Content

10.1

The
Team Manager introduced the report which explained that Cabinet
first approved a mandatory licensing scheme for Houses in Multiple
Occupation (HMOs) in April 2006, as prescribed within the Housing
Act 2004. Substantial changes to the scheme were approved in 2018
when the definition of licensable HMO properties was expanded, and
new building standards were imposed.
 
Following a detailed review of current fees and charging
arrangements, the Committee were asked to approve increases to the
HMO licence fees and amendments to the charging
structure.
 

10.2

RESOLVED
UNANIMOUSLY: That
the Housing Policy Committee:-
 

1.    
Approve the changes to the HMO licence fees and
charging structure as detailed.

2.    
Agree to implement the revised fees and new charging
structure for new applications from 31st October 2023 and renewals
from 31st December 2023.

10.3

Reasons for
Decision

10.3.1

The
services provided by the City Council's Private Sector Housing
Service detailed in this report have been reviewed and determined
not to be achieving full cost recovery at their current levels. To
achieve full cost recovery, new fee and charging structures are
presented for decision by committee members.

10.3.2

The
implications of the two landmark rulings R (Gaskin) and R (Hemming)
are significant for any local authority that does not currently
operate a Directive[1]compliant licencing fee regime. The report
advises recommended changes to SCC’s HMO licence fees and
charging structure are approved to ensure compliance.
 

10.4

Alternatives Considered and
Rejected

10.4.1

Do
nothing. This would result in the Council continuing to charge the
current lower HMO licence fees, preventing full cost recovery for
the licensing scheme, and reducing the Council’s capacity for
detecting and enforcing against landlords operating illegally. This
puts the Council at risk of legal challenge for charging in advance
for costs other than those directly associated to the authorisation
of a licence application. The fees are intended to off-set the cost
to the Authority of administering the licensing scheme and must be
split between costs incurred before and after deciding to issue a
licence. There is no safe legal alternative to a split fee regime,
therefore the option to do nothing has been ruled out on that
basis.
 

10.4.2

Split the fee charges
to conform to case law precedent but leave fee levels unaltered.
This would be the most straightforward option to remove the risk of
challenge to the single part licence fee, however our review of the
costs incurred by the Council in running the Mandatory HMO
licensing scheme revealed that the current HMO licensing fees are
not achieving full cost recovery. The proposed revised fees given
in Table 1 have been calculated to achieve full cost recovery in
performing HMO licensing activities. The local authority has a duty
to administer funds in such a way as to protect the interests of
council taxpayers, with the accepted principle that licensed
activities should be funded by those benefitting from them, rather
than council taxpayers. This option was ruled out on that
basis.
 

10.4.3

Split the fee charges
and apportion the increased costs equally across all licence
holders. This option would require a further increase in licence
fees as the anticipated costs for managing non-compliance would
need to be incorporated into the fee income generated from all
licences, rather than additional charges being applied when
non-compliance is detected. Our fee review included consideration
of officer time spent assessing applications, inspecting
properties and detailing licence
conditions, and it was both clear and unsurprising that larger
properties took proportionately greater amounts of officer time
throughout the licensing process. To apportion costs equally across
all licence holders would not be fair or reasonable and would put
the Council at risk from legal challenge, so this option was also
ruled out.