Propel Legal Article - Covid easements to end and what that means for hospitality by Luke Elford

First appearing for Propel Hospitality in their Legal Briefing on 9th August 2023

Covid easements to end and what that means for hospitality by Luke Elford

In my experience, developments in licensing are like buses – you hang around for ages and then several come along at once. One perfect example of this is the latest set of announcements from the government. Some of the most helpful regulatory easements introduced during covid are to be scrapped from the end of September. While we are seeing the back end of the pandemic, this is still a huge blow to the industry in a time of economic hardship and recovery.

There are numerous regulatory changes that will affect the day-to-day operations of hospitality businesses. These include: 

1. The off-sales exemption inserted into the Licensing Act 2003 by the Business and Planning Act 2020 will cease as of 30 September 2023.
2. The number of temporary event notices (TENs) permitted will be reduced in number from the enhanced allowances introduced by the Business and Planning Act 2020 from 1 January 2024.
3. The section 182 guidance that supports the Licensing Act 2003 has been updated.
4. The pavement licence regime introduced by the Business and Planning Act 2020 will continue for another year, until 30 September 2024. 

The most significant and perhaps unexpected news is that the off-sales exemption will come to an end at midnight on 30 September. For those unfamiliar with the exemption, the Licensing Act 2003 was amended to allow establishments holding a premises licence that only authorised on-sales to also sell alcohol for customers to take away (referred to as off-sales), enabling the general public to enjoy their drinks at home while the doors to their favourite locals were shut. This adaptation proved crucial for businesses navigating covid-related restrictions that hindered their usual operation.

The off-sales exemption played a vital role during a time of dire need, allowing licensed venues to adapt, and many chose to capitalise on this by continuing to offer off-sale beverages post-covid. However, for any venue wishing to continue making off-sales after 1 October 2023, they must submit and gain approval to vary their licence.

The government has attempted to present a rather optimistic viewpoint, saying that establishments will be able to initiate a relatively straightforward process by submitting a minor variation application to their respective local councils. The section 182 guidance has been updated to reflect this and the precise wording is as follows: “If an on-sales only licence holder wishes to add off-sales to their licence, licensing authorities may in the first instance wish to treat applications as a minor variation, in particular when the holder took advantage of the Business and Planning Act 2020 provision and there has been no adverse impact on the licensing objectives.”

The good news is most councils I’ve engaged with have indicated they are going to accept minor variations. However, I personally think that the provided guidance from the government lacks sufficient depth. It’s important to remember that even though assurances might be given now, they might not necessarily be upheld in the future. The government could have enforced a requirement for councils to accept applications seeking to include off-sales as a minor variation, but it has not done so, and so the industry is left in another period of uncertainty. The government’s statement merely suggests that councils “may... wish to treat applications as a minor variation” and the use of the word “may” leaves councils with a great amount of flexibility. It is not without the realms of possibility that a council will insist that applications are made under the (full) variation procedure, a time-consuming and costly process for operators that have already been trading in this way for many months.

The second issue is the exemption for those with off-sales on their licences, but with restrictions about how those sales can be provided, seems to have been overlooked altogether. From 1 October 2023, those venues would have to go back to abiding by any restrictions, and the guidance doesn’t suggest that those applications could or should be treated as minor variations. 

The suggestion that “there has been no adverse impact on the licensing objectives” concerns me greatly, and I can certainly envision potential disagreements arising between licence holders and licensing authorities over this matter. For operators affected by the discontinuation of the off-sales exemption, I offer the following advice: 

1. Communicate with your local licensing department or officer to understand the council’s proposed approach towards these types of applications.
2. Submit your application as early as possible. The consultation period for a minor variation spans ten working days from the day following the submission of a valid application. The council is granted an additional five working days to assess the application.
3. If you are feeling uncertain or uneasy about the process or interacting with your local council, consider seeking assistance from a qualified licensing solicitor who can help guide you through the navigation process. 

Regarding TENs, starting from 1 January 2024, they will revert to their pre-covid limitations. A TEN is required if you intend to carry out a licensable activity on unlicensed premises or operate outside the terms of your existing premises licence. The latest update means a venue will have the ability to give 15 TENs per calendar year (reduced from 20), covering a maximum of 21 days (reduced from 26). The rationale behind this adjustment, as stated by the government, is the relatively low take-up of TENs recently. As of 31 March 2022, there was a 33% decrease in TENs compared with the year to 31 March 2018. I must admit I find this reasoning quite odd as the increased allowance for TENs was applicable for the calendar years 2022 and 2023, not the period referred to. I have questions about the relevance and significance of the data concluding in March 2022, especially when taking into account the traditionally quieter months.

Finally, to end on a positive note before I am accused of being all doom and gloom, I’m pleased to share the much-loved expedited pavement licence framework has been extended until 30 September 2024. There was huge hope that this regime would become a permanent fixture, but it is currently a component of the Levelling Up and Regeneration Bill, which is legislation that is still in progress. The necessary preparations would not have been ready by the end of September, so an extension feels like a sensible move. If you have a pavement licence scheduled to expire on 30 September 2023, then you will still need to get touch with your local council to initiate a new application for the following year, despite the extension of the scheme. 

Overall, the consultation on whether to keep the regulatory easements in place feels like a missed opportunity, especially when you take into account that there were only 174 responses received during the two-month consultation period. Maybe the circumstances we face now would have been different if the opportunity to provide feedback was expanded. Now that we have the result, it will be interesting to see how things play out across August and into September, but I have no doubt the sector will be able to adapt and overcome like it always does. 

Luke Elford is a partner at John Gaunt & Partners