Local authorities have been under considerable strain for a number of years, but with councils now fighting the health and economic problems wrought by COVID-19 their resources are stretched more than ever. We have witnessed the impact of this on services such as licensing, where staff have been on furlough, or moved into special COVID response teams, or indeed shielding or unwell themselves. It is in these unfortunate circumstances that Holyrood has decided to reform the short-term lets licensing regime for Scotland in an attempt to placate concerns about their rise.
The increase in short-term lets we have witnessed over the past decade has, for the most part, been driven by technological disruption and an increase in global tourism. Whilst these trends have brought about tremendous new opportunities, there has been significant reporting of alleged problems for some local communities, and this has mobilised the Scottish government into action. Whatever merits there may be to reforming short-term lets licensing in theory, the proposal put forward by Holyrood – the Civic Government (Scotland) Act 1982 (Licensing of Short-term Lets) Order 2021 – has been rushed and has attracted criticism both from local authorities and the trade.
The order would also see councils use a single site notice for both planning and licensing. On the surface, this suggests efficiency, but is likely to cause problems. The licensing and planning systems are entirely separate – from the laws that apply, to how applications and assessments are handled. Combining planning and licensing consultation site notices is probably only going to cause public confusion, which will see objectors to short-term let licenses raise irrelevant planning issues before the licensing committees assessing applications (and vice-versa). Such a situation would see council time wasted dealing with unmeritorious objections unconnected to the assessments taking place.
The order’s proposals on public consultation of short-term let licences is an example. The new law proposes that neighbours within 20 metres of application premises be notified by local authorities to raise views. As is the case in the densely populated areas of most cities and towns, such a 20 metre radius could constitute a large number of homes, creating a significant workload for council employees. In addition, this legislation makes local authorities responsible for displaying site notices to raise awareness of the consultation process. This is an inversion of the approach under other licensing regimes, and council resource could surely be directed elsewhere.
The law’s position on ‘overprovision’ may also provoke problems for councils. It provides grounds for refusing short-term let licenses where there is overprovision of such properties in an area, but instead of using the approach to overprovision provided by the Licensing (Scotland) Act 2005, the order provides no obligation for local authorities to assess, consult or define overprovision, let alone the mischief it causes. This means that instead of the new law being rolled out smoothly across the country, we’re likely to see inconsistent interpretations from area to area, making it difficult for landlords to assess overprovision and councils spend considerable amounts of time working to define and evaluate overprovision on a case by case basis. It is also possible that the new policies (or lack thereof) on overprovision will either compete with or complement plans for ‘control areas’ within the planning system – another potential source of confusion both for those who depend on the licensing regime and for local authorities themselves.
In proposing this law, the Scottish government is attempting to get to grips with alleged issues brought about by the rapid increase in short-term lets. Unfortunately, the practical application of the system as proposed will have inevitable difficulties. The Order was recently debated at the Local Government committee of the Scottish Parliament and voted through by the thinnest of margins, four votes to three. We shall see what further Parliamentary scrutiny might bring.
Stephen McGowan is partner and head of Licensing (Scotland) at UK law firm TLT