Susan Love: Serious flaws remain to be addressed after licensing law mess

DURING last year's implementation of the Licensing Act (2005), The Scotsman reported numerous examples of how the legislation was affecting Scottish firms.

Bed and breakfasts were asked for paperwork similar to that of chain pubs, licences applied and paid for months before still hadn't arrived, exact-scale drawings were costing thousands.

An administrative backlog dogged Scotland's 43 licensing boards. Different boards had interpreted the legislation differently – with wildly differing and unco-ordinated fee structures, methodology and paperwork. Businesses became confused about their new obligations and rights, leaving them open to penalties or prosecution.

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How alcohol is sold and consumed is of profound importance, which is an argument for the most considered and consistent regulation – not inconsistent bureaucracy. The Federation of Small Businesses (FSB) argued that the law and its implementation should be looked at by the Regulatory Review Group (RRG) – an independent, business-led Scottish body.

Its report, published this week, demonstrates that despite high-levels of collective knowledge and experience about better regulation, a series of mistakes were made – many of them foreseen by politicians and businesses alike.

It highlights that much of the legislation falls short against the five principles of better regulation – transparency, targeting, accountability, consistency and proportionality. Further, it highlights the difference that poor implementation can make.

Implementation isn't just a minor footnote in law-making; it shapes businesses' view of government. Done badly, it reinforces suspicions that government doesn't listen or care about the impact of regulation. Small details can result in needless cost and inefficiency for businesses and enforcers alike.

The report is unusually, and refreshingly, prompt. Reviews of legislation often only take place once measures bed in and, perhaps more importantly, tempers cool. Yet such delays often lead to critical aspects of implementation being lost in the bigger picture. Next time, we're told, we'll get it right.

We may never understand why considerable delays in processing licences were allowed to occur.

Further, it's little short of scandalous that councils can't transparently demonstrate that their fees are fair – based only on cost recovery, as the law requires.

The good news is that we can fix some of this. Aside from recommending that the government review fee structures, a small working group is to be set up to sort out some of the bureaucratic inconsistencies. This should offer some licensed businesses a degree of hope.

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As a country with a (relatively) new political system and where most people know each other, we should relish the opportunity to roll up our sleeves and fix this mess, free from decades of accepted protocol and practice. Conversely, these same attributes mean that there is no excuse for making such mistakes in the first place.

There is also a strong argument our regulatory approach (with the Scottish Parliament legislating on key points, leaving additional conditions and fees free to local interpretation) has serious flaws.

As Scotland hurtles toward a new wave of licensing legislation, these problems need to be addressed sooner rather than later, or further legislation with the best of intentions risk infuriating and disenfranchising the business community.

• Susan Love is policy manager for the Federation of Small Businesses in Scotland