Memorandum submitted by CCPR
1. INTRODUCTION
CCPR is the umbrella body for 280 national governing
and representative bodies of sport and recreation, which in turn
represent some 151,000 sports clubs. As CCPR's expertise resides
in community sport, this submission does not address the Committee's
interest in public safety or live music.
The Department for Culture, Media and Sport
estimates that around 20,000 private members clubs hold liquor
licences, and CCPR estimates that 10,000 of these may be sports
clubs. This submission addresses the financial and administrative
impact of the Act on these clubs.
2. THE SPORTING
CONTEXT
Sports clubs play a key role in local communities,
providing affordable opportunities for people to participate in
healthy physical activity. Sports clubs therefore contribute to
health and community cohesion. Sports clubs' bars play a major
role in the social and economic viability of many community-based
amateur sports clubs. Many of these sports clubs operate a bar
only on competition days for use by members and visiting teams
and on a relatively small scale. It is the small surplus from
bar revenues that helps to keep a club alive, enabling it to invest
in new equipment or improve to its facilities on behalf of participants.
Under the 2003 Act, sport and recreation clubs
are treated in the same way as commercial high volume drinking
venues. For example, the Minima Yacht Club, with an annual bar
turnover of approximately £3,500 is now paying the same for
its licence as the wine bar situated next door, which is open
until 2am and whose turnover is likely to be nearer £3,500
per week. Meanwhile another club has found that its licence fee
has increased dramatically even though the club bar was usually
only open for seven hours a week.
CCPR believes that this is fundamentally unjust
and that sports clubs' licensing fees should reflect the fact
that the primary purpose of a sports club is to provide physical
activity, and that the sale of alcohol is ancillary to this.
3. THE FINANCIAL
IMPACT OF
THE ACT
ON SPORTING
AND SOCIAL
CLUBS
"We've just completed the process of renewing
our licence. The cost was £120 to the local council and £200
to the local paper for the compulsory advert. Our bar profit in
a year is about £2,500 so this has taken 15% of that in one
swoop."
Danny Sillman, Treasurer Guildford Rowing Club
On 11 July 2005, Richard Caborn MP, then licensing
minister, informed the House of Commons that the "vast majority
of sports clubs will fall in a band between about £70 and
£100". However, evidence collected by CCPR from 2430
sports clubs demonstrates that the vast majority fall outside
the lowest fee band.
Table 1
RESPONDENTS TO CCPR SURVEY
|
| Fee Band
|
| A |
B | C
| D | E
|
|
| Total Clubs | 271
| 850 | 1,016
| 203 | 90
|
| Percentage | 11.2
| 35 | 41.8
| 8.4 | 3.7
|
|
CCPR's figures represent an estimated 25% of all sports clubs
with bars, therefore giving the following total cost to sport
in the first year of the Act's implementation:
Table 2
ESTIMATED TOTAL COST TO SPORT OF FIRST YEAR OF LICENSING
ACT 2003
|
| Fee Band
|
| A |
B | C
| D | E
| Overall Total |
|
| Total Clubs | 1,084
| 3,400 | 4,064
| 812 | 360
| 9,720 |
| Application fee | £100
| £190 | £315
| £450 | £635
| |
| Total Fees | £108,400
| £646,000 | £1,280,160
| £365,400 | £228,600
| £2,628,560 |
|
This table outlines that the new fees cost voluntary sport
over £2.6 million in their first year. In addition to this
clubs incur other costs associated with the Act including advertising
in local newspapers, obtaining floor plans, and in some instances
legal fees. For instance 20% of bowls clubs have incurred costs
of over £1,000 as a result of the Act. These costs are excessive
for clubs whose bars are open on selected occasions only.
The impact of these increased fees is demonstrated in CCPR's
Sports Club Survey 2007, to which 2022 clubs responded. The survey
found that in 2006:
— 39% of all clubs reported a surplus;
— 35% of clubs reported a break-even situation;
and
— 16% of clubs indicated a deficit.
However, clubs in most sports were experiencing a downward
trend, with reduced surpluses compared to the previous financial
year. This is indicative of increased operating costs for sports
clubs, and signals a danger that more clubs will over time move
into a deficit position. The increased cost of licensing fees
will add to this burden. The annual renewal fees are marginally
cheaper than the initial licence fees. However, the annual cost
to sports clubs remains at nearly £2.3 million.
Table 2
ESTIMATED ANNUAL COST TO SPORT OF LICENSING ACT 2003
|
| Fee Band
|
| A |
B | C
| D | E
| Overall Total |
|
| Total Clubs | 1,084
| 3,400 | 4,064
| 812 | 360
| 9,720 |
| Renewal fee per club | £70
| £180 | £295
| £320 | £350
| |
| Total | 75,880
| 612,000 | 1,198,880
| 259,840 | 126,000
| 2,272,600 |
|
4. CCPR'S PROPOSAL
TO REDUCE
THE COST
TO SPORT
CCPR has worked closely with DCMS to promote the Community
Amateur Sports Club (CASC) scheme. Under this scheme a sports
club that registers with the Inland Revenue as a CASC is eligible
for 80% mandatory rate relief. This sets a precedent for the treatment
of sports clubs that could also be applied to the licensing regime.
The CCPR proposes that all sports clubs, regardless of whether
they are registered CASCs, be placed in a fee band based upon
20% of their rateable value. This would mean that:
— many of the 47% of clubs in Band B (all those
with a rateable value of £21,500 or less) would move into
Band A;
— the 5% of clubs in Bands C and D would move into
Band B; and
— no club would be likely to remain in Band E.
This solution builds upon existing practice and offers due
recognition of the fact that sports clubs are not profit-making
bodies, but instead make a valuable contribution to the health
and quality of life in the community.
5. WHETHER THE
ACT HAS
LED, OR
LOOKS LIKELY
TO LEAD,
TO A
REDUCTION IN
BUREAUCRACY FOR
THOSE APPLYING
FOR LICENCES
UNDER THE
NEW REGIME
AND FOR
THOSE ADMINISTERING
IT
Clubs responding to CCPR's survey were keen to offer their
views on this issue. It is clear from this feedback that rather
than reducing bureaucracy for sports clubs, the Act has led to
a significant administrative burden for club volunteers during
its first year of implementation:
"The new scheme required a considerable amount of time
and expense to complete and the generation of various documents
all of which had to be copied eight times and posted to the different
regulatory bodies some of which were in the same building! The
whole exercise was over bureaucratic even to specifying the colour
of the paper for the notice for display outside the Club!"
"Race days and times are dependent on the tides, which
of course vary from year to year. As we could not stipulate these
dates, we were not able to apply to open for our mid-week evening
races."
"The application was more onerous and costly than previous
applications/renewals through the Magistrates' Court, with a higher
degree of red tape and administration. As a small non-profit making
sports club, the costly and extensive administration process is
unjustified in a situation such as ours."
"A complex process which probably took about 100 hours
of my time, which as a volunteer is free but would have cost £2000
at least if professionals had been involved."
"The admin procedure has increased significantly to complete
this process. In our case it has been overseen by the club treasurer,
who is retired, and the bar manager, who is a postman and therefore
free to attend meetings with the Council after 2pm."
"Despite an absolutely clean operating record we had
to convince both police and a local councillor that we simply
want a bar for members and guests, and do not wish to operate
a drinking club! To achieve this we had to use the services of
a solicitor and a barrister, hence the high cost of application."
Whilst this administrative burden is not repeated year on
year, the Act does bring with it other burdens. For instance:
— at present a club wishing to make any change to
its premises—even if unrelated to the licensed area, such
as an alteration to the changing rooms—must apply for a
full variation to its licence. This has to date been a costly
and expensive process for both clubs and local authorities. Fortunately
a Legislative Reform Order now being proposed by Government will
amend the process for "minor variations", making it
more streamlined and less costly; and
— The Government is currently consulting on a possible
code of practice for responsible alcohol sales. Should such a
code be introduced its requirements would need to reflect the
capacity and nature of voluntary sports clubs.
6. WHETHER THE
ANTICIPATED FINANCIAL
SAVINGS FOR
RELEVANT INDUSTRIES
WILL BE
REALISED
As outlined above the Act has led to increased financial
costs for sports clubs, rather than cost savings. The total annual
cost to sport of maintaining liquor licences within clubs is £2,272,600.
This is a significant sum that community sport can ill afford
to lose.
7. CONCLUSION
The Licensing Act 2003 has placed a significant financial
and administrative burden on sports clubs. Its major flaw is that
it does not distinguish between commercial, high volume drinking
venues and voluntary, not for profit sports clubs, in which the
sale of alcohol is an adjunct to the provision of sporting activities.
CCPR believes this situation can be rectified by calculating
the licence fees of Community Amateur Sports Clubs (CASCs) upon
20% of their rateable value. This would be commensurate with the
80% mandatory rate relief provided to CASCs. This approach would
reduce the annual cost of licensing to sports clubs to just £454,520,
at a cost of just £1,818,080 to the Government.
CCPR would welcome the opportunity to provide oral evidence
to the Committee in support of this evidence.
September 2008
|
