The Licensing Act (2003): its uses and abuses 10 years on

In this research project IAS set out to assess the impact of the Licensing Act 2003 (hereon referred to as ‘the Act’) on the wider public sector 10 years after its implementation. IAS has been involved with the Act from its very beginning; while there was undoubtedly a real need for reform, at the time we cautioned that the proposals seemed likely to undermine rather than protect the public welfare and described the White Paper as ‘confused and ambiguous.’ In partnership with the Civic Trust, IAS founded ‘Open All Hours?’, a network of local residents’ and amenity groups, to ensure their voice was heard in the policy process. This group lobbied in particular for the cumulative impact provision that was finally included in the guidance.

On starting this project there appeared to be wide disagreement as to what licensing could and should to, whether it is regulatory or permissive, and whether it is narrowly administrative or guided by a wider view of the public good. We hope that this project will stimulate debate on these issues and lead to greater clarity for all involved in licensing.

IAS wants to see licensing support diverse, inclusive and sustainable communities, without undermining local areas and putting undue pressure onto the public sector. Alcohol is used and enjoyed by many, but it can also be the cause of significant social and personal problems; licensing should have a key role to play in addressing and preventing many of these problems.

Looking back: 10 years of the Act

In many respects the Act has resulted in continuity rather than change, yet this research found common complaints from local authorities who felt that it has caused them significant problems, particularly in regard to the off-trade.

This report puts forward the view that the Act has been interpreted to the advantage of the licenced trade and there is a need to address some of the myths that have developed around the Act’s use.

Issues impacted by the Act

• There was a common view that the Act has improved day-to-day coordination and cooperation, both within the various regulatory agencies and between the regulators and the licenced trade.
• At the strategic level many participants from a regulatory background saw the Act as fundamentally permissive, reactive and led by market forces at the expense of local communities. Controlling the off-trade was seen to be a particular problem.
• Late night opening has spread crime and disorder back into the early hours, causing significant problems for the police. Most police forces had to rearrange their shift patterns and allocate increased resources to the night time economy to address this change.
• Late night opening seems not to have increased the amount of time or money that people spend in the night time economy, but to have shifted the night out backwards. This has probably increased pre-loading, as people have more time to drink at home before going out.
• While overall numbers of licenced premises have increased slightly under the Act, the growth of the off-trade is the most significant trend; around twice as many off-licences than on-licences have been granted over the last ten years.

Relevant issues not impacted by the Act

• Overall crime levels, and those specifically related to alcohol, have been dropping since before the Act was introduced and there is no evidence that the Act has contributed to this reduction.
• There is no evidence of a relaxed continental drinking culture developing, or that the Act has lead to increased diversity within the night time economy, two key aims of the Act.
• Overall levels of alcohol consumption have been declining since before the Act was introduced. Since the Act came in rates of binge drinking have declined while the number of people abstaining from alcohol has increased. However, there is nothing to link these developments with the Act itself.

Other key concerns and issues

• Many Home Office initiatives were viewed with scepticism, particularly Early Morning Restriction Orders (EMROs) which were seen as impractical to implement. Late Night Levies (LNLs) were viewed as useful in certain locations but too inflexible to be commonly used.
• Cheap alcohol was seen as a significant problem by almost all participants, including those from the licenced trade. The ban on below cost selling introduced by the Home Office was thought to be totally ineffective in addressing this issue.
• The Act is poorly equipped to deal with the off-trade, and is based upon an incorrect assumption that most alcohol is consumed via the on-trade. In fact around two-thirds of all alcohol comes from the off-trade.
• Police and local government funding cuts are already causing problems, particularly because the Act’s fee system means that many areas are not able to recover their costs. This raises serious questions about the regulation and policing of licensing and the night time economy.
• Moves to put greater emphasis on the self-regulation of the licenced trade via voluntary schemes were viewed with concern and scepticism. There is a significant lack of evidence that such schemes are effective at reducing crime and disorder.
• Many participants reported that the Act had lead to alcohol being found in every walk of life. While the impact of this is difficult to quantify, the normalisation of alcohol was seen to be problematic, particularly for children, and one interviewee likened it to a ‘reverse smoking ban’.

Overall this suggests that the Act has had no impact on levels of crime and disorder, overall alcohol consumption and the diversity of the night time economy. Given the widespread predictions that the Act, and specifically 24-hour licences, would increase binge drinking and alcohol-related harms, this is significant, and clearly these predictions have not come to pass.

It would be wrong however to see all of these non-impacts as a success, and the Act has failed to have a positive effect in areas it was intended to, such as alcohol-related violence. There is also a mismatch between the assertion that the Act is benign and the view, found in both this and other research, that the Act significantly handicaps local authorities while being overly lenient on the licenced trade, particularly the off-trade. The impact of this discrepancy is not necessarily universal, but seems to be most sharply felt in areas of high alcohol-related harms.