CIPFA NW AUDIT RISK & GOVERNANCE GROUP LICENSING A Guide for Internal Audit Fees for Licences CIPFA NW Audit Group LICENCE FEES Most Licences attract a fee (notable exception – Caravan Site Licence) Different fee regimes: A set statutory fee (e.g. Licensing Act 2003) A set statutory fee that can be overridden by the Council (e.g. Hackney Carriage and Private Hire Licenses under LG(MP)A 1976) A set maximum fee allowing local variation to achieve cost recovery (e.g. Gambling Act 2005) Prescribed Costs to be Recovered (e.g. Hackney Carriage and Private Hire Licenses under LG (MP)A 1976) A reasonable fee to be set by the Council Fees Generally Cannot use Licence Fees to raise revenue generally Must carry forward surplus or deficit 3 year cycle Different fees – cannot “lump” all licence fees together Each charging regime must be separately account for Must be able to justify fee levied “Grant” or “Application” Is the fee payable on application or grant? If the latter, must refund (or not levy) if application is unsuccessful Challenges to Fees 1 Judicial Review of the Council Decision based on either – Ultra vires (no power to levy a particular fee, or fees used to raise revenue unlawfully), or Wednesbury (unreasonable, irrational) Challenges to Fees 2 Can challenge via the District Auditor and the Council Accounts Guildford Borough Council in relation to HC and PH fees – 3 complaints That the council had no properly advertised that it was going to charge fees of more than £25 That the council did not keep proper records of costs and fees for each type of licence That fees were in excess of costs What is recoverable? Local Government (Miscellaneous Provisions)Act 1976 Ensure adoption Drivers S53 “Issue & Administration” Vehicles & Operators S70 “vehicle inspections, HC stands, Administration, Control and Supervision Drivers Issue – The action of supplying or distributing an item for use, sale, or official purposes Administration – The arrangements and tasks needed to control the operation of a plan or organisation Issue & Administration Determination of Application Application form – fee, processing, photographs Medical – verification with GP’s CRB – checking documents, courier costs etc. Panel Hearings – reports, member services, Councillors, legal Computer Inputting DVLA mandate Production of paper licenses and badges Court Appeals Vehicles Inspections of hackney carriage and private hire vehicles; grant or renewal The reasonable cost of providing hackney carriage stands Any reasonable administrative or other costs in connection with the foregoing and with the control and supervision of hackney carriages and private hire vehicles vehicle and operator fees over £25 must be advertised – 28 day consultation Expenditure Allocation Direct Staff Time recording Activity based Number of drivers/vehicles Indirect Staff % of time apportioned over activity Expenditure Activity based Some easily identified (plates, MOT’s) Support Services •Finance •HR •IT •Offices Activity based No of driver/vehicles/operators •Member Service Number of panel meetings Officer Time Member Allowances (Chair) Setting Fees Private Hire Driver Surplus/Deficit bfwd X Expenditure Y Required Income X+Y Current Income A % (X+Y) - A Increase/Decrea se Private Hire Vehicle/ Operator Hackney Driver Hackney Vehicle Accounting Private Hire Driver B/fwd (+/-) Income Expenditure Direct Staffing Transport Supplies & Services Support Services Surplus/Deficit Private Hire Vehicle/ Operator Hackney Driver Hackney Vehicle QUESTIONS Lynn Anders Business Advisor Knowsley Solutions 0151 443 3658 lynn.anders@knowsley.gov.uk CIPFA NW Audit Group