champagne, cannot be distinguished from a large off-sales warehouse.
    • No account may be taken of the capacity of licensed premises. A "superpub" capable of accommodating 500 customers cannot be distinguished from a small, traditional public house.

The new approach to licensing and overprovision

33. The Act sets out a new approach to licensing and overprovision. In particular it:

  • ends the seven fixed categories of licences;
  • introduces a single premises licence, based on an operating plan which gives a clear outline of an applicant's intentions and which may be modified and/or subjected to conditions;
  • requires Licensing Boards to take a pro-active position on overprovision and identify those localities in which it would not propose to grant new licences or licences for premises of a particular description;
  • allows Licensing Boards to take account of the "particular description" of premises (that is to say, their styles of operation) when assessing overprovision; and;
  • directs Licensing Boards to have regard to the number and the capacity of licensed premises in localities.

34. This approach:

  • allows Licensing Boards to take account of changing market trends, such as the development of so-called "hybrid" premises;
  • provides potential entrants to the market with a clear signal that they may incur abortive costs if they intend to apply for a licence in a locality which the Licensing Board has declared to have reached overprovision;
  • improves public and licensed trade confidence in a system by setting out clearly the grounds on which overprovision should be determined.
  • recognises that halting the growth of licensed premises in localities is not intended to restrict trade but may be required to preserve public order, protect the amenity of local communities, and mitigate the adverse health effects of increased alcohol consumption resulting from growing outlet density.

A policy on overprovision

35. Section 7 of the Act requires each Licensing Board to include in its policy statement:

"a statement as to the extent to which the Board considers there to be an overprovision of -

(a) licensed premises, or

(b) licensed premises of a particular description,

in any locality within the Board's area."

36. The Licensing Board must have regard to (a) "the number and capacity of licensed premises in the locality"; and (b) consult the persons specified in Section 7(4) of the Act:

"(a) the appropriate chief constable.

(b) such persons as appear to the Board to be representative of the interests of -

(i) the holders of premises licences in respect of premises within the locality,
(ii) persons resident in the locality, and

(c) such other persons as the Board thinks fit."

41. Section 6(3) of the Act requires the policy statement to seek to promote the licensing objectives:

  • preventing crime and disorder;
  • securing public safety;
  • preventing public nuisance;
  • protecting and improving public health; and
  • protecting children from harm.

37. The duty to consult is subject to the over-arching obligation set out in Section 6(3)(b) of the Act. This means that the Licensing Board is also required to consult the Local Licensing Forum established for the whole of the Board's area and, where not represented on the Forum, those who appear to be representative of the interests in that area of:

  • the holders of personal licences;
  • persons having functions relating to health, education, education or social work;
  • young people;
  • persons resident in the Forum's area.

38. Members' clubs may be discounted for the purposes of overprovision assessments carried out by Licensing Boards provided they meet the criteria in terms of regulations made under Section 125 of the new Act.

39. Section 7 provides that references to "licensed premises" do not include references to premises which are the subject of an occasional licence.

Determining localities

40. An assessment of overprovision for the purposes of the 1976 Act has normally resulted in Licensing Boards selecting localities by reference to the town or city centre in which the premises will be situated or by taking a radius from the application premises or site.

41. The Act inverts this approach. In formulating its overprovision assessments the Licensing Board should closely scrutinise the provision of licensed premises across the whole of its area and then proceed to determine those localities which it proposes to examine. It is not necessary to divide the whole of the Board's area into separate localities.

42. The process by which the selection exercise is carried out is largely a matter for the Licensing Board and will no doubt involve the use of its own local knowledge. A locality could, for example, consist of a particular town, a city centre are, a street, a collection of streets or a council ward.

43. The identification of localities could be approached in a number of ways. The Licensing Board may consider that information which the chief constable is capable of providing is a reasonable starting point. The chief constable will be able to:

  • identify "hotspot" areas within the Licensing Board's area where it can demonstrate that crime, disorder and nuisance are caused by customers of a concentrated number of licensed premises;
  • suggest other areas in which the number of licensed premises or premises of a particular description is moving closely towards overprovision; and
  • provide the Licensing Board with the geographical boundaries of those areas.

44. Once the Board has made this initial assessment and decided localities upon which to focus, it should identify the number of licensed premises, or premises of a particular description, in those localities; determine their capacities; and fulfil its consultation obligation.

A duty to consult and gather evidence

45. The Licensing Board's duty to carry out wide-ranging consultation prior to the formulation of overprovision assessments (see paragraph 37) illustrates the importance of partnership working in the achievement of the licensing objectives.

46. As well as consultation with representative bodies and organisations, Boards may wish to hold well-publicised 'open meetings' in particular localities at which members of the community can be afforded an opportunity to express their views on the formulation of policy.

47. The results of all consultation should be evaluated to identify robust and reliable evidence which suggests that a saturation point has been reached or is close to being reached, always provided that a dependable causal link can be forged between that evidence and the operation of licensed premises in a locality. Factors which the Licensing Board may take into account include:

  • the information provided by the chief constable;
  • subject to the constraints of data protection legislation, CCTV footage supplied by the chief constable or another source which illustrates disorder associated with the dispersal of customers in any locations;
  • evidence from the licensed trade that the density of licensed premises in the locality has resulted in levels of competition which have applied downward pressure on the price of alcohol;
  • evidence gathered from local residents of anti-social behaviour associated with licensed premises;
  • information from the local authority's Environmental Health Department about noise complaints which can be attributed to the operation of licensed premises in a locality;
  • data supplied by the NHS Board or other health bodies, for example, local Accident and Emergency Departments or Alcohol Action Teams.

48. It will not normally be appropriate to arrive at a decision based on one particular factor alone; but rather consideration should be given as to whether aggregated information and evidence from a number of sources points compellingly towards a particular conclusion.

49. The Licensing Board should not take into account:

  • the manner in which individual premises in a locality are managed, since it is possible that well-managed premises may act as a magnet for anti-social behaviour, or may eject a substantial number of customers who collectively produce disorder and nuisance to a degree which is unacceptable;
  • any concerns as to the quality of management of individual premises, which should separately be addressed through other statutory mechanisms;
  • the need or demand for licensed premises in the locality. Commercial considerations are irrelevant to a policy which is designed to protect the wider public interest; or
  • the hours during which licensed premises in the locality trade, since these will be controlled through operating plans.

50. The Licensing Board's policy should be expressed in such a way that interested parties are left in no doubt as to the reasons for its adoption, including the evidence upon which the Board reliedand the material considerations which were taken into account.

Licensed premises or premises of a particular description

51. The consultation carried out by the Licensing Board may disclose that communities are placed under stress only by licensed premises sharing certain characteristics: for example, a concentration of off-sales in a residential area, or the density of "vertical drinking establishments" in a town centre. The Board should therefore consider carefully whether it wishes to state that overprovision exists in any locality simply having regard to the number of licensed premises and their capacities. Such an approach should only be adopted in exceptional circumstances. Proper regard should be given to the contrasting styles of operation of different licensed operations and the differing impact they are likely to have on the promotion of the licensing objectives. A policy which discourages premises where the primary activity is the consumption of alcohol may leave room for the introduction of licensed premises which are likely to produce positive benefits for the locality or which will have a neutral impact on the those objectives.

52. The Board must decide how it wishes to categorise premises by description. While the single premises licence introduced by the Act removes the seven fixed categories available under the 1976 Act system, it is still possible to differentiate premises according to the facilities which they provide for the sale and/or consumption of alcohol. For example:

  • "vertical drinking establishments" are distinguishable from those catering predominantly or exclusively for persons taking meals;
  • nightclubs are likely to have a more significant impact on town centres, city centres and communities than concert halls and theatres, although all may have a large capacity and provide entertainment;
  • the Licensing Board would be entitled to decide that premises specialising in adult entertainment such as lap-dancing and pole-dancing were entirely distinct from other entertainment venues;
  • in recent years, "chameleon" premises have developed in which the facilities offered during the day are markedly different from those provided in the evening, with, for example, a switch from a food-led operation to a nightclub style of operation;
  • a town or city centre hotel may have little or no impact on the licensing objectives and produce benefits for tourism and the local economy, while a hotel in a residential area with few letting bedrooms and extensive bar facilities may have a negative impact on the amenity of local residents;
  • in rural areas a hotel whose trade is mainly derived from bar sales may provide a valuable local function;
  • large supermarkets serving catchment areas larger than the localities in which they are situated and delicatessens selling speciality foods with a limited range of wines and spirits for consumption off the premises can be distinguished from shops devoted to off-sales and local convenience stores selling a general range of groceries. Convenience stores may provide an essential local service in some communities, particularly those with an elderly population where transport considerations make it difficult for residents to take advantage of more extensive shopping facilities available at large supermarkets in adjoining localities.

Summary

53. The formulation of the statement required by Section 7 of the Act involves the following process:

  • the selection of appropriate localities based on a broad understanding of provision across the Board's area;
  • the identification of the number of licensed premises or premises of a particular description in those localities and their capacities;
  • consultation with the relevant persons;
  • an assessment of the information gathered from those persons, taking into account only relevant considerations and material which has a proper evidential base; and
  • reaching a decision as to whether it can be demonstrated that, having regard to the number and capacity of licensed premises or licensed premises of a particular description in a locality, it is undesirable to grant further licences or further licences for premises of a particular description on the ground of overprovision;
  • producing a statement in its published policy which meets the requirements set out in paragraph 35.

The effect of the overprovision assessment

54. Where a Licensing Board's policy statement has concluded that in a particular locality there is an overprovision of licensed premises, or licensed premises of a particular description, an application for a new premises licence or for the variation of an existing licence in that locality should normally be refused on the ground provided by Section 23(5)(e) of the Act, either:

  • because it would simply add to the number of licensed premises; or
  • because it would increase the number of premises of the relevant description, depending on the approach which the Licensing Board has taken in the policy statement.

55. The application need not be the subject of an objection.

56. The effect of the policy is to create a rebuttable presumption against the grant of an application. Each application still requires to be determined on its own merits and there may be exceptional cases in which an applicant is able to demonstrate that grant of the application would not undermine the licensing objectives, or those objectives would not be undermined if the applicant's operating plan were to be modified or the grant of the licence made subject to appropriate conditions.

57. Because the application of the policy must leave room for exceptions, the policy statement should not set a numerical quota of licensed premises or premises of a particular description for any locality.

Arrangements for dealing with overprovision during transition

58. Ministers have decided that the duty under section 7 of the Act to carry out an assessment of licensed premises to determine whether or not there is overprovision of licensed premises in a locality should not be brought into force until completion of the transition period. During transition the guidance set out above will apply but Boards are not required to have regard to the number and capacity of all licensed premises within their area.

59. Set out below is how the Executive expects Boards to deal with overprovision during the transition period.

Arrangements for transition

Step 1 - Boards should determine localities or a locality in their area based on their local knowledge and understanding of their areas and in consultation with their Local Licensing Forum where they are aware of problems caused by the density of licensed premises;

Step 2 - Boards should use the services of local authority Building Standards Managers to determine capacity of licensed premises in those localities using the methodology for calculating capacity set out in the guidance on overprovision;

Step 3 - Boards should provide a statement in their Policy Statement (although Boards are not under a statutory duty to do so for the first Policy Statement) setting out a clear indication that a locality or localities have been deemed to be overprovided for. As such, it should be assumed that no more applications would be accepted in relation to that area or those areas. Boards will then be in a position to refuse licenses in a locality deemed to be overprovided for "having regard to the number and capacity of licensed premises", as provided for in section 23, (the capacity of premises having been determined by the Building Standards Officers).

60. This is not a statutory duty for the first Policy Statement but it would be good practice for Licensing Boards to undertake this work so as to provide licensees and the local communities with a clear indication of how they will implement their statutory ability to refuse applications on the grounds of overprovision.

Capacity of licensed premises

61. The recommendation of the National Licensing Forum, agreed by Ministers, is that, for the purposes of the overprovision assessment, the operating capacity of licensed premises should be determined by local authority building standards officers. Any operating capacity figure that is determined should only be used for the purposes of overprovision under the Licensing (Scotland) Act 2005 and for no other purposes. The definition of operating capacity for on-sales and off-sales is set out in section 147 of the Act. Based on these definitions the proposed methodology for calculating capacity for on-sales and off-sales is set out below.

Off-sales

  • the maximum linear measurement, in metres, of the frontage used to display alcohol, including the areas utilised for off-shelf seasonal or any other promotional displays.

On-sales

  • The Buildings (Scotland) Regulations 2004 assessment methods set out in the Technical Handbooks issued in support of these regulations.

Existing premises

62. Existing premises applying through transition on a "like for like" basis will be exempt from the overprovision assessment. This policy will still apply. During transition, this category of premises will be exempt from the statutory grounds of refusal on overprovision grounds under section 23 of the Act


Contact

Email: Central Enquiries Unit ceu@gov.scot