Category: Member Benefits

Short Term Lets: Consultation on draft Licensing Order and Business and Regulatory Impact Assessment (BRIA)

Response to Scottish Government by D&M Nash

August 2021

 

1. For Paper 2: Draft Licensing order – please state your issues and how to resolve them:

Please provide any comments and any suggestions you have to resolve this

We run a well-established (15 years) single property self-catering business in East Fife. This is run purely as a business: available for booking all year round, business rated and occupied around 250 nights per year including the majority of winter weekends.  We rarely stay there ourselves, perhaps 2 weeks in total over the last 10 years.

We were in 2 minds about bothering to respond to this consultation.  To be frank, on the basis of past experience with previous consultations on this legislation, and the recent experiences of those on the Working Group, it seems to us that the consultation exercises are little more than window dressing.  They give the appearance of industry consultation, but decisions have already been made and appear set in tablets of stone. We have seen no evidence whatsoever that the Scottish Government is (a) listening to concerns from those who actually understand the industry, and (b) properly considering alternative proposals to deliver its policy objectives in a way that will not harm our industry, our supply chains and our tourist guests.

However, we do feel we have to formally put on record our continuing concerns both as business owners who will suffer significant financial loss if these proposals are made law and in the context of the wider economic damage, and damage to the Scottish tourism industry that will demonstrably ensue.

As you are well aware having been repeatedly told from a wide cross section of stakeholders, the fundamental flaw in the licensing scheme is that it will lead to a large number of self-catering properties and B&Bs closing – 49% of self-catering and 46% of B&Bs from recent surveys. It goes without saying that will devastate the Scottish tourism industry, its supply chain and in consequence tourism reliant local economies.

We are one of the many that will close. As a small business it is simply not viable for us to continue if licensing is introduced, in particular for the following reasons –

• Uncertainty over licence being granted: Councils will have very subjective grounds to refuse licence – and could grant licence then refuse renewal. Appeals against refusal would involve substantial legal costs and more uncertainty.
• We will have to make advance bookings made during the licence application period conditional on licence being granted (which will put off guests) or risk being sued if we don’t and licence not granted – and this will be repeated every 3 years when licence must be renewed.
• Increased bureaucracy and hassle: disproportionately affecting small business owners who are the backbone of Scotland’s tourist economy.
• Investment uncertainty: we will be reluctant to invest in major repairs, replacements and improvements as we won’t know whether licence will be granted or renewed.
• Unknown and open-ended licensing costs, realistically estimated as £1500k plus despite what, without evidence, the consultation suggests. Councils have to recover their costs from the scheme and operators will face additionally paying the Council for inspections which does not happen with other licensing regimes.

We will lose the income we have carefully built up over the years and will be faced with the difficult decision of marketing the property (and probably losing most of the money spent on quality furniture and fittings) or keeping the property as second home for occasional use by ourselves and friends (which will result in a drastic drop in occupancy). Our professional local housekeeping business and local trades we employ will directly lose several thousand pounds per annum, and less tourist accommodation will of course mean less tourists spending money in local businesses – some of which would not be viable without tourism. Families who form the bulk of self-catering guests will inevitable will inevitably pay more for their holidays as competition decreases – precisely at the moment when we are trying to recover from Covid and when we need to encourage more staycations to reduce carbon emissions. The Scottish Government’s timing is therefore extraordinary to say the least.

We are completely bewildered as why Scottish Government policy is to allow this to happen.

We are well aware in some specific areas there are concerns over the growth of second homes. But if anything, licensing will if make this worse as evidenced by the ASSC’s survey results showing many owners will close but keep the properties as reduced occupancy second homes, and in any event the new planning control areas will help in the future.

We are also well aware that there is evidence (albeit mostly anecdotal and much from small pressure groups) that rapid growth of Air BnB’s in Edinburgh is causing a range of problems. But this is highly localised and therefore needs to be dealt locally (including establishment of planning control areas) not by national measures that damage the rest of us.

But all this can be avoided. The answer is very simple: all the Scottish Government has to do is instead introduce the robust, tourism industry supported, registration scheme proposed by the ASSC which so far has been rejected without even a word of explanation. The requirements of that scheme are completely acceptable to professional operators like ourselves and deliver almost all of Scottish Government’s objectives in a far simpler and less bureaucratic form.

 

2. For Paper 3: Draft Business and Regulatory Impact Assessment (BRIA) – please state your issues and how to resolve them:

Please provide any comments and any suggestions you have to resolve this

In our view the BRIA is fundamentally flawed. It simply ignores the fact that many self-catering businesses and B&B’s will close (as evidenced by surveys). Consequently, it fails to consider the economic impact such closures will have on business owners such as ourselves, on our supply chain (housekeepers etc), local trades people, cafes, restaurants, tourist services. And last but not least on tourists themselves who are likely to end up paying more as businesses closures lead to reduced competition and in addition the costs of licences have to be recouped by the businesses that stay open.

In addition, what little relevant analysis there is in the BRIA appears to be supported by anecdote, often provided by localised pressure groups rather than through objective surveys, rather than by empirical data.