Licensees – What Does the Future Hold?
by Scott Gair, October 12th, 2011
Unless you have your head buried in the sand, you will be aware that there has been a concerted effort by the Coalition to reduce the deficit, and that includes looking at ways to cut costs and expenses across the Country.
Sky News reported earlier this year that the cost to the NHS of treating alcohol related sickness is in the region of £3bn.
The Telegraph reported in 2009 that this would cover more than 170,000 kidney transplants, or the entire cost of the breast cancer drug Herceptin for the next 30 years. When you hear those figures you realise just how significant not only the financial costs are, but also the human cost to drinking. With this in mind, the Coalition are hell bent on changing licensing laws over the next few months, and despite many in the trade raising their concerns, it is likely the proposed reforms will be introduced.
The Coalition are trying to introduce a “Late Night Levy”. This will allow local Councils to charge late night drinking establishments a fee for staying open late. This could be hundreds or thousands of pounds a year. We will have to wait and see what the levy is actually used for – to add extra police to the streets at night; or to fatten the coffers of the councils?
At present, anyone wanting to object to an application for a premises licence, or anyone wanting to submit an application for review of a premises licence must be either an “interested party” or a “responsible authority”. Responsible authorities include the police, child protection authority, environmental health and a few others. “Interested Parties” are people that live or work in the vicinity of the premises concerned, or represent people that do. This means that someone living in say Worthing, but working in Lewes, will not have a credible complaint about an application for a new premises licence in say Brighton. The Coalition are looking to remove the “in the vicinity” element so that in future that person could object, even if they do not live or work in the same town or city as the premises concerned. What does this mean? Well, licensees will need to be much more careful about how they treat their customers, and how they deal with complaints. It is not a wild stretch of the imagination to think that this could lead to a lot more premises licence reviews, and potentially a lot more premises licences being revoked.
There are large scale changes proposed for licensing, so it very important that licensees keep up to date on these to ensure they are best place to adapt and reduce any financial impact they may bring. Watch this space for further updates!
For more information on licenses please contact a member of our Leisure team.
By Scott Gair
I’m a Hotelier, Get me out of here !!
by David Gordon, July 7th, 2011
For most hoteliers the last couple of years have been more than a struggle. Indeed for some, including a number of high profile operators and suppliers, the pressures on the sector have proved too much and they have gone to the wall.
For those that have survived, particularly in the “independent” sector, the combined effects of a global recession, huge expansion by the national “budget” and “mid-market” chains, VAT rises, falling room and yield rates, increased labour and supplier costs and tightening bank controls have seen many wanting to try and get out of the sector before it is too late.
Unfortunately, the banking crisis and lack of confidence in the sector has seen sales hard to come by. Lending, despite what the banks may say, is still hard to come by for many potential buyers and so, if you are looking to sell, you need to maximise the chances of not only finding a purchaser but also getting the whole deal through as quickly as possible.
Decorators always say that the quality of the eventual finish is directly proportionate to the time spent on preparation. The same is true if you are looking to sell any business, not just in the hotel sector.
The first thing to do is to set yourself a realistic timetable. Allow yourself plenty of time to prepare for the sale before even looking to go to the market. There is nothing worse than seeing a hotel gradually decline whilst it sits endlessly on the market. Everyone eventually knows its for sale, the seller gets more desperate, its asking price steadily falls and eventually, as losses mount up, the doors are locked and the windows boarded up. This will put off almost all potential purchasers other than those who simply see the property as a “development site”
Start to think about some of the following – Is the hotel looking presentable? Are management accounts up to date? Are all your policies in written form and up to date? Does the website look sensible? Are all your supply contracts in place and up to date? Have you got written contracts and policies for all your employees? Is title to the bricks and mortar “clean” and any property related information ready to be presented to a purchaser?
Above all, choose any agents carefully. Do they properly recognise that they are acting for you and not some bank of “clients” who regularly buy hotels? Check out what they have on the market. Is it similar to the type of establishment that you are looking to sell? How interested are they in the state of your business and whether you are properly prepared for the sale process? What deals have they done in your area recently? Ask to be put in touch with some of their previous clients. Those professional agents with a knowledge of the sector and the market place may not be the cheapest but a few extra pounds spent on the right agents will pay dividends in the long run.
It’s a tough market out there but preparing the business for sale is absolutely key and the sooner advice is sought from those who can assist in the process the better.
Good Luck !!
By David Gordon
Licensees – are you ready for the large scale legal reform to licensing this year?
by Scott Gair, June 17th, 2011
The Coalition government is hell bent on rushing through the Police Reform and Social Responsibility Bill. It is likely, for the time being at least, that the Bill will receive Royal Assent and become enforceable at the tail end of 2011.
Whilst there is a lot in the Bill which deals with other matters not necessarily connected to licensing, there is also an awful lot of proposed legislative changes to licensing which have been slipped in to the Bill and are in danger of upsetting a lot of licensees. The question is – are you ready for the changes?
The tone of the licensing reforms were set when James Brokenshire MP recently said “the ‘café culture’ that the Licensing Act 2003 was expected to deliver has failed to materialise and instead our town centres have become blighted by crime and disorder driven by irresponsible drinking. We are committed to overhauling licensing in England and Wales so that alcohol is no longer the driver of violent crime and anti social behaviour that it is today.”
I think it is fair to say that alcohol is a factor in some crime and disorder, but is it not the individuals that are the problem as opposed to the alcohol as such? For the vast majority of society, having a drink is part of a healthy and balanced lifestyle; for others, it can lead to serious health issues and may play a part in criminal activity. The Governments response to licensing seems to be focussing on the wrong person – surely they should focus on the perpetrators of crime and not those in the licensed trade? Every week we read about criminals being released early from jail and re-offending, or Magistrates complaining that their sentencing powers are not sufficient. Is this not telling us something?
The licensing reforms that are likely to find their way on to the statute book, in my mind, are disproportionate and will not tackle the problem of “irresponsible drinking.”
The changes that we are likely to see will mean that in the future, Licensing Authorities (the Licensing Department at the Council) can charge a late night levy to all licensed premises remaining open past a certain hour. For example, all licensed premises open after midnight may have to pay an additional fee to the Licensing Authority, and early reports suggest the level of fee will be linked to the properties non domestic rateable value. Whilst this may be appropriate for certain areas of town (and most of us know areas of the town where we live that need sorting out), sadly the legislation does not allow the Licensing Authority to distinguish between certain localities. This means that if Brighton and Hove City Council were to bring in the late night levy, not only would it hit the town centre bars/clubs, it would also affect the out of town (in say Patcham), village pubs, who are quietly going about their business. Madness!
At the moment the Licensing Authority can only attach conditions to a Premises Licence if it is “necessary.” They can only take away a Premises Licence if it is “necessary” too. This means that very often it is seen as a last resort. The proposed legislative changes are suggesting lowering that evidential burden so that the Licensing Authority can revoke a Premises Licence or attach conditions to it if it is “appropriate.” This requires a much lower burden of proof and will put a lot more power in the hands of the Licensing Authority, and more to the point, individual Licensing Officers. In short, it will become far easier for Licensing Authorities to revoke Premises Licences.
As the law stands, anyone who wants to submit an application to the Licensing Authority to review a Premises Licence, will need to be in the vicinity of the premises. Sadly “vicinity” is not defined but case law suggests it means “in the neighbourhood.” The Government are proposing to remove this test so that anyone could call for a review of a Premises Licence or raise objections to applications. This means that people living in say Worthing could object to a publican in Brighton wishing to extend his opening hours. I fear that this will lead to a whole host of busy bodies submitting very weak representations and applications to the Licensing Authority, and sadly there is not a great deal the Premises Licence holder can do about it. It will therefore be all the more important for licensees to be on the charm offensive and ensure that any complaints are dealt with swiftly to avoid any disgruntled customer trying to seek revenge by submitting an application to revoke the Premises Licence!
I could carry on this soap box all day, but for the time being I bid you all farewell and will update you as the legislative changes creep towards our statute books.
Any licensees should keep a close eye on this subject over the weeks and months as there may be ways to mitigate the, in my view, harmful effects of this legislation.
For expert advice on Licensing Law, contact me on 01273 407430 or email at sgair@mayowynnebaxter.co.uk
By Scott Gair
Planning and related issues relating to pubs
by Jason Edge, June 6th, 2011
Setting up your place of business
Restrictions on Changes of Use for Drinking Establishments
A drinking establishment is a venue where the primary purpose is for the sale and consumption of alcoholic drinks on the premises.
Since 2005 drinking establishments, which include wine bars and pubs, have had their own use class (Class A4), and there have been stricter controls on drinking establishments. It is no longer possible to change the use of a premises from a restaurant or hot food take away to a drinking establishment.
If the change in activities is minor, it may not require planning permission, and there is specific government guidance on what constitutes a material change of use which would trigger the need for planning permission, and what planning officers will look for to see if this is demonstrated.
Hot food take-aways (Class A5), are premises where the primary purpose is the sale of hot food to take away. Sandwich bars on the other hand sell cold food along with coffee and are classed as shops, (Class A1), along with internet cafés. In recent years many venues have acquired a ‘mixed use’ character, such as a restaurant which includes a bar, or a pub which serves food and puts on entertainment.
Attention needs to be paid to any potential planning and licensing restrictions and to look at the user clause in the lease, which may refer to earlier, more flexible planning rules. If you check before you sign up, this is the best way to ensure that the premises can be fully used to its potential.
Safety at sports grounds
by Jason Edge, June 6th, 2011
Eastbourne Borough Football Club will become one of the first of two teams to play in Brighton & Hove Albion’s new 22,500-seater American Express Community Stadium after it was announced as the surprise host of this year’s Sussex Senior Cup Final, which has been delayed until July 16th to enable it to become the first match at the Seagulls’ new £105 million Stadium.
The final will be the first game of Brighton & Hove Albion’s ramp-up programme this summer – required to gain a safety certificate ahead of the 2011/12 season. The Club must host a first match with attendance as near as possible to the 10,000 maximum, before subsequently meeting further higher requirements necessary for Stadium certification. The cost of staging such a match will mean a huge outlay by the Club . The local licensing authority is responsible for issuing the football club with its Safety Certificate, which permits the club to hold matches a club’s stadium.
The local authority inspectors will attend games throughout the season to ensure that the football club is complying with the conditions of the Safety Certificate. They have the authority to revoke or impose restrictions to the licence. A safety certificate is required for all designated football grounds and is issued under the ‘Safety of Sports Grounds Act 1975` and ‘Fire Safety and Safety of Places of Sport Act 1987` the certificate is extensive and covers all aspects of safety including staffing and crowd control, medical facilities, buildings and structural testing and certification, Fire Safety, documentation of briefings, tests, emergency plans and inspections, documentation, training plus many others. As well as football club personnel, representatives from the local Police, Fire and Rescue Service, Ambulance Service and the football licensing authority attend meetings oversees and advises the Club on all matters that are covered by the safety certificate. The group can then advise the certifying authority on any action that it considers should, or could, be taken in the event of any breaches of the conditions of the certificate, including legal action against the person named on the safety certificate.
If you require further information on what is required to ensure the safety of spectators attending sporting venues and compliance with legislation, please contact a member of our Leisure team.
HOTELIERS – be careful what you are signing
by David Gordon, May 23rd, 2011
As a Director of a Hotel Company, I am often asked to put on my solicitor’s hat and advise on various contracts that the general managers want to sign or, worse, signed some years ago and which they now want to get out of.
In the dim distant past, hotels operated with a leather-bound reservations book, a telex machine and a few phone lines provided by British Telecom. Times have changed and there are precious few in the industry who are now able to operate successfully without complex computer, data and telecommunication systems.
The leisure market is awash with suppliers offering reservation and GDS systems, website hosting, telephone systems and maintenance contracts etc and whilst they supply services that the industry cannot do without, hotel owners need to pay attention to the small print.
A particular bugbear of mine is clauses hidden in the small print of contracts which artificially extend the contract beyond the period that the customer is expecting.
Salesmen often secure the sale on the basis that the customer has to sign up for a minimum period. This is understandable if the supplier has to make a significant investment in time and money to set up the services being offered. Let’s say the supplier is going to provide GDS services for a hotel. It will take time to build the profile and develop the relationship with those “on the ground”, so it might be reasonable for the hotel to commit to a minimum contract period of, say 1 or 2 years and indeed, the longer the hotel is prepared to commit to, the lower the unit price sometimes.
However hoteliers need to watch out for clauses (often in the small print) along the lines of,
“This contract is for the minimum period set out overleaf and will thereafter continue until terminated by the Customer giving not less than 90 days notice such notice to expire on an anniversary of the date of this Contract”
Readers will hopefully see the problem. If you forget to give the 90 days notice, thinking the contract just finishes at the end of the minimum term, it can come as a bit of shock to find that the contract now rolls on for another year.
Almost always there is no justification for the contract to roll-on for annual periods. Whilst I can see that, in certain circumstances, a minimum period is required, clauses such as the one above are generally included to give the supplier (who generally wants to keep the contract going for as long as possible) an advantage. Essentially the supplier is relying on the hotelier forgetting to serve any notice.
In contract negotiations I have often adopted the stance of, “why does the contract need to run on for further periods of one year after the minimum term?” The supplier rarely has a reasoned answer and can usually be persuaded to adopt a clause whereby, after the minimum period has elapsed, the customer can terminate at any time on, say, 90 days notice.
In essence, hoteliers must read the small print and check when they can get out of contracts before putting pen to paper. Once the contract is signed, get your diary out and make sure you do not miss any key dates for terminating.
By David Gordon