Summary Report:

The London Borough of Camden Council introduced the Late Night Levy (the ‘levy’) on 28 April 2016. This followed a consultation detailing the proposal and subsequent approval from the Full Council.

Poppleston Allen made a Freedom of Information request of the Council to analyse and review its impact one year on, comparing the information provided against previous projections and what was proposed by the Council in its levy consultation reports.  We also made a Freedom of Information request to the Metropolitan Police, in respect of the levy and crime statistics relating to this period in Camden. This report summarises our findings and is based on information provided by the Council and the Police in response to our requests.

Number of Premises That Paid the Levy
London Borough of Camden Council opted to apply the levy to premises which are permitted to supply alcohol between midnight and 0600 hours.

Prior to the levy being adopted, the Council identified in its post-consultation report 271 premises liable to pay the levy which supply alcohol between the levy period on days other than New Year’s Eve into New Year’s Day (subject to any other exemptions or reductions of hours to avoid the levy).  The Council did however make further estimations as to the number of premises which would no longer be liable to pay the levy because they would apply through minor variations to reduce hours to avoid the payment of the levy.

In reality, the Council confirmed 232 premises paid the levy, 39 less than this number liable to pay the levy prior to it being adopted.  This is effectively in line, albeit slightly higher, than the Council had estimated considering reductions through premises reducing hours to avoid the levy.  The Council also confirmed that 6 premises that were liable to the levy in the first year surrendered their premises licence.

Number of Variations
The Council estimated that 54 premises may reduce their hours on their licence to avoid the levy prior to it being adopted based on ’the 20% figure provided by the Government’. The Council alluded to the fact that this may be an overestimate considering that Islington Council only reported 1% of premises which reduced their hours to avoid the levy when it was adopted there.

In reality, the Council confirmed that 42 premises reduced their hours by way of a free minor variation to avoid the levy, 12 less than the Council predicted, and over 15% of the 271 that were identified as liable to pay the levy prior to adoption.  We also note that Council’s  the figure of 271 premises liable to pay the levy must have increased once the levy was adopted as, if at least 42 premises reduced their hours and 232 paid the levy, then at least 274 must have been liable to pay the levy once it was adopted, if not more. We have asked the Council for the exact figures as to this and are awaiting a response.

The Council also confirmed that 130 applications for minor variations or full variations, where a council fee was paid, have been received by those premises liable to pay the Levy but the Council refused to provide information as to how many of these were to reduce hours so as to avoid the levy, due to a legal exemption based on cost and that it would cost more than the ‘appropriate limit’ to comply with the request (as the information is not held in one database and each file would need to be reviewed to determine the outcome).

Exemptions and Reductions
The Council also confirmed that save for the New Year’s Eve exemption, there were no other exemptions permitted from the levy.

The Council provided a 30% reduction for premises who are members of a business-led best practice scheme, in this case, members of one of the three local Business Improvement Districts (BIDs). No premises received a 30% reduction from being a small business having a non-domestic rateable value of £12,000 or less.

It was estimated that 57 premises could contribute to the BIDs and be permitted a reduction in their levy fees, however only 51 premises actually received this reduction, 6 less than estimated.

Proceeds and Expenses Levy
The Council’s levy consultation report (prior to adopting the levy) projected ‘maximum gross revenue’ from the levy of £360,240 if all 271 premises at the start of the consultation paid the levy. The Council also estimated expenses costs of £29,548 -£43,738 to introduce the levy, consult and administer free variations to reduce hours in its first year.

The Council projected the ‘maximum net [Levy] revenue… would be £330,692’.  However, the Council did state in its post-consultation reports that gross levy revenue could be reduced by as much as £72,048 through variations to avoid the levy and ‘consequently the net [levy] revenue… will reduce to £244,454’.

The Council also projected 30% reductions for premises part of business-led best practice schemes (BID members) of approximately £32.336 – £42,853. Interestingly, the Council estimated that if they offered an exemption to members of local BIDs, gross levy revenues could be reduced by up to £148,283 and this may be one of the key points as to why members of BIDs were not exempt from paying the levy rather than given a reduction, as it may have resulted in the levy not being a financially viable option.

From our FOI the Council have confirmed that the actual amount collected from the levy in the first year will be gross revenue of £288,163.40, once a small outstanding amount is recovered, and net revenue is expected to be £258,615.40. This is over £14,000 more than the Council estimated it would raise. The deducted expenses were £29,548, mirroring the Council’s projected expenses.

The Council confirmed that the actual reduction in levy revenue from premises receiving the 30% business-led best practice scheme reduction was £25,314.90, which is lower than projected, based on the fact that fewer premises than expected received this reduction.

The Home Office Guidance on the levy makes it clear that any financial risk (for example lower than expected revenue) should be fully considered prior to adopting a levy, along with the viability and desirability of the proposal. Unlike some other councils whose projections have overestimated money likely to be raised from the levy, in this case, similar to Southampton, the Council produced a more realistic, perhaps even cautious approach to levy projections. The figures show that the Council in fact underestimated the amount raised from the levy in its first year in part based on an overestimation as to the number of premises that would reduce their hours to avoid the levy or receive the 30% reduction.

Use of Proceeds by Police and Council
We understand that the levy funds allocated to the PCC and Council (70:30 split) have been pooled and there is an agreement as to use of the funds. The Council confirmed as per the proposed levy model in its pre-adoption report, that they pay ‘100% of the net amount of the late night levy payments to the Mayors’ Office for Policing and Crime [MOPAC] on the agreed understanding that MOPAC will retain the full revenue amount and use it in Camden. A Community Safety Partnership Board (CSPB) has been formed and is responsible for administration of the levy and decides how it will spend the revenue.’ The Council did not provide specific details as to the parties/persons who make up members of CSPB save for that ‘afternoon meetings are held monthly’.

We asked the Council whether levy payers had been consulted regarding the spending of the money and how the money from the levy is spent.  The Council confirmed ‘Yes. Online consultation… and to representatives of licensed premises at the Community Safety Partnership afternoon meetings.’

The Council confirmed that the CSPB has spent some of the levy revenue as follows:
• £150,000 spent on two Uri lifts (one male and one female) which are “pop up” urinals in the Camden Town area.
• £20,000 towards Camden Business Against Crime Radio Network upgrade and integration with night-time tube stations.

The balance of over £88,000 has not been allocated as of yet and the Council confirmed the CSPB has not yet decided how the balance is to be spent.

Review of the Effectiveness of the Levy and its Impact
We asked the Council if any assessment has been made as to the effectiveness of the levy and if not, whether any review is planned. The Council confirmed ‘the CSPB will assess and review the effectiveness of the [levy] through analytical assessment when it considers it is appropriate to do so. The levy year ended on 27 April 2017 and as this is the first levy year, it is too early to assess and review the effectiveness of the levy at this time.’ We requested the Police provide specific crime statistics relating to Camden to establish whether there has been any reduction in crime and disorder since the levy was introduced, which were provided by the police. A brief analysis of the crime figures provided suggest all crime, alcohol related crime, crime related to licensed premises and crime between Midnight and 0600 (the levy period) has general gone up from the year before the levy was instructed to the first year in which the levy has been adopted. However, as the full levy proceeds have not yet been used, it could be argued that the true effect of the levy on crime and disorder in Camden cannot be properly assessed until the funds are used and the funded operations are given time to show their effectiveness with regards to reducing crime.  Therefore we feel it may be more apt to revisit the crime statistics in one or two year’s time to assess the effectiveness of the funded operations with regard to reducing crime and disorder.  Analysing such data will also be a vital factor for the Council to consider as part of the review of the levy and its impact on Camden.

We will keep a keen eye on the outcome of the Council’s review of the levy and provide our views on the findings, in the meantime if you have any queries please contact managing partner Jonathan Smith on 0115 953 8500.