By Daniel Hunter

Taxpayers are being forced to pay £1.5 million a month to subsidise the drinks industry and will see their tab keep rising after the Government further delayed a promise to reform licensing rules.

Town halls will have to keep picking up the cost of nationally-set and outdated licensing fees after the Home Office pushed back on a commitment to introduce locally-set fees, set out in 2011's Police Reform and Social Responsibility Act, until October 2014.

The current rules are preventing councils from recovering their full costs from applications from pubs, nightclubs and off-licences, at a price of almost £1.5 million a month and more than £150 million since the system began in 2005.

The further delay means councils will have to add another £24 million to their already hefty tab between now and October 2014 — money that could be spent on filling potholes, running libraries, caring for the elderly or protecting children at a time when they are being taken to breaking point by a further 10 per cent government funding cut announced in the Spending Round last month.

The Local Government Association, which represents more than 370 councils in England and Wales, is urgently calling on the Government to end these frustrating delays and allow local authorities to set the flexible, cost-neutral charges that fairly represent their costs.

All venues in England and Wales currently pay fixed national licensing charges, depending on the type of application. However, the true cost of licensing — which includes site visits, public consultation, liaising with police, committee hearings, investigating and taking action on breaches — can be several times higher.

Councils are not permitted to make a profit on licensing fees, but by reforming the system they would be able to recover the actual costs of an application from those who will benefit from it.

"Councils want to support good local pubs but cannot be expected to continue picking up the tab for licensing fees which are outdated and not fit for purpose," Cllr Mehboob Khan, Chair of the LGA's Safer and Stronger Communities Board, said.

"There is common ground among councils and the industry on the need for reform, along with a growing body of opinion that nationally-set fees are unfair, and some even say illegal, but the Government continues to drag its feet and break its promise to allow locally-set fees.

"As well as meaning more taxpayers' money could be spent on frontline services, a more flexible licensing system would help councils support responsible venues which enrich local communities and put pressure on those which encourage excessive drinking, noise and high street mess.

"It's costing councils almost £1.5 million for every month which passes and October 2014 is a lifetime away in the context of the current financial climate that local authorities are facing.

"It is unacceptable that local authorities are being hit with funding cuts on one hand and then left with no choice but to waste vital money which could be spent on filling potholes, paying for libraries, caring for the elderly and protecting children."

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