Late Night Levy: A Look into the Issues and Possible Solutions from Poppleston Allen

Ahead of the Government’s public consultation on Late Night Levy charges coming to a close on 3rd April 2023, licensing solicitors Poppleston Allen (www popall co uk) have shared insight into the nature of the levy and what it means for businesses

Associate solicitor Suraj Desor has highlighted the main criticisms of the levy at present, from operators seeing it as ‘not ver y effective’ and councils and licensing officers are finding difficulty with its inflexibility and why even if changes are made that still might not be enough to tempt councils to adopt it

WHY HAVE SO FEW COUNCILS IMPLEMENTED THE LEVY?

Currently nine councils across England have the Late Night Levy in place – far less than the Government had predicted (80) would opt for the levy It is fair to say there has not been great appetite for adopting a levy however within the London ‘bubble’ at least the levy has found a home and two thirds of the total number of levies adopted in England are within London (Hackney, Tower Hamlets and Southwark the most recent with the others being City of London, Islington and Camden)

There may be various reasons for this including significant concentration of licenced premises and demands on policing the nighttime economy in the capital and an additional revenue stream may be a temptation difficult to resist in a time of reduced budgets for local authorities

Outside London, the levy is more widely spread, with the levy in place in Newcastle , Chelmsford and Liverpool Liverpool recently decided to retain its levy for now, following a consultation on the basis it was seen as a vital revenue stream in assisting in managing the night time economy

In the current economic climate and reduced budgets for local authorities you would think an additional revenue stream would be welcomed with open arms, however, on the whole , councils have resisted the temptation From my experience , some councils and licensing officers share operator’s views, considering the power too blunt an instrument which lacks flexibility (applying to either the whole of a local authority’s jurisdiction or not at all) –with significant numbers of operators outside main city centres seen to be unfairly affected and some giving up later hours to avoid the levy as a result There are also some criticisms that the use of proceeds lacks transparency

WHY HAVE SEVERAL COUNCILS ABOLISHED IT?

Of those local authorities that have adopted the levy, three of them have successfully removed it since (Nottingham being the most recent, others being Southampton and Cheltenham), citing significant financial pressures on businesses within the hospitality sector Removing the levy would reduce the burden on existing licensees and remove costs that may be considered a barrier to incoming and expanding businesses

Another factor has been the use of BIDs (Business Improvement Districts) considered a better and more flexible alternative as all businesses within the BID area pay towards the BID as opposed to simply those premises licensed for sale of alcohol late at night, which can generate more money as a result compared to a levy This view is most evident in the case of Cheltenham where the levy was adopted but only collected half the revenue anticipated and was swiftly replaced with a BID

WHAT ARE THE BENEFITS REMOVING IT CAN HAVE FOR BUSINESS?

There is a feeling amongst operators and trade bodies that the levy is not ver y effective and is an unjustified additional cost which fur ther stifles the recover y of the night-time economy Where a levy is removed, the benefits are clear for publicans it removes an additional financial burden in an already difficult economic climate and those monies can be used towards dealing with escalating costs or investing in their business

WHAT IS THE CURRENT CONSULTATION TAKING PLACE AND WHAT MAY THE FUTURE HOLD?

To address these criticisms the Government has sought to improve the levy and make its use more appealing for local authorities through changes made via the Policing and Crime Act 2017 These changes include:

* flexibility to al ow councils to ‘localise’ the levy to cer ta n areas rather than applying it to the whole council area so it is more geographically focused on the perceived source of late-night problems

* allow the evy to apply to late-night refreshment premises that ser ve hot food and operate beyond midnight, * and requ re publications of informat on on how revenue is spent

However, these changes are still yet to take effect because the Government pledged to first consult on the level of charge to be applicable to premises providing Late Night Refreshment That consultation is now underway and closes on 3 April 2023, bringing us closer to the changes coming into effect

If the Government retains the levy, and these changes come into effect, councils put off by the inflexible nature of the levy may have a renewed interest – even then whether this ‘levy lite’ will be preferable to BIDs as with most things in life , only time will tell But until then, appetite for adopting the levy is likely to remain mild at best