Despite pausing work on the regulations due to Covid-19 back in Easter 2020, and then resuming in July 2020, the Scottish Government are working to their original timescale of having a licensing scheme in place by Spring 2021.

We believe that a licensing system is a blunt tool to fix a perceived and localised problem of amateur operators in Edinburgh, rather than being a solution that is appropriate for the whole of the Scotland, nor is it one that makes a necessary distinction between different types of visitor accommodation providers.

The ASSC remains concerned that little differentiation is made between different types of operator in what is a diverse short-term letting landscape, with potentially dire unintended consequences to the professional self-catering sector that contributes £723m to Scotland.

The ASSC also believe that, due to the impact of Covid-19, the potential pitfalls and shortcomings of licensing come into sharper focus in two main respects: (a) the impact for resource stretched local authorities having to deal with an influx of tens of thousands of licensing applications; and (b) the impact any disproportionate licensing system could have on the recovery of Scottish tourism.

Chief Executive’s Report 2020

Back in January I had an optimistic and romantic notion that 2020 would be a little calmer. With the proposals for short-term let legislation and tourism tax on the horizon, the ASSC had its ducks in a row and were ready for the fight. The ASSC published two policy papers in February and March 2020 and was actively engaged with Scottish Government’s Short-Term Let Delivery Group.

 And then Covid-19 arrived.   

Leadership

• We all know that coronavirus has posed an unprecedented challenge to the entire tourism sector, including self-catering. From the outset of the pandemic and the introduction of lockdown, the self-catering sector as a whole has demonstrated considerable leadership and perseverance, as we responsibly closed our businesses, often at great personal and financial cost.
• Moreover, individual self-caterers themselves also demonstrated leadership by providing free and discounted accommodation to key workers, including those undertaking vital work in our NHS.
• Throughout the pandemic, the ASSC has fought the corner of its members, kept them informed of unfolding developments over multiple platforms, and engaged with leading tourism stakeholders, MSPs and the Scottish Government to ensure the best outcome possible for our sector.

Recovery

• Ensuring that our sector could recover from the challenge of coronavirus was dependent upon ensuring that businesses could access the support grants they needed to survive. We undertook a lengthy and sustained process of lobbying Ministers and officials to help rectify difficulties in the system, ensuring that even more were able to access funds. This work culminated in the creation of a £1m fund from the Scottish Government, administered by the ASSC and Visit Scotland, to those businesses who were unjustly excluded from accessing these grants.
• Before reopening, we had to build confidence within government, communities and consumers that we could provide a safe environment for visitors in the context of Covid-19. The ASSC – leading our industry – worked tirelessly to produce cleaning protocols that the UK Government and all devolved governments, including here in Scotland, have endorsed.
• Our hard work and determined lobbying efforts also extended to securing an earlier reopening of the self-catering sector than was originally intended – ensuring that the Scottish Government stuck to an evidence-led process against our detractors – which provided a £20m boost to the Scottish economy.
• The tourism sector reopened and self-catering operators the length and breadth of Scotland returned to what they do best: showcasing Scotland’s unique hospitality and offering safe and memorable experiences to visitors.

Pot Holes

• The road is open, but there are real and damaging pot holes to navigate.
• As you will know, we have issued a series of surveys this year. Our sincere thanks to each and every one of you who have responded to these surveys. They have informed our discussions with the Scottish Government and industry colleagues and underpinned all of those conversations with empirical and incredibly valuable data.
• Our latest survey assessing the impact of the Scottish Government’s Covid-19 restrictions, last week, elicited 999 responses in 24 hours: Just 7% consider their business to be seasonal, whilst the vast majority 93% do not close over the winter in normal circumstances. This year the number of properties closed is noticeable, however.  It is fair to say that there isn’t a seasonal effect for trading, but there is certainly a COVID-19 effect in play. 58% blame the One Household Rule restriction for being closed or about to close, or having a significant lack of bookings. 89% blame Travel Restrictions within Scotland, 86% blame Travel Restrictions from the rest of the UK and 55% blame International Travel Restrictions.
• The Strategic Framework Business Fund being provided by the Scottish Government offers financial support to businesses legally required to close or to modify their operations. Self-catering businesses in Levels 1&2 or 3, affected by travel restrictions and loss in demand are not eligible for this support. Self-catering businesses required to close in level 4 may be eligible for support if they meet the eligibility criteria. 70% of respondents feel that they need financial support in terms of a grant.  Half of respondents stated that clear and timely communications from the Scottish Government to guests is needed.
• 77% of respondents feel pessimistic about their businesses over the next three months. This compares to September 2019, when 79% of the membership were either neutral or optimistic about business in the next 24 months, based on the ASSC Barometer.

Where are we?

• In terms of our organisation, the ASSC’s membership has grown significantly over the past year and now stands at over 1,100 professional and dedicated self-catering operators, further amplifying the voice of a sector that generates well over £723m to the Scottish economy per year.
• Our newly commissioned economic impact study will give us more up to date figures in the new year.
• I am hugely proud of what the small ASSC team of just three has achieved over the last nine months. We have had conversations late into the night; we have cried together and laughed together. The overtime put in by the team has been mesmerising, but throughout, it was driven by a passion and real commitment to support the self-catering sector.
• I would like to thank the ASSC Board, who continue to support the team and offer sage counsel.
• I need to thank our incredible public affairs team at Halogen Communications. They have been there at all hours of the day and night to offer advice and support, and to temper me when it all gets too much.
• And of course, thanks to Joyce at Crescent Events for leading the diversification from our annual conference, and creating, driving and delivering the ASSC’s Autumn Talks so seamlessly.
• I am incredibly lucky to be surrounded by an incredible team, all of whom I consider to be real friends.
• The ASSC is nothing without its members, and we value every single one of you. I hope that you believe that we have addressed the very real issues that have affected your businesses over the last torrid months.
• We have also valued the support of our Partners for Business and Sponsors. We can’t function without them.
• Outside of the ASSC but within Scottish Tourism we have built some life-long connections and strengthened relationships already there. If there is one thing that is positive to come out of this pandemic it is a mutual respect for many industry colleagues fighting for Scottish Hospitality.  Together we are stronger, and with common goals for the future we can rebuild a better and more resilient Tourism Economy in Scotland.  I would like to thank those many colleagues who have supported the ASSC over the past year.

So what next?

• Over the course of the next few months, the sector will continue to respond to the Scottish Government’s plans to introduce a licensing system and control areas for short-term lets. With the experience we have gained, and relationships made, we are still trying our best to influence the regulations in a way that works for business, tourism and local communities. I had a private conversation with the First Minister about the proposals. We can’t have escalated our concerns any higher. I am absolutely confident that the ASSC could not have done any more. It’s not over – yet.
• Looking beyond regulations, there is a huge opportunity to remind the domestic market of the benefits of holidaying closer to home – providing benefits to local communities – as well as providing for the overseas market. We did it in July, and we will do it again. Our sector is primed and ready to bounce back first and fast.
• As an association, we will continue to do everything we can to support the self-catering sector in Scotland, as we have done since 1978.
• While there are and will be significant difficulties and challenges to overcome, I am proud that the ASSC and its members have led the way in the safe and responsible reopening of our sector; our professional operators will continue to strengthen the recovery of tourism post Covid-19, and help to build a sustainable future for our industry; and will work towards making Scotland a leader in 21^st Century tourism for the benefit of all who live in and visit our country.

Read the full Chief Executive’s Report: CEOs Report 2020

On 8th December, following the ASSC AGM, we were joined by the Titans of Tartan Tourism – Marc Crothall, CEO, The Scottish Tourism Alliance and Riddell Graham, Director of Industry and Destination Development, VisitScotland together with Caroline Millar, Owner – The Hideaway Experience, CAS Millar Consulting and Scottish Agritourism, (Go Rural), this Question Time with Industry Leaders was a great opportunity to get the latest insights on tourism in Scotland as we look towards planning an opportunities in 2021. Watch the video here.

Fiona Campbell

Chief Executive

Association of Scotland’s Self-Caterers

8th December 2020

The Financial Impact of Short-Term Let Licensing and Planning Controls on Scottish Local Authorities

• Leading tourism and business stakeholders have drawn attention to the negative impacts of the proposed short-term let regulations for the economy and tourist industry, especially in light of the pandemic, and have recommended a postponement. However, the costs to local councils of implementing short-term let licensing and planning control areas also needs to be properly considered. This has been made more difficult in the absence of a Business Regulatory Impact Assessment on the proposals.
• Legal and planning stakeholders have highlighted the challenges that the Scottish Government plans will place on local authorities, many of whom did not support the proposals in the consultation process, and the financial impact this will have on already stretched resources.
• In recent weeks, discussions have taken place at City of Edinburgh Council meetings where councillors have sought more detail on the resource implications arising from the Scottish Government’s plans.
• The Financial Memorandum for the Planning (Scotland) Bill estimated that the cost to planning authorities of additional applications resulting from short-term lets would be between £358,207 and £2.7m per year. Given that this was prepared in 2017, the costs may have increased further. In addition, this estimation only deals with one aspect of the regulatory framework, planning, and did not consider the costs of licensing.
• Research carried out by the RTPI in connection with the implementation of the Planning (Scotland) Act 2019 estimated the costs of a planning authority designating all or part of its area as a short-term let control area between £640,710 (lower estimate) and £14,756,800 (higher estimate).[1] It does not appear that additional funds will be available for planning authorities to carry out the necessary work.
• Legal experts have predicted a surge in licensing applications for short-term lets for when the scheme goes live, potentially overwhelming local authority departments. Stephen McGowan, head of Licensing (Scotland) at TLT LLP and an authority on the 1982 Civic Government Act on which the Scottish Government’s plans are based, said the following:

“Provision will need to be made to deal with the impact of such a magnitude of applications on local authority resources. A massive rush of applications of this order could bring licensing administration to a halt, and have a knock-on effect on reporting obligations with Police Scotland and other authorities such as Fire and Building Standards, who will likely have to comment on each application. This could impact on processing times for other types of civic licence.”[2]

• This was echoed by the legal firm Shepherd and Wedderburn:

“In addition to any increased workload for licensing departments, there will likely be an impact on the Police, Fire Service, Building Standards and others who may be required to comment on applications. It will therefore be vital that the Scottish Government ensures the necessary resources are in place together with sufficient publicity to facilitate a smooth transition to the new licensed regime.”[3]

• Similarly, the Law Society of Scotland said:

“We query what opportunities have been considered for sharing services (e.g. with those involved with inspection processes related to Fire and Rescue Services) as some of the inspection processes should replicate ones that exist already. This could involve dedicated teams or an in housing/HMO team. Unresolved issues regarding fee setting is only one part of the resource implications. The numbers of staff involved is the more crucial factor as this licensing regime is imposing on local authorities additional requirement for staff. The number of applications and the need for this process could impact other areas of work such as e.g. liquor, street traders, public entertainment, and taxi licences. This licensing scheme is introducing additional requirements when authorities are already hard-pressed. In certain areas there will be a flood of applications which will require immediate short-term staffing issues, the implications of which should be considered now.”

• Stephen McGowan of TLT LLP also noted the following on the implications of licensing and provided a comparison with changes made to the liquor licensing regime:

“It has been put to me that councils can “gear up” and bring in temporary staff to help process these applications, but that would only take us so far. There are approximately 32,000 properties in Scotland registered on the successful Airbnb platform alone. By contrast, when the liquor licensing regime changed in 2009 there were around 16,500 applications to process and it was a mammoth task for everyone concerned. The licensing system is supposed to wash its own face and it will be for local authorities to determine a fee for these applications to cover projected costs, but even that is not the full picture.

Licensing is a specialist area and the impact of the new regime is not just about the cost of employing temporary office staff to process bits of paper. It’s also about the inspections that will have to occur in order to produce reports that the properties meet the required safety standards.

There is also the impact on police resource. Every application will need to be reported on and every person checked for criminal convictions and so on. The police may also be asked to report on evidence of antisocial behaviour. The police will see no percentage of the licence fee, and all of this will be happening on top of the other licensing business that both the council and the police are dealing with. It is not too wild a projection to see how the licensing system itself could creak and create delay and logjam, without the right precautions being taken.”[4]

• The Royal Town Planning Institute (RTPI) raised a number of concerns with the proposals for local councils, highlighting the following points:
• “major concerns about the resource implications of changes to the regulatory framework
• the related impacts associated with the additional duties for local councils set out within the Planning (Scotland) Act 2019 which remain uncosted
• the overall financial context of diminishing resources in Councils, both staff levels and fee income streams
• the need for effective enforcement measures and joint working across several Council services
• a clear and simple set of procedures with limited data requirements.”[5]
• The Law Society of Scotland also warned on the cost of the regulations and that local authorities may not be ready from a resourcing perspective: “There are unlikely to be resources in place at present in local authority licensing or planning departments to cover such additional and in certain areas, extensive work.”[6] The policy intention is that the fee levels should cover adequately the staff and administrative costs. However, that ignores the considerable cost of establishing the scheme:

“There are often significant infrastructure costs in introducing new schemes, for example new IT systems, which cannot always be fully recovered…We question whether it is proportionate for applicants to be fully liable for costs of establishing a system, including preparing staff to run the scheme. We suggest that it is appropriate to consider this question in the context of balancing the extent of the mischief which the scheme aims to regulate with the potential gain to the wider public of regulation.”

“In addition, there are likely to be practical challenges with this approach. How may each local authority calculate expected numbers of applications be quantified to be able to work out what the costs should be per application? What is the approach to be by local authorities to differing circumstances, for example, those undertaking home sharing versus those undertaking secondary letting? The omission of a BRIA, or partial BRIA, from this consultation make these questions particularly pertinent.”[7]

• The Licensing Law Committee of the Law Society of Scotland emphasised the importance of piloting the new licensing scheme ahead of implementing the new powers – but the Scottish Government have no plans to do this.
• It is clear that increased regulation will place additional burdens on local authority planning and licensing teams to manage the requirements of a new scheme at a time when they can least afford it. A proper impact assessment of the costs is required and it underlines the case that a postponement of the regulations is desirable.

Local Authority Responses to the Scottish Government STL Consultation

While this consultation was never about whether respondents support/opposed licensing, some of the comments from local authorities on the impact of licensing are really quite stark. The Scottish Government maintain that the fees charged will make the system cost neutral but the local councils clearly state that does not address:

• The initial costs of setting up licensing schemes – are the SG going to fund this?
• The impact of Covid-19 on local authorities from a financial and personnel perspective and how this will be impacted by the additional burden of licensing.

Read what some of the local authority concerns are: Local Authority Responses to the Scottish Government STL Consultation

On 22nd January, the following answer was provided to Finlay Carson MSP:

Finlay Carson (Galloway and West Dumfries) (Scottish Conservative and Unionist Party): To ask the Scottish Government, in light of the responses from local authority stakeholders to the consultation on short-term lets, whether it will provide grants or loans to councils to assist with the costs of setting up a licensing scheme, and how many have (a) requested and (b) indicated that they might require additional funding. (S5W-34589)

Kevin Stewart: Local authorities will be able to charge fees to cover the cost of establishing and running their short-term lets licensing scheme. The Scottish Government has no plans to provide grants or loans to local authorities to do so. A total of 23 local authorities responded to the Short Term Lets: Consultation on a licensing scheme and planning control areas in Scotland (14 September 2020); see www.gov.scot/publications/short-term-lets/ for the consultation paper and report. Three of those responses expressed the opinion that the Scottish Government should provide grant or loan funding to support the establishment of the licensing scheme. Outside of the consultation, no formal requests for additional funding have been received.

[1] https://www.rtpi.org.uk/media/1211/rtpi-scotland-financial-implications-of-implementing-the-planning-scotland-act-2019.pdf

[2] https://www.scottishlegal.com/article/licensing-expert-warns-of-flood-of-short-term-let-licences-1

[3] https://shepwedd.com/knowledge/short-term-letting-greater-regulation-licensing-and-control-scotland-post-covid-19-world

[4] https://www.lawscot.org.uk/members/journal/issues/vol-65-issue-02/system-overload-licensing-short-term-lets/

[5] https://www.rtpi.org.uk/consultations/2020/october/short-term-lets/

[6] https://www.lawscot.org.uk/media/363183/19-07-19-plan-lic-short-term-lets.pdf

[7] https://www.lawscot.org.uk/media/369667/20-10-16-plan-lic-consultation-short-term-lets-regulations.pdf