Licensing law firm Poppleston Allen investigates the situation in Southampton – one year on from the introduction of Late Night Levy. Using data from Freedom of Information Requests, the group looks at the costs, impact and effectiveness of the measure.
Southampton City Council introduced the Late Night Levy (the ‘levy’) on the first of April 2015. This followed a consultation detailing the proposal and subsequent approval from the Full Council.
Poppleston Allen made a Freedom of Information request of the Council to analyse and review its impact one year on, comparing the information provided against previous projections and what was proposed by the Council in its levy consultation reports. We also made a Freedom of Information request to Hampshire Police, in respect of the levy and crime statistics relating to this period. This report summarises our findings and is based on information provided by the Council and the Police in response to our requests.
Number of Premises That Paid the Levy
Southampton City Council opted to apply the levy to premises which are permitted to supply alcohol between midnight and 0600 hours.
Prior to the levy being adopted, the Council stated 294 premises were identified as liable to pay the levy. The Council confirmed that they ‘estimated 96 premises would contribute [to the levy] in 2013’. In reality, 118 premises actually paid the levy in the first year. This is 22 more premises more than the Council had estimated in 2013.
Number of Variations, Surrenders and Miscellaneous Exemptions
The Council confirmed that with regard to the remaining 176 premises that would have been liable to pay the levy, these premises either varied their licence to avoid payment, fell under an exemption or surrendered their licence.
The Council stated that they had estimated ‘198’ premises would reduce their hours on their licence to avoid the levy prior to it being adopted. In reality, using Council figures and estimates provided, over 170 premises may have reduced their hours to avoid the levy, almost 30 less than the Council predicted, nearly 60% of the 294 that were identified as liable to pay the levy prior to adoption.
69 premises reduced their hours by way of a free minor variation to avoid the levy and only one premise surrendered their licence that was due to pay the levy. We understand that out of the remaining 106 premises that were liable to pay the levy, the vast majority avoided the levy by reducing their hours by way of a variation with a council fee being paid and few premises were exempt (‘cinema, hotels’). We asked the Council exactly how many premises fell under of one of the agreed categories of exemptions, but the Council confirmed ‘this information is not held, it is a small number’.
The Council confirmed that currently 120 premises contribute to the levy (in its second year) and also ‘this suggests 174 [premises] no longer sell [alcohol]’ after midnight one year on from the levy being introduced.
Proceeds and Expenses Levy
The Council’s levy consultation report (prior to adopting the levy) stated £240,220 as the maximum ‘potential additional income’ if all premises at the start of the consultation paid the levy and ‘£25,000 to introduce the [levy] and administer it in its first year’. However, the Council did state in its consultation and post-consultation reports that considering exemptions and variations to avoid the levy, they estimated levy revenue would be ‘£100,000’ gross. Additionally, the Council levy reports post-consultation estimated costs to administer the levy in the first year as ‘£15,000’, £10,000 less than estimated previously.
The Council confirmed that the actual amount collected from the levy in the first was £124,896. This is almost £25,000 more than the Council estimated it would raise. The deducted expenses were £14,414, almost in line with the Council’s projected expenses.
The Home Office Guidance on the levy makes it clear that any financial risk (for example lower than expected revenue) should be fully considered prior to adopting a levy, along with the viability and desirability of the proposal. Unlike some other councils whose projections have overestimated money likely to be raised from the levy, in this case, the Council produced a more realistic, perhaps even cautious, approach to levy projections. The figures show that the Council in fact underestimated the amount raised from the levy in its first year and this resulted from an underestimation of the number of premises that would contribute to the levy along with an overestimation as to the number that would reduce their hours to avoid the levy.
Use of Proceeds by Police and Council
We understand that the levy funds allocated to the PCC and Council (70:30 split) have been pooled and there has been an agreement as to use of the funds. On adopting the levy, the Council stated that a ‘levy panel’ comprising of the Council, statutory partners, the PCC [Police and Crime Commissioner] and the trade would be put in place to make recommendations to the PCC and the Council on how the levy money should be spent. The Council confirmed the ‘Levy Board is set up and agreed [on what and how much to be spend]… their views have been considered’. The Council confirmed that the members of the Levy Board are made up of a ‘Senior Manager from the SPC responsible for licensing, a Police representative (Supt), a Senior Manager with the OPCC, the Chair of the Licensed Trade Group operating in the city centre’. The Council did not provide specific details as to the parties/persons who make up members of the Levy Board citing they ‘cannot disclose names and/or addresses requested as it constitutes personal information’. We asked the Council how the members were elected onto the Levy Board and they confirmed that ‘the make-up of the Board was agreed in the consultation process’.
The Council also confirmed that the Levy Board have had two meetings to date, and the next one is due in October, no date has been fixed yet. We did request copies of the notes of the meetings and the Council confirmed that they would ‘seek advice on releasing notes of the meetings’.
Furthermore we asked the Council whether levy payers had been consulted regarding the spending of the money and how the money from the levy is spent. The Council confirmed ‘the whole trade were consulted upon the process, including the setting up of the Board. The trade are part of the Board so are informed on the spending’. This suggests levy payers have not been specifically consulted since the formal consultation of the levy and would rely on the member from the trade, as part of the Levy Board, to consult with them and update them in relation to how and what the levy funds are spent on.
The Council confirmed that the money from the proceeds of the levy had not yet been spent. However, the money had been provisionally agreed to be spent as follows:
• Taxi marshalling - £15,000
• In Case of Emergency ‘ICE’ bus (night time emergency bus/ safe haven) - £21,500
• CCTV improvements - £25,000 towards the running of CCTV
• Street Pastors - £25,000
• Street cleaning - £20,000
• Night Time Economy Management, Enforcement activities and personal safety initiatives, providing temporary public conveniences – Nil at this stage
• Best Bar None – Nil at this stage.
Total agreed to be spent: £106,500
Expenses: £14,414
Grand Total: £120,914
Total Collected from levy: £124,896
Balance of levy funds remaining: £3,982
The balance of £3,982 has not been allocated as of yet and the Council confirmed that this balance will either cover some expenses this year, be carried over to next year or, alternatively, be spent on an agreed item.
Review of the Effectiveness of the Levy and its Impact
We asked the Council if any assessment has been made as to the effectiveness of the levy and if not, whether any review is planned. The Council confirmed that the levy is ‘due to be reviewed in Autumn 2016’.
We asked the Council if any alternative voluntary schemes such as a Business Improvement District (BID), Best Bar None or other best practice schemes were considered prior to adopting the levy and the outcome of such consultation. The Council confirmed that ‘no alternative scheme was considered’. Other councils have considered alternatives such as voluntary schemes prior to deciding whether to adopt the levy, yet the Council in this case did not consider any alternative scheme. As part of the Council’s review of the levy, they may wish to consider voluntary schemes such as those mentioned above as an alternative to continuing with the levy. In fact the levy report to the Council and its Licensing Committee on 11 & 17 September 2014 stated that ‘if [the levy is] adopted and subsequently one of these initiatives or schemes such as a BID comes to fruition the levy will be reviewed and …withdrawn if a better system is put in place.’
We requested the Police provide specific crime statistics relating to Southampton City to establish whether there has been any reduction in crime and disorder since the levy was introduced. The statistics we requested were refused under a legal exemption, the Police stating ‘Hampshire Constabulary does not hold this information in a retrievable format. The cost of determining if the information is held, locating and retrieving the information exceeds the ‘appropriate level’’. Nonetheless, as the full levy proceeds have not yet been used, it could be argued that the true effect of the levy on crime and disorder in Southampton cannot be properly assessed until the funds are used and the funded operations are given time to show their effectiveness with regards to reducing crime. Therefore we feel it may be more apt to revisit the crime statistics in one or two years time to assess the effectiveness of the funded operations with regard to reducing crime and disorder. Analysing such data will also be a vital fact for the Council to consider as part of the review of the levy and its impact on the city.
We will keep a keen eye on the outcome of the Council’s review of the levy and provide our views on the findings, in the meantime if you have any queries please contact us.
