Overprovision: what next?

The whole concept of overprovision has been brought into sharp focus by the publication of licensing boards’ policy statements, as required in terms of s 6 of the 2005 Act.

While these have been with us for some time, it is fair to say that, with a few exceptions, relatively little stress has hitherto been put on the duty to assess overprovision and to include that assessment within the policy. The increasing influence of the health lobby, and the belief of some that the harm caused by alcohol is directly linked to the number of retail outlets, has resulted in many boards taking a fresh look at this.

Space does not permit a detailed history of the development of the law in this field, but a backward glance is always useful. In the report which led to the Licensing (Scotland) Act 1976, Christopher Clayson did not favour overprovision as a ground for refusal. In essence, he believed that market forces would prevail. It was up to a potential investor, who proposed to put his capital at risk, to decide whether his project was likely to be viable.

His view was not accepted and overprovision was in. At first, the law required a comparison be made between facilities “of the same or similar kind”. At licensing boards, this resulted in many lengthy hearings where agent A sought to differentiate his client’s proposed brasserie from objector B’s boozer. Subtle arguments if you were involved. Deathly dull for everyone else.

The law changed at the end of 1991. Boards were to have regard simply to the numbers of licences either in force or the subject of a provisional grant. The courts made it clear that a board could look simply at the facilities which one could legally offer with that particular type of licence. It could not consider how the premises in question were in fact operated. The cynics may say that when framing statements of reasons for a decision, clerks have half an eye to being appealed. Overprovision therefore became a highly popular ground for refusal. If you had clearly identified the locality you were considering and had counted the numbers correctly, such a decision was virtually appeal proof.

Evidence based?

We scratched our heads a bit when the 2005 Act came along. What was meant by premises “of the same or a similar description as the subject premises”? In practice, overprovision refusals were often tied in with other grounds based on the licensing objectives. Some commentators have argued that overprovision has ceased to be a true, standalone ground for refusal. It would be tied in with issues relating to crime, nuisance or disorder; however, s 23(5)(e) sets out overprovision as ground for refusal in its own right.

The influence of the health lobby is not for this column, but it is regrettable, to put it mildly, that NHS Scotland seems to have based its representations on statistics which were over four years old. Its arguments have carried more weight in some areas than others. An interesting outcome is the decision of Highland Board. Its policy contains a rebuttable presumption against the grant of a licence for any premises with an alcohol display area in excess of 40 metres, effectively ruling out the average supermarket. East Lothian has gone further, creating a rebuttable presumption against the grant of any new licence or the increase in capacity of any existing licence. It clearly justifies its position by reference to statistics from 2007-2009.

One learned commentator has queried whether a board can designate its whole area as an overprovision zone. For my own part I can see no reason why not. The fact is that the courts are likely to support boards which follow their own policies, provided there are no other irregularities. Will it make any difference if it can be shown that these policies were based on an incorrect premise or on inaccurate statistics? As ever, it will take a challenge by an applicant with sufficiently deep pockets to enable us to find out.